VANCOUVER — Athabasca Potash (API-T, ABHPF-O) has made it clear that as part of a strategic review process formed to consider possible partnerships on the Burr potash project in Saskatchewan, it is now also considering the sale of all or part of the company.
The tantalizing update sent Athabasca’s share price soaring 35% to $5.51. By presstime, the stock had advanced to over $6.80
Athabasca announced at the end of March that with the completion of exploration and calculation of a resource estimate good enough to support a prefeasibility study, it was time to search for a partner to help finance the project. All told, Athabasca has pegged Burr at 425 million measured and indicated tonnes grading 22.54% potassium oxide.
As it began looking for partners, a process that has led Athabasca to enter into a number of confidentiality agreements, the company says it realized it needed to consider a wider range of options, including selling the whole kit and caboodle.
Though the market reacted strongly to the mere mention of that possibility in mid-July, Athabasca chief financial officer James Davidson downplayed the significance of the company’s statement.
“The reality is we haven’t made the leap (from looking for a partner on Burr) to selling a portion or all of the company,” Davidson says.
He explains that while it is true discussions with potential partners and between management, the board of directors and Athabasca’s financial advisers precipitated the latest announcement that it is at least considering the option to sell part or all of the company, it was in fact last fall when the market crashed that Athabasca first realized it might have to entertain options beyond strategic partnerships.
The realization stemmed from the changed financial landscape where raising great sums of money through issuance of equity suddenly became incredibly difficult.
But while the possibility of selling the company is now officially on the table, Davidson reiterates that Athabasca’s preferred destiny is still to advance Burr, 107 km east of Saskatoon, on its own or with a partner.
“The strategic plan is not to sell the company,” he says.
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