While excellent investment opportunities come in all sizes, the most significant ones may still lay in the nano-cap space, where low-priced stocks with big-time prospects can sometimes provide exponential gains. Of course, the price of a stock isn't the only contributing factor to investment decisions. Investors also need to appraise market potential, opportunity, fundamentals, sector focus, and the position a company is in to turn ambition into revenues. With those factors in mind, Millennial Potash Corp. (OTCQB: MLPNF) (TSXV: MLP) stock is particularly worthy of consideration.
And at roughly $0.26 a share, it's a potential bargain given the value the stock could offer. Shares had traded as high as $0.48 over the past 52 weeks, and considering that MLNPF is better positioned for growth today than when it scored that high, suggesting an initial target 84% higher than current share prices could be an achievable near-term objective. In fact, investor interest is already accumulating in this thinly traded stock, with trading volume hitting levels not seen since early in the company’s history. There's a saying, "Volume precedes price." In this case, paying attention to that signal - and potentially acting upon it - could prove worthwhile.
There are reasons justifying the immediacy.
Providing Relief to a Fertilizer Market Stranglehold
Foremost is that Millennial Potash is doing the right things, with the right plan, at the right time. Their focus and timeliness present opportunities to tap into a more than $30 billion global potash market opportunity. Moreover, they can help alleviate what's been described as a stranglehold by Russia and China on worldwide food security. This stranglehold is partly a result of the ongoing conflict between Russia and Ukraine, which has caused significant disruptions in the global fertilizer market that have led to unstable food supply markets. In fact, the United Nations has identified 48 nations within Africa, Asia, and Europe as extremely vulnerable to the fertilizer supply imbalance resulting from this conflict.
Some are comparing the need for fertilizer to that of the semiconductor chip shortages that crippled supply chains and manufacturing in 2022. Markets gave plenty of headline space to that issue, even though lives weren't necessarily at stake. Yes, chips are important, but not quite to the level of food. Thankfully, coverage is finally picking up about the need for fertilizers, with the race to secure and stabilize supplies now a critical issue for global leaders. The U.S. is no exception.
There, the State Department is increasing its focus on fertilizers, with political leaders addressing the issue and including it prominently among the topics discussed at political events. Those paying attention to the subject understand the magnitude of the problem, particularly the fact that most countries do not control their own destiny regarding food and fertilizer supply. That reality has intensified the need for this discussion to be included in talks during international diplomacy.
That's important, considering that Russia and its allies account for almost 25% of global crop nutrients exports. Although agricultural products, including certain fertilizers, are supposedly not subject to sanctions, take that with a grain of salt. Countries being squeezed generally don't reciprocate kindly. In fact, Russia and others sympathetic to their cause have significantly curtailed fertilizer exports.
The disruption in trade has led to price spikes and stockpiling, creating an inflationary impact on global food prices.
None of what's happening in the market is good news. But it's not all doom and gloom, either, as several companies are working to change the dynamic. Millennial Potash Corp. is one of them, and their initiatives could bring great news on several fronts.
A Nano-Cap Company Seizing Billion-Dollar Rev-Gen Opportunities
Indeed, MLPNF has the potential to tap into a significant revenue-generating opportunity while simultaneously playing a critical role in fortifying the global fertilizer supply chain and alleviating concerns about food security and the substantial dependency on a few dominant suppliers. The great news is that they have the assets to make a difference.
Millennial Potash Corp. operates from valuable potash assets that present near and long-term revenue-generating potential. Importantly, they supply a hungry market, tapping into portfolio properties that include the Banio Potash Project in Gabon, known to hold substantial reserves of potassium salts. In fact, it's estimated that over 2 billion tons of potassium salts are waiting to be uncovered within this project, making it one of the world's largest potash basins. What’s even more promising is that MLNPF has published updates demonstrating its commitment to fast-tracking the Banio Potash Project. These updates have included information about historical drilling and plans to expand the project, which it can accomplish quickly by taking advantage of established infrastructure systems that allow unimpeded access and higher operational efficiency.
