PDAC-Red Moon drills for potash in Canada's Newfoundland

Tue Mar 5, 2013 2:27pm EST
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* Project is thousands of kilometers from Saskatchewan

* Location would offer short shipping times to Brazil

* Potash Corp has working mine in same geological formation

By Rod Nickel

TORONTO, March 5 (Reuters) - Thousands of kilometers from Canada's potash-producing belt, Red Moon Potash Inc is drilling for the prized crop nutrient in Newfoundland, an Atlantic island known for fishing, remote vistas and the Gaelic-tinged accent of its inhabitants.

While mining majors and juniors have scoured the globe for commercial deposits of the nutrient that boosts crop yields, Red Moon found its ore almost by accident.

Its parent, Vulcan Minerals Inc, started drilling for oil on the island known as The Rock in 2004 and discovered potash early on.

"We didn't get distracted by it (as) we were fully engaged in petroleum exploration," said Patrick Laracy, president of both Red Moon and Vulcan, on the sidelines of the Prospectors & Developers Association of Canada (PDAC) mining convention in Toronto.

Potash prices spiked to record levels in 2008 and, while they have since pulled back sharply, investors see a bullish future for the nutrient as a booming global population strains the food supply. Potash is a key nutrient to boost production of crops like corn, wheat, rice and cotton.   Continued...