UPDATE 2-Intrepid Potash shares crash after auditor flags risks

Mon Feb 29, 2016 12:02pm EST
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(Adds CEO comments on production, debt agreements, stock update)

By Arathy S Nair and Rod Nickel

Feb 29 (Reuters) - Intrepid Potash Inc said on Monday its auditor has expressed doubts about its ability to stay in business, sending its shares plunging by more than half.

The U.S.-based miner, which reported its third straight quarterly loss on Monday, also said low potash prices could cause a breach in its loan covenants.

Prices of the crop fertilizer have tumbled due to soft grain prices, dropping U.S. farm incomes, bloated capacity and weak currency in importing countries such as Brazil.

North America's biggest producer, Potash Corp of Saskatchewan, has closed one Canadian mine and said Friday it will idle production temporarily at two others.

"This was an extremely volatile, chaotic quarter," Chief Executive Officer Bob Jornayvaz said on a conference call. "We believe we'll continue to survive and eventually prosper as a smaller but much more profitable company."

Intrepid is one of the world's highest-cost potash producers.

Due to falling prices, Jornayvaz said the company won't be able to comply with debt covenants that were revised in January, and is working with lenders on an updated agreement. Its auditors added going concern language to their opinion, meaning there are worries about Intrepid's ability to keep operating.   Continued...