The dominance of Canada’s high-powered cartel of three major potash producers may come to an end if a couple of small but well-financed potash exploration upstarts continue their winning ways.

Both Western Potash Corp. (TSX.V: WPX) and Potash One Inc. (TSX: KCL) have made impressive headway recently in their quest to muscle-in on Canada’s highly lucrative potash mining business.

Earlier this week, Vancouver-based Western Potash received a major shot in the arm by way of impressive drilling results from its Milestone Property in southern Saskatchewan. Notably, the project is located in close proximity to one of the largest solution-extraction (low-cost) potash mines in the world – Mosaic’s multi-billion-dollar Belle Plaine Mine – which has been mined for over 40 years and is still going strong.

Western Potash’s flagship property also borders the Regina Potash Property, which is being aggressively developed by Brazil-based Vale Inco, the second largest mining company in the world. Vale Inco hasn’t publicized its drill results but they are rumoured to be very impressive.

This is particularly encouraging for Western Potash, which believes it now has evidence of comparable results on its own adjoining property. All of which suggests that an expansive, potentially word-class solution-extraction deposit may be in the making – one that straddles both properties.

Western Potash’s president, Patricio Varas, points out that his company’s first drill hole (known as a ‘well’ due to its extremely wide bore) at the Milestone Property intersected 24.5 metres of potash mineralization.

“Visual interpretation of gamma ray logs from this zone suggests a moderate to strong potash grade within this zone,” he added in a May 26 news release.

Furthermore, the high temperatures encountered (a minimum of 62 degrees Celsius) in this initial deep hole offer further encouragement by way of reducing the energy requirements for any future solution mine. In other words, ideal geological conditions exist for what could prove to be one of the world’s most energy-efficient and therefore cost-efficient potash mines, according to company spokesperson John Costigan.

Western Potash plans to drill at least two more deep holes (or wells) to better understand the overall size, grade, thickness and type of potash mineralization hosted by the Milestone Property. In turn, this would form the basis for a resource calculation later this year, assuming that future drilling continues to yield promising results. On this note, the company’s seismic survey results are reported to demonstrate the existence of mineralization beneath each of these upcoming drill hole locations.

Meanwhile, the company’s initial drilling results are “positive,” according to Robert Winslow, a Toronto-based mining analyst with the investment firm Wellington West Capital Markets Inc. Even though a single encouraging drill hole result does not make a mine, it certainly helps to establish Western Potash’s credentials as a bright prospect, he told BNW Business News Wire.

And if the Chinese are interested in shopping around for emerging potash resources in Saskatchewan, then the continuation of such upbeat drill results would certainly give Western Potash “a seat at the table,” Winslow added.

About 100 kilometres to the north of the Milestone Property, Potash One is aggressively moving forward with its mandate to build Canada’s first new potash mine in over 40 years at its Legacy Project. The company’s lofty ambitions recently received a major boost with the arrival of its new chairman, Robert Friedland, earlier this month.

The mining magnate is best-known as the man behind the epic Voisey's Bay nickel discovery in the remote Labrador region of eastern Canada. His company later sold the deposit to the mining multinational Inco Ltd. (now Vale Inco) for the princely sum of Cdn. $4.3 billion.

Vancouver-based Potash One is looking to raise enough money to conduct a feasibility study (a blueprint for a mine) and then commercialize the solution-extraction-amenable Legacy deposit. Most experts agree that a mine would cost upwards of Cdn. $1 billion. And that’s a tall order for such a small company.

However, Friedland is one of world’s most adept mining financiers, with close ties to deep-pocketed business interests in Southeast Asia. He is acutely aware that China would love to own its own Canadian potash supplies, rather than being beholden to a seemingly omnipotent Canadian potash cartel. One that dictates the high prices that China has to pay for an increasingly indispensible nutrient for its burgeoning agriculture industry.

Chinese potash inventories are reported to be very low but the Chinese government has yet to sign a new annual supply contract with Canpotex Ltd. – the joint international marketing unit of Saskatchewan’s three big producers. Negotiations have become protracted as Chinese importers continue to balk at paying dizzying record high prices. A recent spot price of around $750 per metric ton represents a nearly four-fold increase over 2007’s average prices.

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