WINNIPEG, Manitoba (Reuters) - Western Potash Corp WPX.TO hopes to find a partner from China or India by year’s end to pay for its proposed 2.8-million metric tons (3.09 million tons) Canadian potash mine, but preferably not through an outright takeover, the junior miner’s chief executive said on Thursday.
Western is one of several remaining junior potash companies in the western Canadian province of Saskatchewan, where the field is crowded with mining majors keen on cashing in on the crop nutrient’s bullish outlook.
Canada accounts for nearly half of the world’s potash reserves, mostly in Saskatchewan.
“The world underutilizes potash,” said Western Potash CEO Patricio Varas, in a telephone interview with Reuters from his office in Vancouver, British Columbia, the most important Canadian port for exporting potash.
“The land has been worked a long time, and it’s tired — you need nutrients to make it fertile.”
Western is in talks with several potential Chinese and Indian investors, including miners, co-operatives and fertilizer distributors, Varas said. He declined to identify the other parties, but he said Western is no longer talking with fertilizer producer Sinofert Holdings Ltd (0297.HK).
Western adopted a shareholder rights plan late last month, and would prefer not to sell the company outright, said Varas, a geologist who was born in Ecuador.
“There are parties interested in a full-out sale and parties interested in just funding the company into production.
“If it’s the option of having a partner who will finance it, that would probably be my preference. This mine would be a very big money-maker.”
Western’s C$3.3-billion ($3.2 billion) Milestone project would sprawl across 2,550 acres southeast of the provincial capital of Regina. Production would start in 2016, tapping a measured reserve of 67 million tonnes of recoverable potash.
Reporting by Rod Nickel in Winnipeg; Editing by Gary Hill and Jim Marshall