Small Talk: Britain's only listed potash miner signs deal with Chinese

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The Independent Online

Will they or won't they? That was the big question in the mining industry last week: would the Chinese launch a counter-bid for Potash Corporation of Saskatchewan to rival BHP Billiton's $40bn hostile offer? As the world's biggest mining company, BHP has no place in a column about small caps. But if it is trying to take the temperature on whether the Chinese will join it in a battle for PotashCorp, it might take a look at Sirius Exploration, the UK's only listed potash miner, whose shares trade on the Alternative Investment Market.

Last week, Sirius announced that it had penned a memorandum of understanding (MOU) with state-owned Sino-Agri (quite obviously a Chinese company) to help bring its Queensland development into production. It may not be a megadeal, but if BHP's management was in any doubt about Chinese interest in potash before, it should not be now. Sirius's deal with Sino-Agri came in a week when the salt/potential potash estimates for its Queensland project were doubled to 100bn tonnes based on a report from Boyd PetroSearch. Under the MOU, Sirius and Sino-Agri will explore whether to enter into further agreements, such as studying the feasibility of commercial potash production on Sirius's Adavale properties.

"Sirius is pleased to have taken this important first step in developing a long-term relationship with Sino-Agri, a group establishing itself as one of the world's largest potash distributors," said Sirius's chairman, Chris Catlow. "Signing this MOU demonstrates that major fertiliser consumers are concerned about the current concentration of the potash supply and wish to fast-track the development of new large resources."

BHP has always sought out what it calls "tier one" assets, but you never know – if its bid for PotashCorp does not succeed, maybe Mr Catlow will be getting a call from Marius Kloppers of BHP.

Nautilus seeks undersea treasure

To the casual observer, mining is, of course, all about digging dirty great big holes in the ground and taking out whatever is found there.

Not, however, if you talk to Nautilus Minerals. The Aim-listed company has decided that the seabed can be just as fruitful as any mountainside. And the company is, it claims, pioneering a way of combing the sea floor for high-grade copper, gold, silver and zinc deposits.

The plan is to develop Nautilus's site off the coast of Papua New Guinea, bringing the project into production by 2012. The company claims it "will benefit from low extraction costs, high grade ores, 80 to 90 per cent recovery rates and [it] is expected to generate between $500m and $750m in revenues per annum".

The idea is to crush and then smooth the seabed and collect the debris, which is sucked to the surface in a similar way to oil. It is loaded on to ships and ferried around the world. Back in June, Nautilus signed a drilling agreement which will lead to exploration work kicking off in October. The deal has certainly helped the share price, with Nautilus's stock trading 120 per cent higher than it was at this time last year.

AquaBounty may be a great catch

There's nothing fishy about a "biotechnology company focused on enhancing productivity in the aquaculture market". The Aim- listed AquaBounty hopes to get the US Food and Drug Administration to allow it to sell its genetically-enhanced salmon as food in the US.

The company takes a normal Atlantic salmon and adds genes from a Chinook salmon, which makes the Atlantic version grow to a "marketable" size in half the time it usually takes. If approved, the "AquAdvantage salmon" would be the first transgenic animal approved by the FDA for human consumption.

The FDA's veterinary experts will discuss the idea and make their recommendation next month. "This is welcome and exciting news as we near the end of the detailed and necessary process to receive regulatory approval for our AquAdvantage Salmon," said Ron Stotish, the chief executive of AquaBounty. "The meeting will provide an opportunity for the public to understand how the application of our technology will enable the safe and sustainable production of high quality fish.

"We believe the economic and environmental benefits of our salmon will very effectively help to meet the demand for food from the growing world population."

The company is confident the science works, observing more than 20 generations of the altered salmon. It also breeds its fish in enclosures, which, it claims, thereby guarantees that there is no chance of one of its AquAdvantage fish breeding with salmon in the wild.

If the company does finally win approval for AquAdvantage, it will mark the end of nearly a decade of trying but it will not predict when a decision might come through.

"We believe it will be some time this year and hopefully sooner rather than later. However, I would not wish to second-guess the FDA," said Mr Stotish.