$1-billion potash investment may not satisfy demand.

"It's my opinion that we'll have four or five or six new potash mines built in Saskatchewan over the next ten to twenty years," calculates Union Securities Vice-President Alan Cruickshank.

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If his bold prediction holds true, and considering it would cost about $1.5 billion to build a single mine if it was started today, there will be plenty of investment flowing into the province.

"If people remember back to when the mines now in production were being built and think what that meant to their communities, they will know this is a fabulous time for rural Saskatchewan," Cruickshank says. "Good jobs, new workers--the benefits are incredible."

Cruickshank's line of thinking begins with existing potash mines that were largely built in the late 1960's and early 1970's. According to BHP Billiton, the world average potash mine produces for about 25 years, leading him to believe we'll need to completely rebuild our potash capacity during our lifetimes. "Actually, we need another new mine simply based on existing demand," he says. There is no substitute for potassium chloride--potash--when it comes to fertilizing crops around the world. Each hectare of corn and sugar cane requires up to 400 kg and 1100 kg, respectively.

"There is an increased demand for soybeans, legumes and other plant-based sources of protein, but at the same time urban sprawl and the decline in arable land is putting more demand on every available acre," Cruickshank details. "Add in the projected demand for bio-fuels and you see Saskatchewan's position--with a substantial percentage of the world's recoverable reserves of potash--is highly enviable."

Cruickshank suggests that Saskatchewan has another advantage. It is good to be flat when it comes to potash--the deposits aren't folded or twisted, just miles of continuous mining. PotashCorp, Agrium and Mosaic are fully aware of the potential and companies such as BHP Billiton--approximately $150 billion U.S. in market capitalization--have also taken notice.

"BHP and Anglo Minerals have established a joint venture and will be spending about $60 million in Saskatchewan with the intention of moving into production," Cruickshank says. "It takes about 5-8 years for someone to put a new potash mine into production, but if demand continues it is inevitable there will be a new mine."

In addition to this new exploration, potash companies operating in Saskatchewan have all recently announced expansions to their facilities to meet the increasing global demand for their product. In the past two years, over $1 billion in investments have been committed to expand potash production capacity at these Saskatchewan facilities

Junior companies find most mining deposits. Major companies tend to be built for production, Cruickshank explains, and don't focus a lot of energy on finding new deposits. They have the infrastructure, management and access to capital needed for a large operation.

"We have a mix of investors in Saskatchewan but most of them haven't been exposed to the junior sector, partly because we don't have a developed capital market," he says. "We haven't had a culture of investment and as a result our companies tend to raise capital outside Saskatchewan."

Cruickshank often asks potential investors their reasons for not looking in their own back yard. After all, they're already familiar with the government, they help shape the regulatory context, and it's easy to research a company's track record when the head office is next door.

"I encourage investors to do the legwork and become knowledgeable about the resource sector," Cruickshank says. "There are a number of very good opportunities in Saskatchewan. The person who does invest will enjoy the rewards of the wealth creation."

While he doesn't buy into the argument that Saskatchewan investors are risk-averse, he does believe they haven't taken advantage of their opportunities. There are, however, experienced investors willing to put their money into Saskatchewan's mineral resources.

Mineral exploration expenditures in Saskatchewan are projected to be a record $277 million in 2007. Junior companies through equity markets will raise more than 70 per cent of this money. When more money is spent then more resource assets will be found, he says, reminding potential investors that investing in the junior resource sector is risky and volatile, and that it is not suitable for all investors.

"In the financial capitals of the world they are very excited about what we have here," Cruickshank says, estimating that people who live here make less than five per cent of the investment in Saskatchewan mining. "There is considerable interest from outside the province and their attitude toward investing in Saskatchewan is extremely bullish."

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