Work there is timely, as the global fertilizer industry is hyper-focused on finding alternative sources of supply. That's more than excellent news for those needing what MLPNF sells; it's potentially fantastic news for the company and investors in a position to benefit from favorable market conditions showing extraordinary demand for fertilizers. MLPNF can score a significant share of that demand by providing a reliable and diversified supply of potash, an objective they can achieve by expediting exploration initiatives and maximizing the value of its assets in mining-friendly jurisdictions. That includes nurturing its flagship Banio Potash Project in Gabon, which indicates excellent potential due to its location in the established potash-bearing basin and proximity to significant potash markets.
Keep in mind that the Banio Potash Project is already at an advanced stage of exploration. That's due to a solid contributing infrastructure that includes an established exploration camp, drill rigs, and drill cores on site, an investment signifying MLPNF's commitment and intent to move this project forward to maximize its expected inherent value. In addition, the company announced hiring global industry leader Ercosplan to complete a NI 43-101 compliant technical report on the project. Not only does this move add fuel to its mission, but it also demonstrates MLPNF’s commitment to transparency and adherence to industry compliance standards.
Key Management in Place to Steer 2023 Agenda
Decisions are being made by an experienced team of industry professionals who bring valuable strategic expertise to the company. The team has a strong track record of building, exploring, and monetizing assets, which is particularly noteworthy given that assets can hold value even while underground. In other words, MLPNF doesn't necessarily need to bring assets to market to earn its financial rewards. Proven assets are also balance sheet multipliers and often attract partnerships that provide most or all of the investment capital needed to bring the mined assets to the markets.
With this in mind, MLPNF and its investors have a clear shot at near-term revenue-generating goals. The opportunity is amplified by the heightened urgency to secure fertilizers and potash to serve surging global demand and fill the supply chain gaps. Remember, MLPNF wants to do more than deliver goods to market; they also want to revolutionize the fertilizer industry through its commitment to sustainable and responsible mining practices. That difference additionally benefits those wishing to partner, potentially cutting considerable red tape to expedite moving from exploration to development phases.
But know this: Millennial has the intrinsic strength to go at it alone. Led by Farhad Abasov, the Chairman and Director, and Graham Harris, the Senior VP of Capital Markets and Director, management at MLPNF benefits from the experience and strategic vision that propelled Millennial Lithium to its highs. Farhad Abasov is well-respected for his business track record, including successful ventures with Allana Potash Corp. and Millennial Lithium, both acquired for significant sums. On the money side, Graham Harris has proven his ability to raise capital when needed and couple it with defined strategic goals to maximize assets and opportunities. More simply, MLPNF can carry out its mission alone.
And they have. Under the guidance of the current management team, Millennial Lithium stock surged from $0.06 to $4.70, an over 7,733% gain that ultimately led to that project's acquisition by a major player in the lithium market. History can repeat itself, noting the location of company assets, product demand, and intrinsic value already appreciating at its Banio Potash project.
Bullish Trajectory in 2H/2023
All told, MLPNF is in a sweet spot of opportunity. Given the company’s inherent strength, its share price presents a window of opportunity worth considering. Remember, MLPNF shares tend to run higher quickly when the bulls sense a valuation disconnect. In fact, that may be happening now, noting the significant increase in volume over the past three trading sessions. As alluded to earlier, that increase could be a precursor to higher share prices.
And a move higher wouldn't be unwarranted, considering Millennial is a fast-growing company with projects in motion. Moreover, demand for the products they intend to sell comes from a global stage. However, MLPNF wants to do more than feed demand to generate appreciable revenues: part of the mission is to reduce dependency on a few key suppliers, diversify the fertilizer supply chain, and mitigate the risks currently associated with the global fertilizer trade. And with its Banio Potash Project's location near major potash markets, including those in Brazil and several Asian countries, MLPNF appears ideally positioned to capitalize upon a massive sales opportunity supported by reduced transportation costs and a greater ability than others to contribute toward maintaining reliable supply chains.
MLPNF's contribution is needed more than ever, as estimates indicate the global annual Muriate of Potash (MOP) capacity has been reduced to a very low 55 million tonnes. This figure exposes a wide gap between supply and demand, making potash potentially worth more than gold in many respects. While MLPNF isn't a gold play, savvy investors are treating potash the same, and the recent interest in MLPNF stock could make its current price a springboard instead of a platform. Assuming volume precedes price remains true, that's a likely scenario.
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