Saturday, October 2, 2010

food + rare earths? #jarobuys potash + phosphorus = encanto + mosaic + agrium + innophos


well, there was the next investor lunch in the pretty käfer's restaurant this week. it was all abt food this time! no, just kidding, of course not only abt food alone but also abt drinks! and abt fertilisers! well, the farmers need them like the hell needs the fire => thus #jarobuys:
  • alexco res. - precious metals explorer in canada & mexico + environmental services 4 mining industry
  • alderon res. - near term iron ore producer in labrador / canada
  • encanto potash - potash explorer in saskatchewan / canada
  • s.th. else, wanna present that later cos the investor lunch series continues next wednesday ...

still following my train of thoughts? no? what? my rant does not make any sense at all? ok, lets start again :-)

well, these company presentations are run by euroscandic intnl & fortuna capital guys. this time there was a small overview abt the recent euroscandic's investments, so ive decided 2 buy alexco + alderon out of their list ... btw, ive bought encanto on monday @ CAD 0.19 ... the closing quote 2day was approx 13% higher @ CAD 0.215 ... dont ask me why i didnt buy the shares few weeks earlier  and avoided the road show impact on the stock price or why i didnt bought at about CAD 0.12 before the august/september rally in commodities started ... of course, buying early doesnt always mean buying low ...  just imagine, my next week's 'investor lunch' purchase is permanent below my entry price ;-( ... thunderstorms! im not going 2 keep that secret any longer! thats donner metals, u know? wanna look-up 'donner' in a german dictionary?

hmmmm, what abt jim walchuck's presentation? well, encanto's CEO told/shown in his matter-of-fact manner (hell, are there no joke sputtering salespeople/entertainers out there? ... just kidding ... when investing, facts are much more profitable than fairy-tales, of course i know ;o)) few interesting assumptions abt the planet's growing population, shrinking agricultural production land, bhp billiton's take-over offer for the worlds #1 potash producer potash corp. of saskatchewan ... lets see if there is still s.th. what i could remember:
  • $1 spent on fertilisers leads to $3 in higher earnings for the farmer
  • there are only 12 countries producing potash out there (canada, russia, belarus, germany, ...)
  • 35% of wold production comes from saskatchewan / canada
  • there are only 3 junior potash companies in saskatchewan left, all others where taken-over by majors or went bankrupt before the boom in commodities arrived on planet earth. btw, one of them is my 3.5-bagger western potash
  • encanto is a really-early-stage-explorer, it will need a lot of fresh money in order 2 reach production and thus is gioing dilute the existing share base further ... well, lets hope it happens at a much, much higher price than the current CAD 0.215 
  • the number of fully diluted shares is already 250,665,044 ... a little bit 2 high ... there will always be folks willing 2 sell at some higher levels which will slow down the stock performance i think ...
  • good first nations relationships (important 4 permitting of drilling / future production ... well, in case of success will these folks get a 3% royalty out of all encantos potash sales ... shudda merry chief's daughter asap?)
  • there should be enough money in order 2 finish drilling + all needed studies in order 2 present a new resource calculation till december 2010 or january 2011, which could/should attract both investors and eventual joint-venture partners 
  • ...
lets support these encanto guys, lets follow their progress a little bit closer (of course, ive subscribed 4 companys investors newsletter), lets help 2 provide some food 4 the earthlings and some $$ for myself => good luck, my lovely potash play, good luck :-)

addendum 10/16/2010: where the hell is all that phosphor/phosphate produced? 

folks, ive spoken to a buddy of mine abt food + fertilizers last week ... an ongoing PhD in agriculture ... potash + sodium + phosphor is all what the plants need (beside sun + water, of course) ... and u know what? phosphor is the stuff which is really rare ... got it? thats a huuuuge investment opportunity, u know? well, ive been googling the web for an hour or 2 and despite their +11.19% rise on friday i found almost nothing .... only one lithuanian producer listed in london without any significant volume (but already well advanced in the last few months) and one chinese company without any stock-exchange listing (at least i coudnt find such) ...
WHO KNOWS ANY phosphor/phosphate PRODUCER? 


