Passport potash (PPI.V)

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Passport potash (PPI.V)

Post  lukera on Thu Feb 03, 2011 3:05 pm

Got in today at 0.67. will post more tonight when i get home.
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Re: Passport potash (PPI.V)

Post  lukera on Mon Feb 07, 2011 2:13 pm

don't really know what to say...and i'm kind of scared to comment (knock on wood stuff).

Check it out....so far so good....
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wow

Post  aaronrwatts on Mon Feb 07, 2011 10:16 pm

how'd you decide to buy?... nice...

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Re: Passport potash (PPI.V)

Post  lukera on Mon Feb 07, 2011 11:09 pm

I saw the huge spike in volume the other day and did some quick research....I'm still trying to put together something to show you guys. I'm in 75% of my portfolio here, i'm looking to dump half of my holdings at $1.45 and trade with free shares if possible...still trying to feel out the exit strategy here.

Onwards to some quick research:

FYI, I must admit that i do not understand some of the terminology used in the reports.


Location of potash: Holbrook basin, Arizona


The potash that was discovered is between 700 and 1300 feet which is really good as conventional methods of mining may be used to extract it.

Original exploration was completed in 1966 where it was estimated to contain 2.5 billion tonnes of viable potash.

Current price of potash is around $350/Metric Tonne



SOOOO, 2500000000 tonnes X $350/Tonne = $875,000,000,000.

This can't be all mined at once but i use this calculation to show the amazing value in this basin.


Potash is estimated to be in very high demand for 2011

Obviously, high demand is a good thing Smile

Currently, The United States Imports 100% of their potash. 87% comes from Canada

So being able to extract potash domestically is very viable and would likely get some political support.

Research is ongoing, i will post more as time permits...there are also some big players who own the adjacent properties but nothing as big as Passport owns...

Hope this helps, I understand this is way overbought right now and most would stay away but I think this company has huge potential and now that some eyes are on it they may be able to get moving.

I just noticed that most of this information is about the past....there is some very promising recent news as well and a 43-101 to be completed by months end.

Cheers!
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Re: Passport potash (PPI.V)

Post  Max on Tue Feb 08, 2011 4:47 am

Nice research and a very impressive gain!

For the financial point of view (not very important with this one):

50M shares outstanding

$1M book value ($0.02 per share). $1.5M of that $1M is related to mineral properties which can have a strong chance of being overstated. In this case, if you believe in the potential for adding to reserves through the 43-101, maybe that is not such a big issue.

They are losing money right now, but that is with no revenue (guess they are still exploration stage), so that should be fine.

Not a hell of a lot else going on with the company financially. If their claims don't prove themselves, the stock is worth pretty much $0.

One thing to consider is stock options. They have 5,000,000 options outstanding with strike prices around $0.20. Don't know if they hold that much in treasury, so at the current price, they are going to take a beating when the options are exercised if they buy the stock on the open market, so they will probably issue just more shares which will dilute the share price. Still, 10% dilution is not a big deal in the grand scheme of things. Chance of another share issuance grows stronger after such a big run up, especially seeing their low cash levels, so don't be surprised to see even more dilution. The share issuance is a necessary cost of doing business, and as long as they sell for a price significantly higher than you personally paid for your shares, then it should not have a strong dilutive effect on you.

Potash seems to be a good industry, and don't think demand is going to fade any time soon, but supply could become a problem as more and more juniors are coming out of the woodwork.

Good luck with this one, looks like you have done your homework, bet big, and so far made the right call. Its good to hear you are focusing on an exit strategy already. That is what I would recommend to think about most.

Max
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Re: Passport potash (PPI.V)

Post  aaronrwatts on Tue Feb 08, 2011 11:30 am

Damn. Smile up 17% so far today...

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Re: Passport potash (PPI.V)

Post  lukera on Tue Feb 08, 2011 9:25 pm

33% today on no news or anything.....kind of getting nervous but I guess no news is good news.

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Re: Passport potash (PPI.V)

Post  lukera on Wed Feb 09, 2011 12:23 pm

Sold some today to cover the cost of the initial buy....free shares from here on out!
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Re: Passport potash (PPI.V)

Post  lukera on Fri Feb 11, 2011 6:39 pm

took a beating over the last 2 days...

There was a "glitch" on the market with AAA.v shares which caused them to instantly drop from $2.30 to $1.30.

http://www.marketwire.com/press-release/Allana-Potash-Clarifies-February-9-2011-Trading-Activity-TSX-VENTURE-AAA-1393325.htm

This in turn caused almost all junior potash play to tank along side them. this marked the big turnaround.

Still believe this can see $2.00 in the near future. I was very tempted to buy some more today but got a little squeemish.

I'll post a summary after all of this carnage is over.
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Re: Passport potash (PPI.V)

Post  Max on Sat Feb 12, 2011 10:41 am

OK, took a closer look. Saw on the website, that PPI has anywhere from 1M to 2.5B tonnes. Lets take the low estimate...

