Cash for sulphate of potash producers evaporates

Evaporation is already used successfully overseas, but Australia's would-be SOP producers have discovered it is not as simple as it sounds.

Trigg Minerals' annual report acknowledged last year, there had been commissioning delays and ramp-up challenges: "It takes a period of time to establish equilibrium and achieve full-scale commercial production".

So much so that Trigg is looking at alternatives and better ways of doing it.

The Punter has shares in two of these SOP start-ups, Trigg (ASX code TMG) and Australian Potash (APC). Both are still in the development phase, with no income, and both need regular injections of funds to keep going.

Both have found that investor enthusiasm for their projects has evaporated over the past six months.

Both had disappointing results from share purchase plans last year, and had to give up trying to place the unwanted shares.

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Trigg's latest quarterly report showed that it is burning almost $1.5 million a quarter and has enough cash to carry on for only seven months at the present rate of spending.

Since then, it has raised a mere $1.5 million.

Australian Potash at the end of September had only enough to last four months.

It was hoping to place the shortfall of $3.3 million from its last share offer but had to abandon this in November.

Yet, given world fertiliser demand, both companies have enormous potential - if they can find the cash to carry on.

The Punter, noting that would-be buyers of both APC and TMG shares outnumber sellers at their current low prices, has decided not to sell.

His combined holdings are now worth only $1420.