Sunkar claims fertile prospect
Article Date: Oct 03 2008Kazakhstan-focused phosphate fertiliser hopeful Sunkar Resources says it is on track to produce profitably an annual 200,000 tonnes of ore.
Steered by chief executive officer Serikjan Utegen, Sunkar, which floated on AIM in June with a £33.6 million placing at 120p, has seen its shares drop sharply since then and the other day it revealed first-half losses up 150 per cent to $1.2 million (£680,000). However, the company’s finance chief Donald Sinclair says it is now mining ore at its Chilisai project and will soon have the crushing and screening equipment in place to produce ‘beneficiated rock’ for conversion into fertiliser.
Sunkar’s licence from the Kazakh authorities commits the company to spent $20 million (£11.3 million) to produce 200,000 tonnes of ore, which, says Sinclair, should yield 100,000 tonnes of beneficiated rock. At an estimated 17 per cent grade, this should provide Sunkar with $20 (£11.35) a tonne, he argues.
Eventually, Chilisai, whose resource is near to surface, should be able to produce diammonium phosphate at a cash cost of $125 a tonne for the still-buoyant agricultural markets of India and China, argues Sinclair. This compares with a recent price of $1,000 a tonne, though the price can be volatile.
Since flotation, Sunkar’s shares have sunk to 26p, valuing the company at £41.5 million. If Sinclair’s hopes are borne out, this could prove a grudging rating.
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