Marifil Mines (TSX: V.MFM, Stock Forum) reported Monday that exploration in its new Neuqen Basin property in Argentina has resulted in the discovery of two horizons of potash, one 11 m (upper) and the other 9 m (lower) thick. The grade of the upper horizon grades 5-15% K2O and the lower at 15-20% K2O. The lower horizon is believed to be of higher grade than that currently being mined nearby at Rio Colorado, owned by Rio Tinto (NYSE: RTP, Stock Forum).

For those who have been living under a rock for the past six months, potash has become the new darling of the commodities market. Not to be confused with pot ash, the residue often found after a Deep Purple concert, potash is a variable mix of evaporite minerals: sylvite (KCl), halite (NaCl), and various oxides, carbonates, nitrates, sulfates, and phosphates of alkali metals.

Potash’s main use is as a fertilizer to provide better crop yields to plants by enriching soil in elements beneficial to plant growth and resulting in enhanced crop yields. Producers such as Agrium (TSX: T.AGU, Stock Forum) and Potash Corp. (TSX: T.POT, Stock Forum) have seen their share prices rise substantially in the past few months due to increased demand for food staples such as corn, soybeans, wheat, and other grains. The increased demand has led to the producers being able to negotiate for higher sale prices of potash to major producers such as China. Even junior potash explorers such as Raytech Metals (TSX: V.RAY, Stock Forum) have benefited from the craze. Now Marifil is getting some of the investor love, seeing its share price settle up ~24% by the end of the day Monday to 44.5 cents.

Disclaimer: The author holds 1000 shares of Marifil Mnes. This article is based on the personal opinions and experience of the author. Please do your own due diligence when investing.

This article was written by a member of the Stockhouse community.

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