Potash core (LSE: KP2) is one of the hottest stocks on the stock exchange right now. When I last discussed this issue at the end of June, it was trading at 1.2p. Today, however, it is at 3p – 150% higher!

Should investors consider buying this stock given its incredible momentum? Let’s talk.

It plays on the world’s growing population

First, let me give you a brief summary of what this company does.

Kore Potash is, as its name suggests, a UK-based potash company developing assets in the Republic of Congo. Potash is a key plant nutrient and will be crucial in feeding the world’s population in the coming decades. This company’s goal is to be one of the cheapest suppliers in the world.

Currently, the group is working on two key projects called “DX” and “Kola”. He is also in talks with the Chinese construction powerhouse PowerChina on the Engineering, Procurement and Construction (EPC) application for the latter.

Risky stocks

From my point of view, these shares are very speculative. Currently, the company – which has a market capitalization of just £155 million – does not generate any revenues or profits, so there is a risk that it will have to raise capital from shareholders in the future, which could result in a decline in the share price.

Such companies often face operational failures while developing their projects. These failures can be very frustrating for investors because they can lead to weakening share prices.

Potential for large profits

That said, risk and reward are directly related to investing. In this case, there is the potential for significant rewards in the future.

That PowerChina could be a key partner in the Kola project is a large deal. Chinese state-owned enterprise PowerChina is an engineering and construction specialist with extensive experience in large-scale projects. Having this type of company as a partner could both reduce risk and speed up the project. So this is very invigorating for investors.

It is worth noting that there is no guarantee that the two companies will end their cooperation. But the situation looks promising. In a recent update (September 17), Kore Potash reported that she met with senior PowerChina officials in Dubai in July. According to the company, both parties have satisfactorily resolved all outstanding commercial matters and the agreements are currently finalized with the respective legal counsels of both parties.

Another reason for optimism is that the potash market appears to have enormous potential. The world’s population is likely to enhance significantly in the coming decades. So we will have to produce much more food to meet demand. Potash is likely to play a key role here as it can enhance yields from arable land. That said, I’ve seen investors get burned by potash stocks before. One of the companies operating in this space was Sirius Minerals, which crashed and burned badly.

Is it worth buying?

Given the risks involved, I do not plan to buy Kore Potash shares myself. For me the risk level is too high.

However, for those with Very with a high risk tolerance (who are willing to lose 100% of their investment if something goes wrong), the stock is worth taking a closer look at. There is no doubt that there is great potential here.