St. John’s, Newfoundland, and Labrador-Altius Minerals Corp. and Sprott Resource Corp. (SRC) have entered into an agreement to explore for potash in the St. Georges Basin in southwestern Newfoundland. The St. George’s Basin is geologically analogous to the Moncton sub-basin in New Brunswick, which is Canada’s second major potash mining district. Under the agreement, SRC may earn an interest in a large land package that has been assembled by Altius to cover several known potash occurrences within the basin. SRC may earn up to a 60 percent interest in the St. George’s project by spending C$2,500,000 over 4 years, subject to an underlying 2 percent gross sales royalty retained by Altius. The St. Georges project consists of 1,400 claims (35,000 hectares) to cover four primary target areas for potash deposits. These targets feature historical potash drill intercepts, low gravity anomalies, and salt springs that are underlain by a relatively unexplored evaporite-bearing sequence. An exploration program to evaluate the area and identify drill targets has commenced. In addition to the St. George’s Basin joint venture, Altius and SRC have also signed a strategic alliance regarding the assessment of potash exploration opportunities in Canada. Under this agreement, the two parties have agreed to collaborate in the acquisition and exploration of potash projects in Canada. SRC is a Canadian-based company, the primary purpose of which is to invest, directly and indirectly, in natural resources. Altius’s business activities include the generation and acquisition of projects related to natural resources opportunities located primarily in Newfoundland and Labrador.
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Agrifos to stop SPA production, add more DAP/MAP
Pasadena, Texas-As part of the consent order with state officials in Texas, Agrifos Fertilizer will stop producing super phosphoric acid to evaporate more water used in processing, and will produce another 150,000 st of DAP and MAP. That will bring the company’s capacity for DAP/MAP to between 500,000 st and 550,000 st.
Western Potash completes IPO, raises C$20 M
Vancouver-Western Potash Corp. said May 6 that it has successfully completed its initial public offering, comprising 18,185,000 common shares at an issue price of C$1.10 per share, for gross proceeds of C$20 million. Upon closing of the IPO, the company’s common shares began trading on the TSX Venture Exchange under the symbol WPX. The offering was led by Wellington West Capital Markets Inc., with a selling syndicate that also included Canaccord Capital Corp. and Genuity Capital Market. The agents were also granted an option to purchase up to 15 percent of the common shares at the price of C$1.10. The option can be exercised in whole or in part, within 30 days of the closing date, to cover over-allotments, if any. The company intends to use the net proceeds of the offering to advance its Manitoba potash properties, where multi-phased, drill, and seismic exploration programs have been planned to expand and define the extent of potash mineralization described in the company’s recently filed National Instrument 43-101 technical report. Funds will also be used for general working capital. Western Potash Corp. is a mineral exploration company engaged in the evaluation, exploration, and development of potash mineral properties in Western Canada. The company intends to define and develop a world-class potash deposit in an ecologically sustainable, economically efficient, and socially responsible manner. In the meantime, Pinetree Capital Ltd. said May 6 that after the Western Canada IPO it owned 6,810,000 common shares of Western Potash and 6,000,000 common share purchase warrants. In the event that the warrants are fully exercised, these holdings represent approximately 13.3 percent of the total issued and outstanding common shares of Western Potash as of May 6, 2008, calculated on a partially diluted basis assuming the exercise of the warrants only. Should Pinetree and its joint actors exercise all of the convertible securities, their combined ownership would represent a total of 19,855,000 common shares of Western Potash, or approximately 19.8 percent of shares.
The Andersons’ 1Q buoyed by Plant Nutrient Group
Maumee, Ohio-The Andersons Inc. reported net income of $7.8 million ($0.42 per diluted share) on revenues of $713 million for the first quarter ending March 31, 2008. The results reflect a 15 percent drop from last year’s first-quarter income of $9.2 million ($0.51 per diluted share) on revenues of $407 million. The Grain & Ethanol Group’s first-quarter operating income of $2.2 million was significantly less than its year-ago result of $10.2 million, which the company attributed to cash prices for grain commodities failing to keep pace with the futures market, and to rising inventory carrying costs associated with higher grain prices. The company said income from its ethanol joint ventures grew significantly during the quarter, however. The Andersons said its Plant Nutrient Group achieved “unprecedented” first-quarter results, postings record operating income of $7.5 million on revenues of $105 million, compared with an operating profit of $0.4 million on revenues of $67 million in last year’s first quarter. “These earnings resulted from significant margin increases primarily resulting from inventory price appreciation, which began last year and has continued into 2008,” the company said, noting that sales volumes were down slightly from last year due to the escalation in plant nutrient prices. The Andersons also saw good results from its Rail Group during the first quarter, with record operating income of $6.4 million on revenues of $35 million, compared with $3 million and $26 million, respectively, in last year’s quarter. President and CEO Mike Anderson said the company was excited about its recent purchase of Douglass Fertilizer & Chemical in Florida (GM May 5, p. 1), saying the acquisition “is consistent with our strategic goal of increasing our plant nutrient footprint and national market share through geographic expansion.” The Andersons said it anticipates its full year 2008 earnings will be within a range of $3.65 to $4.00 per diluted share.
