Just because Australian natural resource giant BHP Billiton picked up a junior producer in Athabasca Potash Inc. for a healthy $341-million last week unfortunately does not mean every Saskatchewanian potash miner suddenly becomes a takeover target, a new note from Scotia Capital says.
"The recent acquisition of Athabasca Potash by BHP was unique due to the potential synergies that the Burr project offers BHP's Jansen project," Ben Isaacson, analyst with Scotia, said in a note.
The Burr and Jansen projects are adjacent to each other, giving BHP some 14,000 square kilometres of exploration ground in Saskatchewan.
This is bad news for, say, Western Potash Corp., which Mr. Isaacson does not expect will be taken over by BHP or anybody else in the near future.
"We believe there is a low likelihood of Western Potash being acquired due to its limited progress to date relative to its peers," he said.
In any case, Mr. Isaacson and others await resource estimates on the company's Milestone project in Saskatchewan and Russell project in Manitoba, both of which remain in the development stage.
Mr. Isaacson maintains a Sector Perform rating and 80 cents target price for Western Potash.