Bob Moriarty of 321gold.com shares his perspective on why Sage Potash now looks like a giant after the second hole lifted resources sharply, and the market sold it off anyway.
‘ve visited hundreds of resource sites across decades of travel, and that experience shapes how I view SAGE POTASH (SAGE:TSXV; SGPTF:OTCQB) today. The latest resource update shows a massive increase that should command attention, yet the shares traded lower on the news.
My background of seeing many different deposits helps me spot straightforward geological patterns others might miss. Potash forms in ancient lake basins where salts settle in layers, and this setting allows wide spacing between holes while still supporting strong resource categories.
The company released its second hole results on October 19, 2026, and the numbers jumped from 298 million tonnes all inferred to 771.5 million tonnes total. Measured and indicated material reached 226.1 million tonnes at a grade above 40%, which ranks among the better deposits globally.
The qualified person applied clear radius rules to arrive at those figures. Measured used a zero to 750 meter influence. Indicated covered 750 to 2000 meters and inferred extended from 2000 to 4000 meters. That approach turned one prior hole into a far larger outline without any change in drilling density.
Last year, the company issued a preliminary economic assessment based on the first hole alone. It carried an after-tax net present value of US$502 million. Scaling the same assumptions by the 259% resource gain points toward a new valuation near US$1.3 billion once the next study arrives. At a current market capitalization of around CA$20 million, the gap appears wide.
Trading volume spiked above 2.6 million shares the day the resource came out, and the price fell from CA$0.115 to a low of CA$0.09. Some of that pressure came from former insiders who left during a management change and chose to sell to the news. The stock had already traded near CA$0.50 with only the initial hole complete, so the drop after better data struck me as odd.
Domestic supply remains limited. The United States imports most of its potash from Canada, and the administration designated the mineral critical in March 2025 with an order aimed at boosting local output. That policy backdrop could open doors for funding or partnerships on a project this size.
Two routes stand out. Large-scale developments need substantial capital, and government support may help move the project forward. At the same time, a handful of major producers dominate the potash market, and they watch assets like this closely. The outlined resource already supports many years of output and billions in revenue, so an acquisition at a premium remains possible.
The company continues to advance studies and will eventually deliver a pre-feasibility report. When that document appears, the market should recognize the scale. I added to my position during the recent selling, and I continue to hold shares bought earlier. The main issue remains low visibility rather than any flaw in the geology or numbers.
Key Investor Takeaways
- The second hole expanded the resource 259% to 771.5 million tonnes, with 226.1 million tonnes now in measured and indicated.
- Grade exceeds 40%, placing the deposit among the higher quality examples worldwide.
- The 2025 PEA showed a US$502 million after-tax NPV on the first hole alone, and scaling suggests over US$1.3 billion on the new resource.
- Market cap near CA$20 million leaves substantial room relative to the updated valuation once further studies arrive.
- U.S. policy now treats potash as critical, which may support domestic development through direct or indirect means.
- Major producers could view the outlined resource as attractive for acquisition at a premium.
- Shares traded lower on the resource release due to selling by former insiders rather than any change in project merit.
Common Questions from Investors
How did the company justify the measured and indicated categories?
The qualified person applied specific radius of influence distances around each hole as described in the October 19 2026 release.
Does the PEA already include the new resource?
No, the US$502 million NPV came from the first hole only, and a fresh study will incorporate the larger total.
Why did the shares decline on positive news?
Volume from former employees selling after the management transition created temporary pressure.
What government action affects the project?
The March 2025 executive order named potash a critical mineral and encouraged increased domestic output.
When will the next study appear?
The company plans to complete a pre-feasibility study at a future date that has not yet been announced.
I bought additional shares on the recent weakness. Sage Potash is an advertiser, so I am biased, and readers should conduct their own due diligence.
- As of the date of this article, officers, contractors, shareholders, and/or employees of Streetwise Reports LLC (including members of their household) own securities of Sage Potash Corp.
- Bob Moriarty: I, or members of my immediate household or family, own securities of: Sage Potash Corp. My company has a financial relationship with: Sage Potash Corp. My company has purchased stocks mentioned in this article for my management clients: None. I determined which companies would be included in this article based on my research and understanding of the sector.
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