Tectonic Metals gets funding for gold exploration in Alaska
The company's Flat gold project is located 40 km north of the giant Donlin gold project.
Shares of Canadian Potash Corp. of Saskatchewan (TSX:POT), the world’s largest producer of the fertilizer by capacity, and rival Agrium (TSX:AGU) were halted Tuesday on the Toronto Exchange, after the firms revealed they are in preliminary merger talks.
If successful, the tie-up could produce a fertilizer giant worth more than $30 billion.
In a brief statement, Potash Corp confirmed it is in the midst of discussing a business combination with the Calgary-based fertilizer producer, but noted that no decision has been made as to whether to proceed with such a link-up.
“No agreement has been reached, and there can be no assurance that any transaction will result from these discussions,” said Potash Corp. The same statement was published by Agrium on its website.
If successful, the tie-up could produce a fertilizer giant worth more than $30 billion, Bloomberg reported, citing unnamed sources. It would be the biggest Canadian merger since CNOOC Ltd. bought Nexen Energy ULC in 2013
A global oversupply of the fertilizer has caused prices to tumble in the past year, leading to layoffs and mine closures across the sector.
Prices for the fertilizer ingredient began their decline four years ago, as weak crop prices and currencies weakness pinched demand. Potash has also suffered from increased competition following the breakup in 2013 of a Russian-Belarusian marketing cartel that previously helped limit supply.
Potash’s collapse picked up speed in the past year, putting additional pressure on producers, whose profits have been hit by falling prices, largely due to weak currencies in countries such as Brazil and low grain prices.
Earlier this month, world’s largest miner BHP Billiton (ASX, NYSE:BHP) (LON:BLT), revealed it may place its Canadian Jansen potash project in the back burner if prices for the fertilizer ingredient don’t pick up by the end of the decade.
Before trading was halted, PotashCorp stock had gained $2.40 or 11.48% to $23.30 on the day and Agrium was up $8.28 or 7.1% to $124.81.
