“This is not only extremely good news for Western Potash, but for other junior mining companies with mid-size projects in search of international financing,” said Siddharth Rajeev, a vice-president at Fundamental Research Corp, which analyzes small and micro-cap public companies.
“This deal took many months to put together, but the investment is significant, which shows a good level of confidence by the Chinese investors,” Rajeev told China Daily.
“The Chinese investors are going to be very active in this JV, but what is more important is their level of confidence in this project could trigger further financing,” he said. To read the article click here.
Bill Majcher, a Hong Kong investment banker, said the deal indicates that Chinese entities are still very interested in mid-size projects around the world when it comes to potash to ensure "supply security".
While the risks and benefits of the Western Potash deal are debated, the Vancouver-based mining junior feels that it is now well-positioned to go out and get further financing and off-take agreements with other entities in Asia.
"Our strategic alliance with China Blue and Guoxin will provide Western with access to project financing, technical expertise in large-scale project construction and marketing channels for future potash sales," said Patricio Varas, CEO of Western Potash, which over the past three years has also been in on-going talks with major Indian players, including Rashtriya Chemicals and the Aditya Birla group.
"I think the true significance of this transaction is that it is a strategic investment which can lead to a financing that is non-dilutive," said John Costigan, Western Potash vice-president for corporate development. "China has been searching globally for a potash project and this is an endorsement of our milestone project in Saskatchewan."
Western Potash's Milestone project is estimated to cost between $2.9 billion and $3.3 billion in contrast to other global potash projects in the region that range from $10 billion to $15 billion.
Aditya Birla Group, drittgrößte Konglomerat Indiens 40Milliarden Umsatz 2012
Birla hat 2007 in Kanada für 6 Milliarden Novelis geschluckt:
The Novelis company was spun-off from Canadian mining and aluminum manufacturer, Alcan Inc. and incorporated in 2005. The company was acquired by India's Hindalco Industries for $6 billion in 2007. The acquisition made Hindalco one of the world's top integrated aluminum players. This makes Novelis a member of the Aditya Birla Group.