Ringbolt Comes Alive
Passport Potash continues to march forward with their consolidation of the Holbrook Basin in Arizona. I was looking through some press releases for Passport Potash (PPI-V) on Friday when I realized that they did an option on 15,000 acres of ground in the Holbrook Basin back in March with Ringbolt Ventures (RBV-V).
Passport looks pretty cheap at $.54 after a run to $1.86 earlier this year but their partner in the JV, Ringbolt looks absurdly inexpensive with $.09 in cash and $.05 in Passport shares coming their way. When I first looked at the shares they were $.20 but someone else sees something and the shares closed up $.08 or 40% on the day on 1.1 million shares traded.
Iíve written about Passport Potash several times. Basically they hold a commanding position in the Holbrook Basin in Arizona containing an estimated 2.5 billion tons of K2O. Passport controls over 121,000 acres in the basin or 190 square miles with the recent addition of 41,000 acres with their deal on the Fitzgerald Ranch.
As I have tried to get across before, Peak Oil means Peak Food. We all now understand we hit peak oil in 2005 and the cheap oil is gone. The same thing is true of food production. The cheap food is gone and we need to feed more mouths each year with less energy inputs. That is going to require a lot more potash, used for fertilizer to increase the efficiency of the available land.
According to John Williams of ShadowStats.com, price inflation is running at an annual rate of 11.2% in the US. Government statistics show it lower but thatís only if you donít buy food or fuel.
Food and water are going to be giant issues for most of the world over the next 20 years. Potash producers are going to be about as close to a sure thing as happens in investing. Passport is in the midst of an aggressive program to lock up the Holbrook Basin. Ringbolt is not only a cheap way to buy Passport shares, they have a giant Utah potash program of their own with drill results pending.
Ringbolt completed their first drill hole in early August 2011. Results are due in 4-6 weeks. The first hole was located near hole #S-77-35P shown on the following chart. Past results in the Lisbon Valley Paradox Basin showed two potash beds with extraordinary values of 15 feet of 18.5% K2O in Bed 5 and 19 feet of 31.09% K2O in Bed 9. Only the drill results will confirm those values but basically Ringbolt is fishing for whales.
Potash prices rocketed higher in 2008, up to over $850 a ton before crashing to $350 a ton in early 2010. They have recovered to $461 a ton today. Potash is in high demand and as population pressure increases, there will be a corresponding increase in prices for the inputs to food production.
Passport Potash holds a commanding and growing position in the Holbrook Basin in Arizona. Ringbolt is drilling in a highly prospective area of the Paradox Basin in Utah with results due shortly. Ringbolt offers an inexpensive play on both Passport and themselves.
I own Passport shares; I have participated in two different private placements over the past three years. I tried to buy some shares in Ringbolt last week but before I could get much of a position, the price ran away from me. If the price drops from here, I will be a strong buyer.
Passport Potash is an advertiser. I have visited the property and I know the management well. Ringbolt is not an advertiser even if they should be and I donít know anything about management but it seems to me a cheap way to buy cash and Passport shares. I am biased in both cases. As always, you are solely responsible for your own investment decisions. I share not in your profit or your losses.
Passport Potash Inc
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January 17th, 2020
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