This might be the smartest mining opportunity in 2018. It’s not coal, oil, copper. Nor is it silver, gold or platinum. What is the commodity? Read below to find out…
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But one little-known miner called Vatic Ventures (TSXV:VCV.V) with a simple business strategy… is sitting on a potential find that could make a real difference in Asia.
Scour the globe with the latest technology for a commodity that is needed right where the commodity is found.
In simple terms: Find something everyone needs… in the region where it’s most needed.
And that’s what they hope they’ve done.
In fact, they are hoping to be sitting on one of the largest finds of its kind… in the PERFECT location.
- It has the infrastructure… electricity, water, roads and labor.
- It has incredible local and regional demand from Southeast Asia, India and China.
It’s critical to rice and other crop production… in a region experiencing tremendous growth.
It’s a vital component in fertilizers, and it is crucial for increasing crop yields.
Without it, the world’s population could go hungry.
And as the world’s population continues to grow, demand for potash is set to rise higher and higher and higher.
And that’s where Vatic Ventures Corp. (TSXV:VCV.V) comes in.
Right now, the potash market is cornered by several major producers—Canada and Russia, where production and transportation costs are high, and reserves are dwindling.
To meet future demand, potash miners are seeking out new deposits.
The UN projects the world’s population to rise 42% to 10 billion people by 2050, and farmers are going to need a lot of potash to help grow enough food to fill all those stomachs.
Potash demand is very likely to rise—along with Vatic’s chances of success if it finds what it hopes to on its project.
Here are five reasons to keep a close eye on this breakout company:
#1 Major Discovery
The Saksrithai potash project in northeastern Thailand is 32 sq. kms of prime real estate, 270 kms from Bangkok, Thailand. So, transportation costs of the potash to end users would be low compared to current transport routes that must cross the world to get into the local market. Local production will also cut down on the premium that is paid by regional potash importers. This is important because potash is shipped by the ton and is very bulky.
Vatic (TSXV:VCV.V) obtained an 80 percent interest in Saksrithai in early 2017, and immediately proceeded with an initial seismic survey, environmental study and geological survey. Drilling is set to commence around May 1, 2018, and Vatic plans to spend $1.5 million over 15-18 months to prove the project’s feasibility.
Thailand is believed to have the world’s largest untapped potash deposits. The Khorat Evaporite basin contains billions of tons of sylvanite and carnallite, covering about 300,000 sq km. It was formed millions of years ago and is prime potash mining real estate.
The deposit at Udon Thani, which the CEO of Vatic first developed in the 1990s, was estimated to hold 908 million tons—at current prices, worth $206 billion.
Recognizing the bonanza, the Thai government put together a steering committee in 2014 to attract investment in potash mining.
Even better, the project at Saskrithai is said to be shallow and easy to mine. So, mining costs are low.
Those deposits are situated a mere 150-350m below the surface. Around the world, similar deposits can be as deep as 1.9 km—and cost a lot more to dig up.
At Dan Khun Thot, drilling has found deposits close together, at grades as high as 34.03 percent. That property, which is directly adjacent to Vatic’s Saksrithai, is already projected to produce 500,000 tons per year, or about $113 million per year at current prices.
Vatic’s property is hoped to be bountiful or more. Its surveys have uncovered promising signs of deposits of high grade, and the potential of the deposit could be as large as the property itself.
#2 Location, Location, Location
The key to Vatic’s (TSXV:VCV.V) future is the location of its big discovery: Thailand.
Nearly all the world’s potash comes from a handful of exporters, all of them in Russia, Europe or North America. But the major import markets are in Asia, and one of the biggest markets is Southeast Asia. And that’s where Vatic comes in.
According to the USGA, “Global scarcity is not the issue with potash—transportation costs are.”
Vatic (TSXV:VCV.V) has the solution: its potash exploration property is close to major markets. Thailand, Vietnam, Malaysia and Indonesia make up 75 percent of all Asian potash imports, excluding China and India.