addendum 10/25/2010: again looked for phosphor producers on the internet yesterday, couldnt find much out there => is the world really running out of phosphor? well, there was an another lithuanian producer, but unfortunately listed only in vilnius, a chinese company and not much more thus ive decided 2 buy two agriculture majors: the canadian agrium inc. guys + their american nyse buddies mosaic co. well, the former produce phosphor fertilizers, buuuut the later are the guys who bring phosphor above ground! of course, like the whole potash / rare earths sector both agrium and mosaic doubled since august therefore ive decided to make a small pilot buy and watch these companies closer in the future ... btw, ive found a great article on phosphorus @ seeking alpha => enjoy:

Taking Stock of Phosphorus and Biofuels -- Seeking Alpha



addendum, october 31st + november 1st: well, ive made some additional studies, there are few more phosphorus producers (or at least phosphorus fertilizers producers) out there:
  • innophos - listed @ nasdaq, thx 2 mentor (see comment below) for this useful information
  • United Phosphorus Limited - a huge indian company, listed only in india, cant buy shares via my existing brokerage accounts, current price is already high but not parabolic, there is strong earnings growth as well
  • many chinese / indian / russian / baltic (lithuania!) / ukrainian / arabic (morocco!) companies => its difficult 2 invest in them
  • ICL Fertilizers - israel - gonna look-up later
  • IMC phosphates - usa - gonna look-up later
  • Jordan Phosphate Mines Company Ltd. - a mining company!!!
  • luvena s.a. - poland
  • Kazphosphate LL - kazakhstan
  • K+S - germanys huuuge potash producer, already in my portfolio but a badly performer till now
  • many private or non-quoted public companies => for me impossible 2 invest in them :-(
  • legend international - phosphorus
  • mosaic company - phosphates + potash
  • south boulder - potash in eritrea (bought in february 2011)
  • allana potash - potash in ethiopia (bought in february 2011)
  • ...

btw, lets keep track abt all my phosphorus / phosphat / potash / agriculture companies => lets sum up my FOOD DIVISION:
  • nestle - switzerland - nespresso & more :-)
  • agrium - canada
  • mosaic - usa - phosphates + potash
  • legend international holdings - phosphorus
  • western potash - canada - potash explorer
  • encanto potash - canada - potash explorer
  • K+S - germany - potash producer, fertilizers
  • ADM - usa - grains
  • burcon nutrascience - canada, vegetable proteines
  • EnWave - canada - dehydration technology (food + medicals)
  • vale - brasil - phosphate mines!!!
  • bhp billiton - australia - gonna take-over potash of saskatchewan corp
  • world water ETF - dont ask me what the hell is in that basket ... no clue at all!
  • kws saat - germany - seeds
  • innophos - usa -  a specialty phosphate producer
  • allana
  • south boulder
  • ...
folks, i liked the idea of putting all members of 1 sector together! will prolly continue with gold/silver, base metals, energy, industry, 'new' technology, REE, finance, etc in some of my future blog posts ... shoudda try 2 motivate (bribe?) my youngest daughter in order to create these sector lists as watchlists / demo portfolios at my brokers website in order to get also the current $$ weight of each sector? gonna think abt that idea later

my REE fighters (rare earth elements):
  • commerce resources - canada
  • quantum rare earth - usa
  • aurizon mines - canada
  • zimtu capital - canada
  • talon metals - canada
  • arafura resources - australia
  • lynas corp - australia
addendum may 8, 2011:

folks, now i start 2 understand all that REE craziness out there! wanna see the recent price developments?  (source: the latest lynas corp quarterly report)
...
RARE EARTHS PRICES 
Rare Earths supply constraints has further impacted  Rare Earths prices. The average quarterly price for the Mount Weld Rare Earths distribution, on Freight on Board  (FOB) China basis, increased to US$ 92.84/kg  REO, which is  an increase of  over 49% across the quarter. Prices continue to increase post quarter end and as at 27 April 2011, the average price for the Mount Weld Rare Earths composition was US$ 160.32/kg on a FOB China basis.  
...
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