New TSX Venture issuer Potash North Corp. (TSX.V:PON) put on nearly $40 million in value Wednesday, and industry insiders predict it could go much higher.

“You’ve got two of the most prominent groups in global mining backing this deal”, said Eric Pratt, mining editor of Resourcex Investor.com. With that kind of financial firepower behind it, Potash North will likely be fast-tracked to a production decision very rapidly.”

The company acquired a 185,000-acre land position in Saskatchewan’s potash belt 20 km away from Mosaic’s (NYSE:MOS) and Potash Corp.’s (TSX:POT)_Esterhazy operations, and 45 kilometres north of Potash Corp.’s Rocanville Mine.

In the last five years, the global potash market has been experiencing rapid growth due to greater demand for food, fiber, livestock feed and biofuels.

The two main drivers of the potash market are population growth and economic growth. The world's population is currently increasing at the rate of approximately 75 million people per year. Population experts predict that by the year 2050 the earth will be inhabited by 9 billion people - an increase from 6.7 billion people in 2008. The majority of this growth is occurring in the developing nations.

As the incomes in these developing nations grow, there is a natural inclination for a more protein-rich diet, which means people tend to eat more meat. This has an amplifying effect on the demand for fertilizer, because it requires about 2, 4 and 6 kilograms of grain to produce 1 kilogram of poultry, pork and beef, respectively. In order to satisfy demand for additional grain supplies, further improvements of yields are required from arable lands, driving the demand for fertilizers.

Potash is a potassium-rich organic product mined from deposits left behind when ancient sea beds evaporated. Potassium (K), one of the key ingredients in potash, is the seventh most abundant element in the earth’s crust. 95% of the global potash production is used for fertilizer in the agriculture industry. Potash can be put straight into the earth as a raw material or it can be combined mechanically or chemically with other nutrients.

Potash fertilizers enhance water retention, disease resistance, and crop yields as well as increasing animal growth and milk production in feed supplements. There is no commercial substitute for Potash in fertilizer.

Potassium assists the macro regulation of plant physiological function. Without potassium plants will not attain maximum growth and yield. There are no other known nutrients that perform the same function as potassium.

Potash is a granular mineral that appears reddish when it is rich with iron, but is often seen as a shade of white. There are two different principal grades: granular and fine, depending on particle size and distribution.

It can be mined “conventionally” or by means of “solution mining” which involves extraction with brine. The Potash North permit application areas would be conducive to conventional mining.

The cost of production is a function of the geological conditions at the mine site. The flat ore bodies that are typical in Saskatchewan’s Potash Basin favor conventional mining, and incur much lower extraction costs than those in other parts of the world, where the potash deposits tend to be twisted or folded.

Asia, Russia and Latin America have low nutrient soils which are being further depleted by continuous cropping. China’s consumption of potash will need to double to meet international recommended Nitrogen/Phosphate/Potassium (NPK) ratios.

China is expected to have a shortfall of 11 million tonnes in 2008. Historically China has been able to negotiate hefty discounts through volume purchasing, but Indian importers have jumped ahead of China and set benchmark potash rates at US $625 a tonne, forcing the Chinese to match this price to acquire orders for the remaining available potash.

Surging global demand for food ensures that these shortfalls will apply upward pressure on the price of Canadian potash exports.

As meat consumption soars, more grain is needed to feed the livestock. At the same time, the world’s population continues to increase. All these new people need somewhere to live. As the cities and the suburbs continue to expand, there is less arable (fertile) land to grow food on.

In 2000, 14% of the corn grown in the US was used in ethanol production. Currently, 30% of US grown corn is used in ethanol production and is expected to increase by another 30% by 2015. Bio-fuels are creating additional yield demands on existing farm land which is further fueling demand for potash.

Visit the company's web site at www.PotashNorth.com.