1M tonnes x $300/tn (being conservative) = $300M
current 50M shares, with potential dilution of 10-20% (lets say 10% net of cash received, but 20% to be conservative).
Shares Outstanding = 60M

$300M / 60M shares = $5

However, as you mentioned previously, they will not get all this out of the ground at once, and this does not consider operating costs of getting it out of the ground. Potash Corp's operating cost per tonne I googled something around $160. Lets say passport does not have anywhere near the efficiencies of Potash and we increase that cost to $250. Now lets rework the numbers....

1M tonnes x ($300 - $250)/tn = $50M

$50M / 60M shares = $0.83 / share

This is the fully realizable value if all the Potash could be mined at once, but you also have to consider the time value of cash flows, and the risk that they may find nothing.

To continue to hold this stock is to expect:

A) significantly more than the low estimate in reserves
B) Potash prices to rise considerably in the years to come (betting that supply will not rise to meet demand)
c) PPI's operating costs will be comparable to that of Potash Corp

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Re: Passport potash (PPI.V)

Post  lukera on Tue Feb 15, 2011 7:59 pm

Phillip Frost hopped on board for 16 million shares. I'm not sure how significant this is but if a guy like this wants to spend $16 million i would think that he see's something good in this company.

Insider Name: Frost, Phillip
Insider Relationship: 3 - 10% Security Holder of Issuer
Ceased to be Insider: Not Applicable
2011-02-09 Common Shares Frost Gamma Investments Trust 16,546,500

#437 on forbes billionair list


Barry Honig is also in around $10 million:

http://people.forbes.com/profile/barry-honig/24662



Like I said, not sure if this means anything but it does make me more comfortable knowing these guys are on board for some reason.


I bought 5700 more shares today. I got scared out the other day and shit the bed selling 2200 shares at $1.05

here's hoping for good drill results and 43-101 in april!
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Re: Passport potash (PPI.V)

Post  lukera on Sun Feb 27, 2011 7:43 pm

Picture of what I think is potash comming from one of the drill holes.


Bunch of pictures of the drill site.

End of April is the ETA on the 43-101 TR. I'm going to hold until then.
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Re: Passport potash (PPI.V)

Post  lukera on Tue Mar 08, 2011 5:13 pm

rough couple of days it has been. I think people are getting impatient without any drill results.

Also there are 40m shares to be released for trading tomorrow from recent PP's. (i think they were at 0.05 and 0.14)

This is a bit worrysome but I think it will be an oportunity to pick up some more shares.

Holding long until results are in....definately testing my intestinal fortitude on this one...
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Re: Passport potash (PPI.V)

Post  lukera on Wed Mar 09, 2011 5:03 pm

So far the doom has not hit.

Good rally in the afternoon due to this:

President & CEO of Passport Potash Inc., To Appear on Bloomberg TV'S "Taking Stock with Pimm Fox" 5:00 PM, EST Tonight

They are starting to pitch this company to the US market now.

I am nervous and cautiously excited at the same time.....
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Re: Passport potash (PPI.V)

Post  lukera on Fri Mar 11, 2011 5:52 pm

Nice little rally today. I think it is due to the site visit that is sceduled for monday.

There are a few guys on stockhouse who are supposed to be attending and reporting their findings on tuesday.

Passport Potash further announces...Monday, March 14, 2011...site visit

I don't see why they would invite everyone over for burgers and beer if the outlook isn't positive.

hoping for good things!
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Re: Passport potash (PPI.V)

Post  lukera on Sat Mar 12, 2011 8:01 pm

Radio interview today with Josh Bleak:

Listen from 58m to 1h:08m
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Re: Passport potash (PPI.V)

Post  lukera on Mon Mar 14, 2011 9:45 am

More good news. looks like they want to aquire even more land held by the local natives:

Passport Potash Inc. Finalizes Cooperative Agreement with Hopi Tribe

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Re: Passport potash (PPI.V)

Post  lukera on Tue Mar 15, 2011 12:31 am

Max, using some of your numbers here is my take on the company (being a little LESS conservative)

Shares Issued and outstanding: 110 Million.

Cash on hand: 10 million ($0.09/sh)

Assets(property value): 2 Million($0.02/sh)

Financial Liabilities: 3 Million(-$0.03/sh)

calculated book value at 9 milion ($0.08/sh)

Now comes the fun part.

Add in the resource valuation.

Estimated resources in the basin are 1m to 2.5B tonnes based on the Arkla report I posted in earlier posts.

let go a little under mid way (not too conservative yet not being overzealous).

we will say 500M tonnes minable potash here.

So:

Basin is 600,000 SQ. miles

PPI owns 70,000 SQ. miles (approx 12% of basin) NOTE:they are still aquiring more land.

If basin holds 500M tonnes and PPI owns 12% we will assume that PPI has 60M tonnes of minable potash.

Price per tonne is approx $375

cost to mine is estimated at $165 per tonne (Maybe cheaper due to shallow depths).

This put profit at $210/ tonne

lets say they can mine 1.5 million tonnes per year.

