Boston, MA 05/19/2014 (wallstreetpr) – Potash Corp./Saskatchewan (USA) (NYSE:POT) received issuer bid exemption and the company is expanding into two new sites.
Issuer bid exemption
PotashCorp has attained an issuer bid exemption from Ontario Securities Commission (OSC) with which, the company can go for private agreement purchases of its common shares from a third-party seller.
Purchases made in this private agreement under the order will be done at a discount. Only one such purchases can be made par calendar week. Such purchases should also happen before the expiry of Normal Course Issuer Bid (the “NCIB”), which will be on August 1, 2014. Another condition is that, the maximum number of shares that can be purchased in such private agreements should not exceed one third of the common shares that can be bought under NCIB.
Expansion
Potash Corp./Saskatchewan (USA) (NYSE:POT) has two expansion projects. These projects will become that by the end of FY2014 and second half of FY2015.
The New Brunswick mine will be completed at the end of 2014, however, the cost of production is higher, and it is $125 per tonne. But the mine is located very near to the North Atlantic Coast, and that will reduce the inland transportation costs. Latin American and Brazilian markets can be served using this product.
The Rocanville mine will be completed in the second half of 2015, and it will be one of the lowest cost mines.
Overall cash cost lowering
PotashCorp wants to reduce its overall average production cost. It wants to achieve that by shifting to lower cost mines. With reduced production costs, profitability of the company will increase. During FY2013, costs of production was $115 per metric tonne, and the selling price was $327 per metric tonne.
In the present financial year, Potash Corp./Saskatchewan (USA) (NYSE:POT) wants to reduce cash production cost by $15-$20 per tonne. And by FY2016, the company wants to reduce production costs by $20-$30 per tonne.
