TORONTO,
March 30, 2012 /PRNewswire/ - IC
Potash Corp. ("ICP" or the "Company") (TSX: ICP) (OTCQX: ICPTF) is
pleased to announce that Yara International ASA ("Yara"), through a
wholly owned subsidiary, has agreed to make a strategic investment
of approximately C$40 million in ICP
at a price of $1.32 per common share
and has entered into a committed off-take agreement for the
purchase of 30% of all products produced by ICP's Ochoa project in
New Mexico for a period of 15
years. ICP and Yara have also agreed to discuss the possibility of
establishing a jointly held entity for the purpose of marketing
products produced by the Ochoa project.
Mr. Sidney
Himmel, President and CEO of ICP, comments, "Yara and
ICP share a strategic focus on premium products and adding value in
the fertilizer supply chain. As one of the world's largest
distributors of plant nutrients, Yara is the ideal partner for
ICP's project development and product marketing strategies. This
partnership is transformational for ICP and provides the Company
with a significant injection of capital and a buyer for 30% of the
annual production by the Ochoa project. We look forward to working
with Yara in further developing the distribution channels for our
premium potash products."
Mr. Jørgen Ole
Haslestad, President and CEO of Yara, comments: "This
investment fits well with our strategy. Through the ownership in
ICP, Yara gets an upstream exposure on potash which reduces and
mitigates the financial impact of being structurally short on the
nutrient. Furthermore, the partnership with ICP aligns our
respective strategies to develop and distribute premium fertilizer
products, where Yara already has a leading position globally with
its nitrates and nitrate-based NPK portfolio."
Strategic Investment Terms
In connection with the strategic investment, ICP
will issue to Yara 30,129,870 common shares at a price of
$1.32 per common share for total
gross proceeds of C$39,771,428. After
giving effect to the transaction, this will result in Yara owning
19.9% of the issued and outstanding common shares of ICP on a
non-diluted basis. The issue price represents a 41% premium over
the 20 day volume weighted average price of ICP's common shares
traded on the Toronto Stock Exchange as of the closing on
March 30, 2012. The investment has
been conducted as a non-brokered private placement.
Upon closing, Yara will receive the right to
appoint one representative to ICP's board of directors and the
right to participate pro rata in all future equity or equity linked
issuances by ICP. Subject to certain exceptions, Yara will be
restricted from transferring securities of ICP until the earlier of
24 months following the closing date and the date on which ICP has
secured all financing to complete the construction of the Ochoa
project and such construction has commenced.
Off-Take Agreement Terms
Under the committed off-take agreement, which
will become effective upon closing of the strategic investment, ICP
will sell to Yara and Yara will buy from ICP 30% of all products
produced by the Ochoa project annually. The term will begin upon
the commencement of commercial production for a period of 15 years
and will automatically extend every five years thereafter unless
either party elects not to extend. All products will be sold
to Yara based on market prices.
Closing Information
Closing of the private placement (and the coming
into effect of the off-take agreement) is subject to customary
closing conditions including the approval of the Toronto Stock
Exchange. It is anticipated that the closing will take place
on or about April 12, 2012.
Corporate Update
ICP continues to move the Ochoa project forward
on schedule with the objective of commercial production in fourth
quarter of 2015. Upon completion of the strategic investment, the
Company will have approximately $60
million in cash which it intends to use to complete a
definitive bankable feasibility study, all required permitting,
deposits for equipment purchases, and pre-construction engineering.
ICP intends to launch a definitive bankable feasibility study on
the Ochoa project in the coming weeks.
About IC Potash Corp.
ICP intends to become a primary producer of
Sulphate of Potash ("SOP") and Sulphate of Potash Magnesia ("SOPM")
by mining its 100%-owned Polyhalite Ochoa property in New Mexico, a highly advanced mineral deposit
containing proven and probable reserves of more than 400 million
tons of ore within the proposed mine plan. SOP is a non-chloride
based potash fertilizer that sells at a substantial premium over
the price of regular potash known as Muriate of Potash ("MOP"). MOP
contains chloride and is therefore not the optimal potash for
numerous crops and in situations where there is high soil salinity.
ICP is focused on becoming the lowest cost producer of SOP in the
world. The SOP market is towards six million tonnes per year. SOP
is a significant fertilizer in the fruit, vegetable, tobacco,
potato, and horticultural industries. SOP is also applicable in
soils where there is substantial agricultural activity with
varieties of crops and therefore where the salinity of the soil has
increased, and in areas where soils are dry. SOPM is a highly
desirable potash product for soils with magnesium deficiency,
including those found in Europe
and Southeast Asia and has a total
global market size of over one million tonnes. ICP's Ochoa property
consists of over 100,000 acres of federal subsurface potassium
prospecting permits and State of New
Mexico Potassium mining leases.
About Yara International ASA
Yara is the world's leading chemical company
that converts energy, natural minerals and nitrogen from the air
into essential products for farmers and industrial customers. As
the number one global supplier of mineral fertilizers, Yara helps
provide food for a growing world population. Its industrial product
portfolio includes environmental protection agents that prevent air
pollution. Yara's global workforce of 7,300 employees represents
the great diversity and knowledge that enables Yara to remain a
leading performer in the industry.
Certain information set forth in this news
release may contain forward-looking statements that involve
substantial known and unknown risks and uncertainties. These
forward-looking statements are subject to numerous risks and
uncertainties, certain of which are beyond the control of ICP,
including, but not limited to, risks associated with mineral
exploration and mining activities, the impact of general economic
conditions, industry conditions, dependence upon regulatory
approvals, and the uncertainty of obtaining additional financing.
Readers are cautioned that the assumptions used in the preparation
of such information, although considered reasonable at the time of
preparation, may prove to be imprecise and, as such, undue reliance
should not be placed on forward-looking statements.
SOURCE IC Potash Corp.
