Potash Corporation's Production and Disposal Wells Permit Approval

Sage Potash Corp. (SAGE:TSX; SGPTF:OTC) stands out in the market due to its efficient extraction process. In an interview with Streetwise reports, a representative for the company said "what happens is that the brines are used like a conveyor belt. The brines are below ground; we bring it up top. We saturate it further with salt so that there's no more room for the salt that's in the bed down below… It will selectively pick up the potash and bring it up to the top." This process is very efficient, and returns primary, secondary, and sometimes tertiary recoveries of potash.

Water is an essential piece of brine-based potash extraction. While Sage Potash's prosses of mechanical evaporation is less water intensive than evaporation ponds, it still requires permits. Sage Potash has acquired permits on two levels: the first is a production permit that is in progress, and the second is a permit approval for a large mining operation. The company has undertaken other studies as well, including emissions, archeology, and environmental studies.

The company is drilling a water access hole, a production hole, and a waste disposal hole. Once these are drilled, Sage Potash reports that it can produce 50,000 tons per year for five to ten years.

Sage Potash is ahead of the average development schedule for potash projects. According to a representative of the company, "it can take 15 years to get to where we are, and it literally has taken us close to 10 or 12 years to get to where we are, because nothing happens without the initial discovery hole." The company expects to complete the project for CA$10 to CA$12 million before drilling costs, and to generate a cash flow of CA$80 million a year.

An Opportunity to Join the Market

The market may be primed for new investors to break into the potash market. Russia played a major role in the production of potash, and sanctions over the conflict in Ukraine have disrupted supply. According to Josh Linville, a director at the fertilizer company StoneX, "European production has come back online. Largely they're still sort of offline, but most of it is back. A lot of these fears that drove prices up were found to be unfounded, and now we're starting to correct lower."

The market for potash is expected to expand significantly, driven primarily by agriculture, by 4.48% by 2028. Regardless of unstable supply, data suggest that demand will increase.

Looking to Future Development

Sage Potash has a number of catalysts on the horizon. The company expects to receive permits to drill a second exploration well in the summer of 2023, and it expects to advance its PEA in August of 2023. The company will begin a pilot production program sometime in Q4 of 2023, or Q1 of 2024. It is also anticipating a feasibility report sometime in Q1 or Q2 OF 2024.

Ownership and Share Structure

Management and insiders own 27.54% of the company. Brady Stiles owns 14.01% of the company with 10.02 million shares, Gregory A. Hahn owns 6.25% of the company with 4.47 million shares, Mike Stark owns 4.08% with 2.91 million shares, David John Vincent owns 1.75% of the company with 1.25 million shares, Dong Hyun Shim owns 1.26% with 0.90 million shares, Eugene Spiering owns 0.12% with 0.08 million shares, and James B. Engdahl owns 0.07% with 0.05 million shares.

Institutions own 9.69% of the company. SSI Wealth Management AG owns 9.68% with 6.92 million shares, and Moloney Securities Asset Management LLC owns 0.01% with 0.01 million shares in the company.

Seamands Trust owns 3 million shares that are valued at CA$0.25, and Novadan owns 2 million shares valued at CA$0.25. Both organizations represent strategic investors.

The company has approximately CA$1 million in the bank, and it expects to raise CA$4 to CA$6 million in additional funds. Sage has a burn rate of CA$100 per month in core.

As for potential negatives, the company reports nothing out of the ordinary, but that there are some sellers from previous fundraising efforts that valued shares at CA$0.25.

Sage works with the IR Firm Fairfax partner, and does not work with any influencers. The company does not yet report any analyst or newsletter coverage.

There are 71.51 million shares outstanding, and 51.82 million free float traded shares. The company has a market cap of CA$18.93 million. It trades in the 52-week period between CA$0.17 and CA$0.59.

Important Disclosures:

1. Sage Potash has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000. 
2. Amanda Duvall wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
3. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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