Ammonia margins up at Magellan Midstream
Tulsa-Magellan Midstream Partners LP reported a huge increase in ammonia operating margins during the first quarter ending March 31, 2008, to $3.17 million on revenues of $5.4 million, up from the year-ago loss of $624,000 on revenues of $4.9 million. Revenues were up due to higher average rates and additional volumes, which moved up to 220,000 st from the year-ago 214,000 st. Operating expenses were down to $2.25 million from the year-ago $5.5 million due to lower maintenance and environmental expenses. Magellan-wide, net income moved up to $93.3 million ($.89 per diluted lp unit) on revenues of $346.5 million, versus the year-ago $49.7 million ($.55 per lp unit) and $292.0 million.
CVR Energy to restate earnings downward
Sugar Land, Texas-CVR Energy Inc. said April 29 that it intends to restate its earnings for the year ended December 31, 2007, and the quarter ended September 30, 2007. CVR said the revision resulted from certain errors principally relating to the calculation of the cost of crude oil purchased by CVR and associated financial transactions. The errors affecting cost of product sold (exclusive of depreciation and amortization) equate to approximately 0.8 percent of the CVR cost of product sold (exclusive of depreciation and amortization) for the year ended Dec. 31, 2007. CVR expects its restated net loss for the year ended Dec. 31, 2007, to be approximately $65-$70 million, an increase of approximately $8-$13 million over the net loss of $56.8 million previously reported. CVR expects its restated net income for the quarter ended Sept. 30, 2007, to be approximately $9-$12 million, a decrease of approximately $1-$4 million from the net income of $13.4 million previously reported, and expects its restated net loss for the quarter ended Dec. 31, 2007, to be approximately $23-$26 million, an increase of approximately $7-$10 million from the net loss of $15.9 million previously reported. As a result of the restatement, CVR says it has begun implementing certain changes regarding crude oil accounting, including centralization of the related accounting functions and improved oversight and review of those functions.
Martin Midstream reports improved results
Kilgore, Texas-Martin Midstream Partners LP (MMLP) reported net income of $8.0 million ($.51 per lp unit) on sales of $313.0 million for the first quarter ending March 31, 2008, compared to the year-ago $5.8 million ($.42 per lp unit) and $155.8 million, respectively. Despite the increase, MMLP said first-quarter net income was negatively impacted by a $1.9 million non-cash derivatives loss, which reduced net income by $.13 per lp unit. First-quarter revenues from MMLP’s sulfur services segment were $70.2 million, up from the year-ago $29.4 million. Costs from the unit were up, at $56.3 million from the year-ago $21.8 million.
Sherritt fertilizer revenues improve, losses shaved
Toronto-Sherritt International Corp. reported that fertilizer operating losses decreased in the first quarter ending March 31, 2008, to C$200,000 versus the year-ago $900,000. Revenues were $8.5 million, up from the year-ago $5.7 million. Fertilizer sales volumes moved up to 22,379 mt from the year-ago 17,135 mt. Sherritt said more deliveries were taken in advance of the spring planting season as customers anticipated restricted supplies from increased crop prices. Sherritt also reported that its Metals segment was seeing higher sulfur and sulfuric acid prices. Sulfur costs were put at US$261.47/mt versus the year-ago $101.95/mt, while acid was US$209.65/mt versus $99.06/mt. Sherritt-wide, net earnings were C$89.0 million ($.38 per diluted share) on sales of $314.2 million, versus the year-ago $89.1 million ($.52 per share) and $310.1 million, respectively.
Noble net profits up 281 percent
Hong Kong-Noble Group reported a 281 percent increase in net profits for the first quarter ending March 31, 2008, to a record $167 million. This was nearly triple the year-ago numbers. Net income included an exceptional gain on disposal of shares in the amount of $47.8 million, but even excluding the effect, Noble’s net profitability was the highest in company history, exceeding fourth quarter 2007’s $97 million by 22 percent. Noble said the profits benefited from comparably equal contributions from all four key business segments. First-quarter earnings per share were up 254 percent, to US$6.41 versus the year-ago $1.81. First-quarter revenues were $9.5 billion, up 132 percent from the year-ago quarter. Tonnage volumes rose to a record 39 million tons, a 56 percent increase over the year-ago quarter.
Terra to extend and expand its share repurchase
Sioux City-Terra Industries Inc. said May 8 that its board of directors has approved the extension and expansion of its share repurchase program. The current share repurchase program, scheduled to expire on June 30, 2008, was instituted on April 25, 2006, and allowed for the repurchase of up to 10 percent (or approximately 9.5 million shares) of Terra’s outstanding common stock. As of March 31, 2008, Terra had repurchased 6.7 million shares at an average price of approximately $16.00 per share. The new program, adopted May 6, allows for the repurchase of an additional 10 million shares and extends the program through June 30, 2010. It carries over the balance of 2.7 million unpurchased shares for a total authorization of approximately 12.7 million shares, representing 14 percent of Terra’s current outstanding shares. The stock buyback program will be conducted on the open market, in private transactions, or otherwise at such times prior to June 30, 2010, and at such prices as determined appropriate by Terra and according to applicable legal and regulatory requirements. Purchases may be commenced or suspended at any time without notice.