MagIndustries Corp (TSX: T.MAA, Stock Forum)) is developing a potash project in the Republic of Congo. The company announced late last month that an unnamed Chinese investor had completed its due diligence with regard to a proposed purchase of 400 million common shares. But the close of the transaction faces a number of hurdles still.

According to Rpat458, “MAA is a great potential mine but there is still a great deal that needs to happen between now and production. I was a buyer in the low .50's and I will continue to accumulate as news comes out. Might just be dead money for a while and a little volatile as many issues remain unknown for now.”

Shares were ahead more than 20% on Wednesday; the stock traded as high as 70 cents. The move prompted this observation from stockta: “and [it] will increase from there depending on Potash prices. Chinese won't be buying in at .70 for a paltry 10% return. they buy in for huge returns. IMO we will see $1.50 plus in short order.”

In addition to support for the company’s project, Sailor8 noted other geopolitical factors in the mix. “China does not want to depend on Russian resource deliveries. While China had passed Russia in economic ways by many miles, poor Russia still plays the big boy and even shows military presence in areas of Chinese interests.

“So it is very logic: China wants also for political + strategic reasons access to resources outside from Russia, thus in Africa, Australia and Canada.

“In the case of potash, China wants do get independent from the traditional Russian Uralkali group and from new Russian fertilizer mining structures, which clearly are controlled and powered by - to say it friendly – ‘Putin related groups’.”

But there were detractors as well. redwings6 referred to Mag competitor, Allana Resources (TSX: V.AAA, Stock Forum), which is developing a potash deposit in Ethiopia. “ It seems odd that AAA has proceeded with their deal rather quickly even though they had a couple of delays! If I remember correctly MAA started sooner as well. Their deal with China Co seems to make the the offer with MAA look rather shabby. IMO.”

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