York Potash Shares in Free Fall
Sirius Minerals’ house broker, Jefferies, has issued a controversial assessment of the SXX share price. Jefferies have assessed current market conditions, the state of the York Potash planning application made to the North York Moors National Park Authority (NYMNPA) and come to the conclusion that the Net Present Value (NPV) is 9p. The broker has slapped an ‘UNDERPERFORM’ rating on SXX shares.
The Potash market is in turmoil after last weeks announcement that Uralkali have plans to exit the Belarusian Potash Corp, which has helped sustained high global Potash prices for years by matching demand with production. It is expected that global Potash prices will drop from $400 a tonne to $300 a tonne in the medium term.
York Potash recently deferred their planning application. It is thought that the planning application for a mine at the Doves Nest site will now be put before the NYMNPA Planning Committee sometime in 2014. A drilling rig located at Doves Nest, which was boring holes where the mine shafts were to be located, is leaving site. It is not known if the movement of the drilling rig was scheduled.
Sirius shares opened at 16.5p this morning and have quickly dropped to 12p, a 25% loss of value and a new 12 month low. The volatility of the AIM market has seen Sirius shares slump from a 12 month high of 29p in February.
UPDATE 16:40PM: Sirius Minerals have confirmed that the Company’s brokerage contract with Jefferies Hoare Govett (“Jefferies”) has been terminated and Jefferies will cease to be a broker on 26 August 2013 at the end of the contractual three-month notice period.