Vatic’s goal is that its potash would enjoy a major transportation cost advantage from potash imported from Europe or North America—up to $60/ton, enough to make Vatic’s product 26 percent cheaper than imports.
It will also benefit from the support of the Thai government, which is directly investing in potash, and cheap labor costs.
Thailand currently imports 100 percent of its potash, which means that a Saksrithai find could fill a major hole in the Southeast Asian market. Imports have kept up with demand since 2011, and demand is expected to rise steadily until 2027.
Currently, the four biggest countries in Southeast Asia excluding China and India (Thailand, Vietnam, Indonesia and Malaysia) import about 5 million tons of potash each year, worth $1.25 billion—a market that Vatic hopes to tap almost immediately after it proves up its resources and builds its mine.
And in China and India, potash demand is massive—it’s crucial to regional rice and palm oil production.
From the Saksrithai property, Vatic has excellent access to excellent infrastructure: it can drive potash down the road to market with a relatively low transportation investment.
So, thanks to advantages in cost and a superb geographic location, the opportunities for Vatic (TSXV:VCV.V) to tap major market demand for potash are massive.
#3 Steady Margins, Lower Volatility
The world needs potash: it’s a crucial ingredient in fertilizer and is in hot demand all over the world.
In 2016, consumption of potash exceeded shipments, indicating a tight market.
Supply is expected to quadruple between 2020-2027 to keep up with demand, but there’s a chance that delays in bringing new production on-line would lead to a tight market, potentially for the next decade.
Vatic’s (TSXV:VCV.V) project in Thailand is on the doorstep of the world’s largest potash markets—China and India. Demand for potash has been growing strong at 6 percent per year and shows no signs of slowing down.
In Southeast Asia, demand for potash is off the charts—it’s 4.25X local production, requiring mass imports from Russia and Canada.
But Vatic’s potash play in Thailand is aimed to help meet that demand, at a lower price than competitors.
That means its market is ready when Vatic is ready with product.
#4 Management Team
Vatic Ventures (TSXV:VCV.V) is a Western company making a play for Thai potash—because it’s led by a management team with the skill set needed to pull off a this very promising venture.
CEO Dr. Gerald Wright already has one big success under his belt. He was part of the first Thai potash play by a Western company—Udon Thani, which he helped fund and develop in the mid-1990s. As CEO of Asia Pacific, Wright took a struggling firm to an almost $1 billion valuation, raising over $100 million in the 1990s. He’s CEO of Hong-Kong based Red Branch Investments Ltd., and he has thirty years of experience in mineral exploration across four continents.
The Board of Directors is dominated by Nasim Tyab, a financier with twenty years of experience in international capital markets, and Barry Coughlan, a Vancouver-based businessman with thirty-years of experience in financing and a string of successful mining ventures under his belt.
Together with Wright, they have excellent connections in Thailand and a partnership with a Thai firm to develop the Saksrithai property.
As a Western firm to get into Thai potash mining, Vatic has an open field in which to expand—and hopes to seize opportunities other companies haven’t recognized yet.
#5 On the Edge of Discovery
Vatic (TSXV:VCV.V) has already begun picking up steam.
In February the company’s stock uplisted from the NEX to the TSX Venture Exchange, where it qualifies as a Tier Two stock.
This is sure to attract more investor attention for a company that has a tiny $3.6 million market cap.
Other mining plays have been hugely successful. A non-western firm in the potash business, Danakali Resources working in Eritrea, Africa and an Australian company HighField Resources working in Spain, have realized market caps of $186 million and $347 million, respectively. And Vatic aims to be next, once operations start up.
But then again, the Vatic play could be much, much bigger. Dr. Wright, the CEO, has very high hopes.
The pre-drilling indications are promising, and the nearby potash property is already projected to bring in hundreds of thousands of tons.
The Thai market depends on imports, which local production could be in a great position to undercut, capturing a huge share of the market.
Thailand’s strategic location makes it the perfect place from which to jump into the lucrative Southeast Asian markets—
Vatic (TSXV:VCV.V) is one to look at carefully… before the extent of its resources becomes known.
By. Ian Jenkins
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