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Disappointing results take sheen off Intrepid Potash debt deal

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Intrepid Potash shares trimmed the previous session's sharp gains, as it reported worse-than-expected losses.

But the share price is still up since the US miner reached an agreement with its creditors, to amend the terms of its loan agreements.

As well as resolving the terms of the current debt, Intrepid announced on Monday evening that it had negotiated access to a fresh $35m line of credit with the Bank of Montreal.

'Strategic options'

"This amendment and the new credit facility provide us with added financial flexibility and time to execute on our strategic plan as we continue transforming our business model during this down cycle in the fertilizer market," said Bob Jornayvaz, chairman and CEO.

Mr Jornayvaz said the agreement unblocked some "strategic options" for the company, teasing the possibility of future expansion.

Intrepid shares in New York rose as much as 27% on the news, before finishing up 8.7% on the day on Tuesday.

Disappointing returns

But shares took a tumble on Wednesday, as the company reported bigger than expected losses.

For the three months to September 30, Intrepid reported an adjusted loss of $17.5m, compared to $4.0m in the same period a year ago.

The adjusted net loss was $0.23, sharper than the $0.12 loss forecast by analysts.

Sales for the period were down 10% year-on-year, at $43.64m.

This was ahead of the $35.83m forecast by analysts.

Hopes for profit margins

Revenues from potash sales were down 16% year on year, to $35.4m, which was ascribed to falling potash prices.

But the company hopes for improved product margins, thanks to a shift toward solar evaporation in its potash output, which reduces energy costs.

"Moing into 2017, we anticipate seeing some benefit to our potash gross margin as our lower-cost solar facility production becomes a greater proportion of our potash sales," said Mr Jornayvaz.

Intrepid shares were down 5.3% on the day in afternoon deals, at $1.07 a share.


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