The West Australian - - WESTBUSINE­SS -


Hart­leys sees Aus­tralian Potash as un­der­val­ued on a com­par­i­son of its peers in the small but ul­tra-com­pet­i­tive sul­phate of potash de­vel­oper sec­tor.

The bro­ker said the com­pany was funded to the com­ple­tion of its de­fin­i­tive fea­si­bil­ity study on its Lake Wells project, which could be re­leased as soon as next quar­ter.

“Aus­tralian Potash has an en­vi­ous po­si­tion of hav­ing a deep palaeochan­nel (three to four times deeper than its peers) which is ex­pected to make the es­ti­ma­tion of re­serves, and the ex­trac­tion of the brine eas­ier,” Hart­leys said in a note to clients.

It sees project fund­ing as the key risk for Aus­tralian Potash, as­sum­ing a favourable study out­come is de­liv­ered.

The bro­ker main­tained its spec­u­la­tive buy rat­ing on Aus­tralian Potash, with a price tar­get of 25¢ com­pared with yes­ter­day’s close of 7.5¢.


The im­po­si­tion of anti-dump­ing du­ties on am­mo­nium ni­trate im­ports from Swe­den, Thai­land and China is good news for Orica, which makes the fer­tiliser and ex­plo­sives in­gre­di­ent, ac­cord­ing to Deutsche Bank.

It es­ti­mated the re­duced threat of cheap im­ports could cause prices on the east coast to in­crease by about $50 a tonne in the longer term.

Incitec Pivot is an­other win­ner from the de­ci­sion but both com­pa­nies will have to wait a few years for a sig­nif­i­cant cash boost. Orica has only 5 per cent of its vol­umes out of con­tract this fi­nan­cial year and 15 per cent the year af­ter. How­ever about 80 per cent of its vol­umes will feel the ben­e­fits less dump­ing the year af­ter.

Lit­tle im­pact is ex­pected on the west coast, as Deutsche ex­pects the mar­ket to be over­sup­plied for at least the next three years. Orica owns 45 per cent of the Pil­bara plant op­er­ated by Nor­way’s Yara that has been plagued by tech­ni­cal prob­lems and is ex­pected to restart pro­duc­tion next year.

The bank has re­tained a hold rat­ing on Orica, which closed yes­ter­day at $20.98, a 16.5 per cent pre­mium to its tar­get of $18 a share.


Credit Suisse said re­sults for the Do­rado field which San­tos op­er­ates off the Pil­bara had pro­vided more con­fi­dence in the com­mer­cial vi­a­bil­ity of an oil de­vel­op­ment, and in­di­cated po­ten­tial up­side.

It dis­counted Do­rado as a gas play be­cause of the lack of a mar­ket ac­cess route in the near term but said it looked in­creas­ingly vi­able as an oil project.

“We also note Wood Macken­zie value Do­rado at $US1.26 bil­lion so there is plenty up­side po­ten­tial be­yond our more con­ser­va­tive es­ti­mate,” Credit Suisse said. “We see up­com­ing cat­a­lysts from Do­rado, Barossa, on­shore pro­duc­tion in­creases and Pa­pua New Guinea ex­pan­sion progress.” That was bal­anced by down­side risks from LNG con­tract price re­views and po­ten­tial de­lay in PNG, and longterm risk in sus­tain­abil­ity of pro­duc­tion costs at the GLNG and Cooper Basin projects.

Credit Suisse in­creased its tar­get price for San­tos by 5¢ a share to $6.40. The stock closed yes­ter­day at $6.87.

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