Sirius Exploration is a company that's changed dramatically over the past year or so. In the report and accounts to March 2009, management refers to a “year of transformation” [1] , and in that time the company has moved from being a gold, iron, copper based minerals explorer to a focus on potash and salt.
Er, potash? Not the best known of industrial minerals. However, there is a major market for it - 93 percent of potash sells into the agricultural market, being used as a key ingredient for fertiliser. And as major industry player Potash Saskatchewan points out, in the long term demand for fertiliser is only going one way, up - the need to increase agricultural yields in the developing world together with increased grain production will lead to higher demand [2] . Meanwhile, although like other minerals potash has seen prices come back since the record high in February 2009 of USD 870 a tonne, the potash price is still nearly double the USD 200 a tonne seen earlier this decade.
Mind you, these are still exploration prospects; the company hasn't yet become a producer. But its North Dakota acreage is right next to existing potash producing fields, and though the company has no reserves to JORC standards, it has decent looking prospects.
There are three big potash and salt prospects. First, North Dakota. The Dakota Salts are an extension of the big deposits over the border in Saskatchewan that are already producing and highly profitable, in the Williston Basin. BHP and Potash Corp's holdings are about 180km north of the Dakota Salts acreage. Now I don't know whether it's the case for Dakota, but the Saskatchewan deposit is probably the world's highest grade potash, so Dakota presumably follows suit. And according to the company, the Dakota deposit is a good thick one, so that looks right for a commercial development. Sirius is now accelerating development here with the intention of reaching cash flow as quickly as possible.
North Dakota is apparently the windiest state in the US. (No, it's not the refried beans. That's New Mexico.) It's a big focus for wind power, and that's where there's potentially a huge opportunity for Sirius. Wind power being an intermittent source of electricity, it needs to be capable of being stored in some way. CAES (Compressed Air Energy Storage) uses the electricity…