Canadian-based potash maker Potash Corp. of Saskatchewan Inc. said Wednesday its board of directors approved a 3-for-1 stock split of the company's outstanding shares.

Forward splits are often undertaken by companies with high-priced stock, in a move to improve liquidity and make shares more attractive and accessible to new investors.

Each shareholder will receive two additional shares for each share owned at May 22.

The board also doubled the company's quarterly cash dividend to 30 cents per share on a pre-split basis. Shareholders will also receive a dividend of 10 cents per share on a post-split basis payable Aug. 10 to shareholders of record July 20.

After the stock split, the company will have about 315.4 million shares outstanding. The shares will begin trading on split basis on May 17 on the Toronto Stock Exchange and May 30 on the New York Stock Exchange.

Cory project expansion

Potash Corporation on Wednesday also announced that it will begin a major debottlenecking and expansion project that will increase potash production at its Cory, SK operation by 1.2 million tonnes from 2006 levels.

The project will cost approximately US $775 million, which includes US $70 million for 750,000 tonnes of new compaction capacity.

In 2006, Cory produced approximately 800,000 tonnes of its 1.37 million tonne nameplate capacity, and currently makes only white potash products primarily for industrial customers.

The project will involve debottlenecking of underground operations as well as a significant expansion into the production of red potash products.

A new plant will be constructed for the crushing, flotation, centrifuging and drying of 2.0 million tonnes per year of red products, with up to 800,000 tonnes of this to be crystallized for white product production.

Additionally, storage, load-out and rail yard capabilities will be expanded to support the new red product line. Work is scheduled to begin immediately and will take 36 months to complete.

This will increase capacity at Cory to 2.0 million tonnes and, combined with other announced projects in Saskatchewan, should raise Potash's total production capability to 13.5 million tonnes by the second quarter of 2010. Beyond this, the company is considering additional projects at its facilities in New Brunswick and Saskatchewan that could raise its potential capacity to 15.7 million tonnes by 2015.

With a 12-16 % increase in potash consumption expected in 2007 and further 3-4 % annual increases anticipated through the end of the decade, global potash producers – with the exception of PotashCorp – are at or near their production limits.

A new conventional greenfield mine requires a good deposit, 5-7 years' lead time to build and, according to recent external engineering estimates, an investment of $2 billion for 2 million tonnes of production. This Cory project will bring expanded production tonnage online more quickly and at a 40-percent discount to the estimated cost of a greenfield development.

"We believe that the world will need more potash, and we are in the best position to meet that demand," said PotashCorp President and CEO Bill Doyle. "For almost 20 years, we have patiently managed our potash resources, recognizing that significant and sustainable growth in global consumption would eventually arrive. Our project at Cory demonstrates the continuing execution of our Potash First strategy, as we will be bringing back capacity and expanding our product mix to meet the growing requirements for potash in offshore markets."

Potash shares rose $3.60, or 2 percent, to $185.48 in electronic after-hours trading. During regular trading hours, the shares rose $3.35 to close at $181.88. – Associated Press