By: Tomas Ronolski - AllPennyStocks.com News

Wednesday, January 25, 2017

The mining sector is finally emerging from some testing times in the last few years. Things are especially looking up in the phosphate mining sector, as demand for fertilizers is showing a revival. It is expected that the phosphate market will see nearly 2 percent annual growth in the near future. These developments bid well for companies such as Arianne Phosphate (TSX-Venture:DAN), which is a Canadian company engaged in developing mining properties with its current main project being the Lac a Paul project in Quebec. The company announced early this morning that it had inked a new deal with Rio Tinto for exploring the potential of sharing maritime services. Under the terms of the agreement, both companies will engage in further discussions about the prospective use of common carriers for transporting Arianne Phosphate’s products to international markets. It is expected that any such arrangement will offer the company more productive and cost efficient method of conducing its business. Arianne Phosphate will also benefit from the potential reduction in transportation costs.

The company CEO, Jean-Sébastien David also stressed that such pact would also be more environment friendly. He added that using Rio Tinto’s ships over the Saguenay River will make optimal use of the ships’ capacity. The company plans to use the ships for transporting its phosphate rock concentrate. Arianne Phosphate said that it will in minimizing the environmental impact of its Lac a Paul project.

With this collaboration, Arianne Phosphate will move towards optimizing its operations. The company recently had provided the updates for its previous year accomplishments. Lac à Paul project constitutes the main area of operations for the company. It already has obtained the permit for the project, however several other procedural milestones are still pending.

Since Arianne Phosphate is still in the process of determining key suppliers and the potential market for its products, the main emphasis lies on controlling costs for the project. The company also exercised its option to purchase the land for building a maritime terminal at the project.

Arianne Phosphate is also looking into various areas of financing. In 2016, it collaborated with UK-based project finance advisor Endeavour Financial to structure and review a financing plan and interface with potential financing partners. It is also looking for a potential alliance with the Quebec government. Overall, these efforts are likely to bring results in the current year.

As for shares of DAN, the company’s stock lost nearly 5 percent of its value in the past 12 months, which is relatively mild, given the overall difficult environment in the phosphate market over the last few years. However, shares have shown signs of stabilizing recently and as the company moves forward towards putting its plans into action, a share price turnaround is not out of the question.

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