Potash Lease

[Unusualmuse]

We have 160 acres and recently was offered $40,000 on a sale, or $20 per acre signing bonus for a 21 year lease on the mineral rights. Our lawyer advised us that leasing was the more profitable route. I understand that revenues flex depending on the price of the potash and their costs to extract. She also advised that if an oil and gas company approached, we would not be able to have any kind of second lease other than farming.

I am wondering what an average quarter section would see as revenue once they do start to work under the property, and if someone could confirm that no other lease can be shared.?
Thanks

[bucket]

I know nothing about this but if it's based on the price of potash get them to use the retail price at your local retailer.

It's about 250 dollars a tonne higher than their production costs or higher than their price to the Asia countries.

[boarderbloke]

Do you not get a percent of the potash removed from your minerals, like an mineral lease for oil & gas? or do you just receive this flat acreage payment?

[farmaholic]

Is it the fact they won't allow leasing different minerals on the same property.

Or is it interference with each other's extraction processes. Oil and potash. Or where one exists the other doesnt?

I thought I heard something about "zone" leases in oil country?

I know nothing about this but would.like to hear an informed opinion.

[BreadWinner]

Because we arn't French.

[oldjim]

Farming in France must be a real riot.

[sumdumguy]

Alberta allows leases in layers, I am told Sask not.

[LEP]

The government leases different zones to different companies. I am sure they did that near Midale.

I would make sure that you spoke to a lawyer with experience in resources. The advice you get ain't worth a pinch of salt otherwise.

I would think the biggest impetiment to leasing different minerals would be the proximity of pay zones although I doubt there is oil very close to any of the potash mines.

Using retail price of potash is a non starter. It would be like saying you want to use pump price for oil royalties.

[pourfarmer]

I guess everyone is content to just sit and bitch on a internet forum about how they're getting screwed.

[Braveheart]

Good one old jim.

[fjlip]

They have pulled this many times over the years, must have a hell of a union/organization to work together. Good on them, not like us "NICE" Canadians just take the abuse.

[checking]

It appears the potash company (maybe), but could just be a speculative land company wants to tie up your 160 acres of potash minerals for 21 years for the grand sum of $3200.00 of chump change. Did you ask who you were dealing with?

If it's the later, and you signed, then you just gave, whoever, decades to pedal your potash minerals for their own gain through subleasing with no assurance they will ever be produced, which is where your royalty percentage makes you the big bucks.

Yipes, 1950 revisited!

[parsley]

A potash company offered me money to buy my mineral rights several years ago.
I ignored them.

The potash company then offered to lease my mineral rights.
I ignored them
The potash company then offered to both buy some of my mineral rights plus lease some of the mineral rights
I ignored them.

The potash company then asked me what I wanted.

I said I want to keep the rights to other minerals, for example oil, but perhaps would be willing to renegotiate leasing. perhaps.
We agreed they will wait for me to call them. Parsley

[foragefarmer]

Canadian farmers spent way to much time judging and criticizing each other. Just look how many on here want supply management removed.

When a thread was started about some sort of drought assistance the battles were endless.

When threads are started about basis levels being unreasonable or why the U.S.A dollar isn't used in pricing, many on here will say the grain company is your partner and to work with them.

As far as I'm concerned everyone in industry and in politics has Canadian grain farmers at the bottom rung of the ladder. That's where they want us, and that's where we're going to stay.

Agriville is the prefect example.

Good on the French farmer.

[Braveheart]

You make your own future Forage. If you say you're on the bottom rung of the ladder, you're on the bottom rung of the ladder.