Buffalo Potash Corp. (TSXV: BUFF; OTCQB: BLPTF) because potash is in the news
Buffalo is a Saskatchewan potash developer. Its main asset is the 100%-owned Disley Project, using solution mining and its patented/patent-pending Horizontal Line-Drive technology. The company is trying to get a small initial production module operating first, then build two much larger mines.
MRQ EPS was -$0.02 CAD in Q2 2026, versus approximately $0.00 in Q2 2025.
The pipeline is the Initial Production Module, designed for 125,000 tonnes/year of soluble-grade potash. Buffalo is targeting first production in Q1 2027. The company has now completed the first two horizontal wells and is drilling the third.
For the larger Disley Project, the PEA calls for 1.0M tonnes/year of granular MOP plus 125,000 tonnes/year from the IPM. The PEA estimates US$639M of total initial capital, steady-state revenue of US$442.5M and EBITDA of US$251M. Those are PEA estimates, not operating results.
Buffalo mineral resource is 399.7Mt measured, 1,267.4Mt indicated and 2,663.2Mt inferred, at roughly 35% KCl. The measured + indicated resource contains about 582Mt of KCl.
At June 30 Buffalo had $15.1M cash and essentially no debt. But it consumed $6.0M in operating cash during the first six months. That gives roughly 15 months of runway at that historical burn rate, before considering construction spending. Construction of the IPM means future cash requirements will be substantially higher than ordinary corporate burn.
First production is targeted for Q1 2027. The PEA gives the IPM an approximately 12-month payback from the start of production, but that depends on the PEA assumptions and successful construction/startup.
For the full project, Disley East construction is scheduled to begin July 2027 with operations targeted for July 2029. Disley West construction is also scheduled for 2027 with operations targeted for October 2029. A feasibility study for those larger mines is the decision gate before proceeding with their construction.
The biggest financing issue is the full project's approximately US$639M capital requirement. Buffalo cannot fund that from its present cash. It will need substantial additional financing, probably a combination of equity, project debt, strategic financing and/or partnerships. That creates considerable future dilution risk.
Long-term debt is effectively zero. At June 30 total liabilities were only $3.19M, consisting mainly of payables and a $2.48M flow-through premium liability.
Assets were $16.0M at June 30, almost entirely current assets. Cash was $15.1M.
Buffalo has been financing itself primarily through equity. In June 2026 it raised $14.85M through a private placement, issuing 28.0M securities. The hard-dollar units were priced at $0.45 and included warrants; flow-through shares were priced at $0.52.
Dilution has been substantial. Shares increased from 43.1M at June 30, 2025 to 81.1M at December 31, 2025 and 109.7M at June 30, 2026. Buffalo's July capitalization showed another 25.3M warrants, 8.9M options and 3.2M RSUs, for approximately 147.3M fully diluted shares.
At today's $0.79 price, the basic market capitalization is roughly $87M. The fully diluted share count makes the effective equity value closer to $116M before considering the exercise proceeds from warrants/options.
One additional risk appeared today: the U.S. announced negotiations to purchase potash from Belarus at lower prices. Reuters reports that Nutrien and other fertilizer stocks fell following the announcement.
Disclosure: 600 at $0.75 CAD