Patrick J. Laracy, the Chairman, CEO and President of Vulcan Minerals
With access to infrastructure and the support of Vulcan Minerals, Red Moon Potash has identified a potash zone in mining-friendly Newfoundland.
Vulcan Minerals has spun off one of their divisions after identifying a potash zone in Newfoundland. Red Moon Potash has been trading publicly since August, 2012.
Recently, Metals News had the chance to speak with Patrick J. Laracy, the CEO and President of Vulcan Minerals who has led the spin-off of Red Moon. He said, “As you know Vulcan Minerals is the primary investor. We own 60% of the Red Moon Shares”. Laracy explained how Red Moon came into being. He said, “Vulcan Minerals has been involved in exploration in western Newfoundland for some time. A byproduct of that project was the discovery of a deposit of potash. We have drilled two holes in it. As a result, we decided to create a new public vehicle to fund the delineation of that deposit, and determine if it has any commerciality. That required the development of a new public company called Red Moon Potash, Inc., listed on the Toronto Venture Exchange. It started trading on August17th of this year. It's a new story and we are pretty excited about it. We will be doing a financing somewhere in the next six months to do a major round of drilling. We are anticipating our drilling project to commence in the spring of 2013.”
Red Moon Capital Structure
- Vulcan Shareholders 15,000,000
- Vulcan Retains 20,500,000
- Shares Outstanding 35,500,000
- No Warrants
The initial potash discovery was discovered in a petroleum exploratory hole. Laracy said, “We encountered a potash zone at about 280 meters deep. It is a sylvite layer within a halite-salt sequence. It has the right mineralogy and is approximately five meters thick. We have grades in excess of 20% of potassium oxide, which is a standard measure of potassium concentration, so we know we've got potential grade here.” Laracy and his team are now working on a critical issue. He said, “The question is: How much tonnage do we have? In order to answer that question, we're going to need eight or ten holes to properly delineate the deposit. That's the challenge that Red Moon Potash has – to find out if we have a resource that we can take into production.”
At this time, Red Moon requires a financing to carry out the proposed drill program. We will need to raise in stages, up to $10 million dollars for Red Moon. Right now it has seed capital of $750,000 dollars but will need third party financing to raise the rest of the funding.
There are many positive aspects to the project. Said Laracy, “A couple of interesting things about the location of the potash: it was discovered in western Newfoundland. It is only 5 kilometers from a deep water port, so we have fantastic infrastructure. We have a road leading to the port and to the loading facility. We have high-voltage power on the property. The Trans-Canada highway cuts right through the property. We are operating in a rural part of Newfoundland, so logistically it is an ideal location.” In addition, there is a similar producing mine nearby. Said Laracy, “Our analog is the Sussex Mine in New Brunswick which is in the same geological sedimentary basin. The Potash Corporation of Saskatchewan has been mining potash in the Sussex area for several years.” In fact, that project has been so successful that they have expanded the facility. Laracy said, “They are currently wrapping up an expansion of the mine from 800,000 tons a year to 2 million tons a year amounting to about a $2 billion dollar investment. We are in the neighborhood with the largest potash producer in the world and we've got rocks that are comparable. So, we've got a story that requires further investigation.”
As Red Moon develops, it is being led by an experienced group of managers. Said Laracy, “Our group consists of myself as the President – I'm a geologist by training, also a lawyer – we also have another geologist on staff. We have a full-time corporate CFO and business management group. We have a series of contractors that we use on a regular basis, geophysicists, and engineers. On our Board of Directors, we have a former Minister of Mines from Newfoundland. We have a corporate executive who was the founder and chairman of Mag Industries. That is a company that brought a potash deposit in West Africa to the feasibility stage, which was sold to Chinese interests. We've got a good group of people and we are continuing to look for additional potash executives. I'd like to find a CEO or a Vice President, with the right experience, who can advance the project, so we are in the process of looking for that individual or individuals.”
For investors interested in a potash play, Laracy believes that Red Moon is a ground floor opportunity. He said, “It's early stage. It is highly speculative. It is in the discovery stage, really. This is where most of the risk lies. Of course, there are the offsetting rewards that may be available on a play like this. So, the upside is there. You have to enjoy that type of risk profile. The benefits are clear. Laracy said, “It has no infrastructure challenges which is a competitive advantage compared to some other early stage potash projects around the world. We have an analog mine in the same geological basin. These are all compelling factors that would entice somebody into investing in Red Moon Potash. We have only 35 million shares outstanding including the 15 million shares to Vulcan shareholders by way of our spinout in August. We've got a good shareholder base. We are expecting the value to move up as the market becomes a little more liquid. Until we do a major financing, I don't think you'll see a lot of trading on the stock, but there certainly is an opportunity there for individual investors to pick up shares at what we think are reasonable prices.”
For investors who are looking for an entry opportunity for potash, Red Moon Potash may be a company worth further investigation.
http://www.vulcanminerals.ca/
Vulcan Minerals Inc.
333 Duckworth Street
St. John's, NL
A1C 1G9
Canada
Phone: (709) 754-3186
Fax: (709) 754-3946
Email: info@vulcanminerals.ca