1,500,000 X $210 = $315,000,000

which give us a updated book value of $2.95 (book value calc + production).

This is not taking into account the fact that salt and other inherent minerals may be present
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Re: Passport potash (PPI.V)

Post  Fred on Tue Mar 15, 2011 5:55 am

I can't comment on your analysis, but I have been following this one and I think it is an excellent pick. By the sound of it there are a lot more resources in the ground than most people think, and there is definetely a long term outlook for the company. If I am able to free up some cash I may start to get in. It can be a lot of fun to hold a strong position and day trade with a portion of it on dips and peaks.... which there seem to be a lot of.

Fred
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Re: Passport potash (PPI.V)

Post  lukera on Tue Mar 15, 2011 6:45 am

I would love to day trade a portion of my holdings. the problem is I am terrible at finding entry/exit points. My luck, i would sell early during a run up and buy early during a dip!

I already did it once! I will just happily sit on my shares until the 43-101 is released.

In other news one of the guys came back from the site tour and reported that PPI's land along with the HOPI native's tribal land now totals approximatly 120,000 acres. this changes their land holding from 12% to 20% which increases their final numbers in my calculation substantially (well 8% actually).

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Re: Passport potash (PPI.V)

Post  Max on Tue Mar 15, 2011 10:12 am

Luke, my analysis was pretty conservative, and should serve as a baseline. Two things I would criticize in your numbers above are the estimated revenue and cost per ton which both seem a little optimistic, even though you have supported the numbers well. The other thing is the possibility of double counting by adding resource estimates to book value (not that $0.09 really makes a huge difference). Even considering this, your numbers do look pretty impressive. The question is why doesn't everyone else see it the same way you do, or more to the point, what are we missing to keep the current stock price where it is?

Having recently been slaughtered by a fraud in CCME, I am a little bit cautious about speculative earnings at the moment.

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Re: Passport potash (PPI.V)

Post  lukera on Tue Mar 15, 2011 10:49 pm

Photobucket

Passport's newest drill rig(brand new). this is their third rig on site now!
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Re: Passport potash (PPI.V)

Post  lukera on Fri Mar 25, 2011 10:58 am

Strong morning for potash across the board:

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Re: Passport potash (PPI.V)

Post  lukera on Mon Mar 28, 2011 7:04 pm

Latest news:

Passport Potash Inc — Speculative Buy FINALLY Some Analyst Coverage!!!

Updated corporate presentation. 43-101 now out in JUNE, Pre-feasability by august!
I can only speculate the extra time is due to the extra holes they are drilling with the third rig (hopefully).


ALSO:


Ringbolt Ventures Ltd
Symbol C : RBV
Shares Issued 34,500,031
Close 2011-03-25 C$ 0.49
Recent Sedar Documents

View Original Document
Ringbolt signs Holbrook agreement for farm-out

2011-03-28 18:22 ET - News Release


Mr. Simon Tam reports

RINGBOLT FARMS OUT HOLBROOK BASIN POTASH PROJECT

Ringbolt Ventures Ltd. has entered into an agreement with Passport Potash Inc. for the exploration and development of Ringbolt's Holbrook basin potash property in Arizona.

The Holbrook Basin is potentially underlain by 3,500 square miles of salt beds, 600 square miles of which are also underlain by a potash bed. The Ringbolt Arizona permits contain 15,994.32 acres in what appears to be part of the thickest part of the Basin, where the salt has in the past been measured at being 600 feet thick. It is believed that the potash bed lies at the top of the salt sequence, at depths of 700 to 2,000 feet, shallow enough to possibly mine using underground mining methods. The relatively shallow depths of these occurrences should lend its self towards a much larger recovery of the potash ore if compared to the Saskatchewan mines that are operated at far greater depths.

Pursuant to the option agreement, Passport may exercise the option to earn a 90-per-cent interest in the property by making cash payments in the total of $1.0-million (U.S.) over a three-year period ($0.7- million (U.S.) net to Ringbolt), incurring a total of $2.25-million (U.S.) in work expenditures on the property over three years and issuing four million common shares to the optionors over a three-year period (2.8 million shares net to Ringbolt). Upon fulfilling the terms of the option, Passport has the right to purchase the remaining 10-per-cent interest for $5.0-million (U.S.) ($3.5 million (U.S.) net to Ringbolt). The optionors shall be entitled to a 1-per-cent gross overriding royalty on the production from the property (0.7% net to Ringbolt). The option agreement is subject to the approval of the TSX Venture Exchange.

Derrick Strickland, PGeo, a qualified person under National Instrument 43-101, has approved the technical content of this news release.

Simon Tam, the president of Ringbolt Ventures Ltd. stated "The joint venture between Passport and Ringbolt marks a significant milestone for both companies. The combined landholdings in the Holbrook Basin, achieve a critical mass for future development. Ringbolt looks forward to working with Passport to achieve this development."


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Re: Passport potash (PPI.V)

Post  lukera on Mon Mar 28, 2011 11:33 pm

Updated land holdings map.



As you can see they are being pretty aggressive with their aquisitions.

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