All Posts from August 2, 2016

Karnalyte, GSFC cease negotiations

Junior potash developer Karnalyte Resources Inc. announced Aug. 2 the cessation of negotiations with Gujarat State Fertilizers and Chemicals Ltd. (GSFC) in respect of the proposed US$700 million financing for Phase I of the company’s potash mine at Wynyard, Sask. The company said the two have been unable to reach an agreement on certain fundamental terms, including governance matters and the terms upon which Karnalyte’s secondary minerals, including magnesium, will be developed in a separate entity to allow current Karnalyte shareholders to benefit from these currently untapped assets.

Karnalyte said the framework agreement dated February 2016 terminates Sept. 30, 2016. As a result, GSFC will lose one of its three seats on Karnalyte’s board of directors. In other news, Karnalyte also announces that Julius Brinkman, vice president of capital markets, ceased to be engaged by Karnalyte, effective July 29, 2016.

Intrepid losses grow

Intrepid Potash Inc. reported a second-quarter loss of $13.4 million ($0.18 per dilute share) on sales of $51.8 million, down from the year-ago loss of $4.9 million ($0.07 per share) and $73.6 million, respectively.

Actual potash sales volumes were up during the quarter to 168,000 st from the year-ago 147,000, however, the average net realized sales price dropped to $193/st from $358/st.

“We continue to be impacted by nutrient pricing uncertainty and the ongoing global oversupply of potash products, which pressured our sales and margins in the second quarter,” said Bob Jornayvaz, Intrepid executive chairman, president and CEO. “With the placement of our West facility into care-and-maintenance mode in July and the better-than-anticipated ramp up of Trio^® production at our East facility during the second quarter, we believe we are making progress towards lowering our cost profile and optimizing our specialty product production. While it will take time for the impact of these operational changes to be fully realized in our financial results and our sales volumes, we remain focused on the long-term potential of these changes.”

“We have made good progress and continue to work towards a final resolution of the debt covenant issues that we have been experiencing,” he added. “We are grateful for the diligence and thoughtfulness our creditors have demonstrated in the negotiations this far and ask for patience from investors as we endeavor to memorialize the previously announced agreements in principle.”

Mosaic posts 2Q net loss

The Mosaic Co. reported a second quarter 2016 net loss of $10 million, down from net earnings of $391 million in the second quarter of 2015. Results in the quarter included after-tax charges of $69 million related to actions the company has taken to lower spending on capital projects and reduce expenses. Net loss per share was $0.03 and included a negative impact of $0.09 from notable items.

Mosaic’s net sales in the second quarter of 2016 were $1.7 billion, down from $2.5 billion last year, reflecting lower potash and phosphate prices and lower sales volumes.

“We are taking the necessary actions to ensure Mosaic remains competitive across all points of the business cycle,” said Joc O’Rourke, president and CEO. “While the environment is challenging, we see signs of stabilization in the second half of the year, with fertilizer prices bottoming and solid demand for our products. At the same time, we are taking action to preserve cash and reduce operating expenses, and believe Mosaic is well positioned to outperform in better markets.”