First Potash Corp. Announces Earn-In and Joint Venture, and Grant of Options Under New Corporate Stock Option Plan
January 18 2013 - 7:30AM
First Potash Corp. (TSX-V:FSP) (OTCBB:SALTF)
("First Potash" or the "Company") is pleased to
announce that it has entered into a Letter of Intent for a US$2.5
million Earn-In and Joint Venture agreement (the "Agreement") with
Minex Ventures VII, a Colorado limited liability company ("Minex")
to develop one of the Company's 10 brine salar properties, at the
Salar de Pedernales in Chile's Atacama Region III (the "Property").
To earn an undivided 45% interest in the Company's wholly-owned
Salar de Pedernales potassium and lithium brines project, Minex
must provide funding for Property expenditures totaling at least
$2.5 million within two years of the date of the approval of the
Agreement by the TSX Venture Exchange (the "TSXV") (the "Effective
Date"). Minimum expenditures of US$900,000 are anticipated to be
funded by Minex during the first calendar year after the Effective
Date.
The Agreement contemplates that Minex will fund and earn project
interests as per the following table:
|
|
|
MILESTONE |
EARN-IN EXPENDITURES paid to
or for FPC |
INCREMENTAL % INTEREST EARNED
IN PROJECT |
February 12, 2013 |
US$100,000 |
5 |
March 15, 2013 |
US$100,000 |
5 |
Delivery of inferred resource
estimate |
US$700,000 |
10 |
Delivery of pre-feasibility study
("PFS") or preliminary economic assessment ("PEA") |
US$1,600,000 |
25 |
TOTALS |
US$2.5 million |
45 |
At completion of the Earn-In, First Potash will deliver 2
million fully-paid common shares of the Company to Minex, which
shares will be subject to a hold period in accordance with
applicable securities laws. If Minex withdraws prior to full
completion of Earn-In, First Potash shall deliver common shares to
Minex pro-rata corresponding to the project interests Minex has
earned. The parties have also agreed to reserve and convey to First
Potash a 2% NSR production royalty capped at US$6 million, one-half
of which can be repurchased by Minex for US$2 million prior to
commercial production. At Earn-In, the parties intend to
enter into a more formal Joint Venture Agreement governing
operations at Pedernales.
The Company anticipates that the joint venture's focus will be
on developing the Salar de Pedernales property through exploration,
geochemical and geophysical analyses, pre-feasibility studies,
permitting, and drilling, among other related activities. It is
anticipated that activities under the Earn-In will allow FPC to
deliver a completed Technical Report under National Instrument
43-101 and a preliminary economic analysis ("PEA") with respect to
the Property within two years of the Effective Date. The
Agreement is subject to TSXV approval.
The Salar de Pedernales is the second largest salar in Chile and
is located approximately 4 hours from the city of
Copiapo. First Potash owns mineral concessions at Pedernales
of 5,100 hectares and through its subsidiary and operating agent
has submitted applications for water exploration rights covering
approximately 15,000 hectares at the Property, making it the
largest project in its portfolio of 10 brine salar projects.
"We are pleased that in such a difficult funding environment for
junior-mining resource companies, an experienced, fundamental
investor was able to analyze one of our projects and understand its
full potential and partner with us in such a constructive way,"
said Andrew Brodkey, CEO of First Potash Corp. "We are excited
that we will be able to deploy capital to move one of our core
projects forward towards the eventual goal of producing potash (for
fertilizer) at Salar de Pedernales. Minex entities have been
indirect investors in the Company before, and we are grateful that
they are showing their support for the Company's change of focus to
commercialize potash (for fertilizer) from our Chilean
properties."
The Company also announces that its shareholders approved a new
20% fixed stock option plan at its Annual General Meeting held on
November 30, 2012, which replaced the Company's previous 10%
rolling plan. On December 13, 2012, the Company granted a
total of 5,550,654 options to management and directors in two
tranches, the first half at a strike price of $0.10, and the second
half at a strike price of $0.15. Exercise of such stock
options are conditional upon prior approval of the TSXV.
About First Potash:
FPC is a publicly traded company that is engaged in the business
of acquiring, exploring, and developing properties throughout the
Western Hemisphere that contain Potash. FPC has a world-class
portfolio of ten Brine Salar properties in the Atacama Region of
Chile that cover a cumulative area in excess of 22,000 hectares of
mineral concessions and have the potential to produce Potassium,
Lithium, and other important minerals from surface lakes and
subsurface brines. The Company's corporate website is
www.firstpotashcorp.com.
About Minex:
Minex Ventures VII, LLC ("Minex"), is a privately-held US based
limited liability company organized in Colorado. It is an Affiliate
of other Minex companies which have significant investments and
experience in the minerals industry, in both private and public
companies. In 2011 a Minex Ventures affiliate provided US$1.6
million, and a further commitment of up to a total of $3 million to
Zoro Mining Corp. to advance the Yura Gold project near Arequipa in
Southern Peru.
On Behalf of the Board
FIRST POTASH CORP.
/s/ Andrew Brodkey
Andrew A. Brodkey, President and CEO Tel: (520) 623-3090 |
Email: abrodkey@kriyah.com
Forward Looking Statements
This press release contains projections and forward-looking
information that involve various risks and uncertainties regarding
future events. Such forward-looking information includes statements
based on current expectations involving a number of risks and
uncertainties and such forward-looking statements are not
guarantees of future performance of the Company, and include,
without limitation, statements that: (i) a minimum of US$900,000 of
expenditures is anticipated to be funded by Minex during the first
calendar year; (ii) the intention to focus on development of the
Property as set out herein; (iii) the anticipation that the Company
will deliver a Technical Report and PEA on the Property within 2
years of the Effective Date; and (iv) the Agreement is subject to
TSXV approval. There are numerous risks and uncertainties that
could cause actual results and the Company's plans and objectives
to differ materially from those expressed in the forward-looking
information in this news release, including without limitation, the
following risks and uncertainties: (i) the TSXV may be unwilling to
approve the Agreement; (ii) Minex may elect not to proceed with
earning an interest in the Property under the Agreement; (iii)
adverse market conditions; (iv) a decrease in demand for and price
of potash; (v) the inability to obtain, or a change in local
governmental or regulatory approval or policies that may adversely
affect the exploration work; and (vi) general uncertainties with
respect to mineral exploration in general. Actual results and
future events could differ materially from those anticipated in
such information. These and all subsequent written and oral
forward-looking information are based on estimates and opinions of
management on the dates they are made and are expressly qualified
in their entirety by this notice. Except as required by law, the
Company does not intend to update these forward-looking
statements.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
CONTACT: Aryn Gruneisen, Corporate Secretary
Tel: (520) 989-0032 | Email: agruneisen@kriyah.com