Nobody wanted this stock at 20 cents. Investors will soon be tripping over each other to grab it at $2. That’s just how the market works.  

Karnalyte (KRN, TSX) has being going krazy!

First you have to grow it or mine it – everything. And with fertilizer you must mine it before you grow it.

So mining is kind of an important industry. You can’t do without.

The mining industry deserves more respect.

Don’t you think?

As per ZeroHedge, Russia is “recommending” fertilizer producers stop shipping product overseas. Russia will just keep all their fertilizer. Or use it in Ukraine. That’s kind of a problem. It’s a problem money can solve, but it will cost more money to get the fertilizer. Potash and commodities are ramping higher.

Russia is 1 of the world’s largest fertilizer producers.

Then there’s China.

Yep, after Canada, Russia and China are the 2 largest suppliers of fertilizer. And that’s the thing about being a supplier – you can choose what price (to some extent) and to whom you sell your product.

Fertilizer is fast becoming an issue of national security.

Even more important than “climate change” (as we have argued repeatedly, and correctly, at BMR, “climate change” has been used very effectively by the left to supposedly “save the planet”, ironically steering us away from the fossil fuels that we urgently need right nowto save the real world from threats from Russia and China. Putin was smiling as Europe became energy dependent on Russia. He was even helping fund anti-fracking movements in Europe, and probably North America as well. ‘Greenism’ helped fuel his war machine).

Back to my main point.

Wheat is the currency of currencies (Lenin actually said that).  

Karnalyte Resources (KRN, TSX)

$1.07 | Market Cap $45 million

They don’t like these stocks at 20 cents but they’ll love em’ at 2 dollars or 3 or 4!

That’s one of my new sayings – it’s the weirdest thing but it’s true.

Psychology and basic mathematics.

All the tools you need to be super successful with stocks can be found within psychology and basic math.

We were just talking about the importance of mining and food. We can’t do without.

Karnalyte owns a 50+ year supply of fertilizers, in Canada. And in fact the fertilizers are stored in an even safer place than “Canada”. It’s in Saskatchewan!

Yes, pro-mining, pro-investment, pro-business Saskatchewan. We love Saskatchewan!

150+ million tonnes.

With only 42 million shares outstanding every 1 share of KRN is underlined by 3 tonnes of Potash.

That’s some serious leverage.

This is a construction ready project.

It’s advanced. And it’s big.

It’s really the largest fertilizer project, located in the best place, that isn’t owned by a major.

The Bankable Feasibility Study was done.

It showed a net present value (NPV) north of $3 billion.

New numbers will be published soon, and it wouldn’t be crazy to think the updated NPV will be even higher.

What does that mean?

It means if Karnalyte’s share structure stays the same, it could trade for dollars per share.

$3 per share would equate to a market cap of about $120 million. And $120 million would be just 4% of NPV, or less (assuming the new NPV is better). 4% of NPV is not a rich valuation.

Keep in mind, Gujarat State Fertilizers & Chemicals (GSFC, BO) paid $8.15 per share to get their strategic stake. Gujarat also had a non-binding term sheet in place. Their financing package, mostly debt, was for $700 million.

We’re talking big money.

Nice people are starting to notice.

A while back I’d pondered through my writing here…what might happen when KRN has a 1+ million volume day?

Now we know.

Friday it traded 1.4 million shares and the stock was up 65%.

The new high is $1.30 per share. A good ways from 12 cents, the yearly low.

Tomorrow and the balance of this week will be fascinating.