Potash Ridge Acquires Valleyfield Fertilizer Corporation
TORONTO, ONTARIO--(Marketwired - Aug 11, 2015) - Potash Ridge Corp. ("Potash Ridge" or the "Corporation") (TSX:PRK) (OTCQX:POTRF) today announced a transaction to acquire all of the issued and outstanding common shares of Valleyfield Fertilizer Corporation ("Valleyfield"), a privately owned corporation registered in Quebec.
Over the last two years under the leadership of Mr. Jay Hussey, Valleyfield has advanced development of a sulphate of potash ("SOP") project in Quebec utilizing the Mannheim Process (the "Valleyfield Project"). For nine years, Mr. Hussey was a Vice-President at Migao Corporation ("Migao"), a TSX-listed company that produces SOP in China using the Mannheim Process.
Under the terms of the transaction, Mr. Hussey will receive 200,000 common shares of the Corporation, together with a royalty from future revenue generated by the Corporation utilizing the Mannheim Process. Mr. Hussey has agreed to become an employee of Potash Ridge and continue to work on the development of the Valleyfield Project, other potential Mannheim opportunities already identified and other activities.
Developed in Germany over a century ago, the Mannheim Process is one of the most commonly used SOP production processes in the world, primarily occurring in China and Europe. The process combines muriate of potash (potassium chloride) with sulphuric acid at high temperatures to produce SOP and by-product hydrochloric acid. In the year ended March 31, 2015, Migao's annual SOP production capacity in China was approximately 360,000 tonnes from four facilities in China and, according to CRU, Tessanderlo Chemia, Yara and other European producers have a combined annual SOP production capacity using the Mannheim Process of 930,000 tonnes per year.
Mr. Hussey's knowledge and experience of the Mannheim Process from his time at Migao enabled him to advance development of the Valleyfield Project. A preliminary internally developed financial study utilizing this information projected an after-tax/royalty Net Present Value of $40.9 million, assuming a 10% discount rate, with an unlevered Internal Rate of Return of 32%, based on a preliminary capital cost estimate of $25 million, operating costs of $495 per tonne, net of acid credit, and a realized SOP price of $750 per tonne (US$ 575 per tonne). The project economics noted above are preliminary internally developed estimates, and will need to be confirmed with the next stage of engineering. It is anticipated that construction of the facility could commence within six months of raising the capital necessary to complete engineering and permitting, with construction expected to take one year.
A fully-serviced property has been chosen to develop the Valleyfield Project. The property is close to sources of the input sulphuric acid as well as being nearby to markets for the by-product hydrochloric acid. A memorandum of understanding has been signed for the offtake of the hydrochloric acid.
Potash Ridge's President and Chief Executive Officer, Guy Bentinck, stated,
"Acquiring Valleyfield brings a new dimension to the Corporation's strategy of becoming a premier producer of SOP. While we remain committed to the development of Blawn Mountain in Utah, the Valleyfield Project will allow Potash Ridge to become a producer of SOP in an accelerated timeline and at a very manageable capital cost. The Valleyfield Project is also strategically located to supply SOP to currently underserved markets in North America.
The Corporation is continuing its capital raising efforts, with initial proceeds to be primarily focused on completing engineering and permitting on the Valleyfield Project. Management is hopeful that the Valleyfield Project's widely used Mannheim technology, low capital cost, attractive preliminary economics and fast timeline to production will be attractive to investors."
Closing is subject to all requisite regulatory and others steps, and is expected to occur on or before August 31st, 2015.
About Potash Ridge
Potash Ridge is a Canadian based development company with a strategy of becoming a premier producer of SOP.
The Corporation owns two SOP projects: the Valleyfield Project in Quebec that plans to produce SOP through the Mannheim Process; and the Blawn Mountain Project in Utah that plans to produce SOP by processing an alunite material.
Potash Ridge has a highly qualified and proven management team in place with significant financial, project management and operational experience and the ability to take projects into production.
Forward-Looking Statements
This press release contains forward-looking statements, which reflect the Corporation's expectations regarding future growth, results of operations, performance and business prospects. These forward-looking statements may include statements that are predictive in nature, or that depend upon or refer to future events or conditions, and can generally be identified by words such as "may", "will", "expects", "anticipates", "intends", "plans", "believes", "estimates", "guidance" or similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These statements are not historical facts but instead represent the Corporation's expectations, estimates and projections regarding future events. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Corporation, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: the future financial or operating performance of the Corporation and its subsidiaries and its mineral projects; the anticipated results of exploration activities; the estimation of mineral resources; the realization of mineral resource estimates; capital, development, operating and exploration expenditures; costs and timing of the development of the Corporation's mineral projects; timing of future exploration; requirements for additional capital; climate conditions; government regulation of mining operations; anticipated results of economic and technical studies; environmental matters; receipt of the necessary permits, approvals and licenses in connection with exploration and development activities; appropriation of the necessary water rights and water sources; changes in commodity prices; recruiting and retaining key employees; construction delays; litigation; competition in the mining industry; reclamation expenses; reliability of historical exploration work; reliance on historical information acquired by the Corporation; optimization of technology to be employed by the Corporation; title disputes or claims and other similar matters.
If any of the assumptions or estimates made by management prove to be incorrect, actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained herein. Such assumptions include, but are not limited to, the following: that general business, economic, competitive, political and social uncertainties remain favorable; that agriculture fertilizers are expected to be a major driver in increasing yields to address demand for premium produce, such as fruits and vegetables, as well as diversified protein rich diets necessitating grains and other animal feed; that actual results of exploration activities justify further studies and development of the Corporation's mineral projects; that the future prices of minerals remain at levels that justify the exploration and future development and operation of the Corporation's mineral projects; that there is no failure of plant, equipment or processes to operate as anticipated; that accidents, labour disputes and other risks of the mining industry do not occur; that there are no unanticipated delays in obtaining governmental approvals or financing or in the completion of future studies, development or construction activities; that the actual costs of exploration and studies remain within budgeted amounts; that regulatory and legal requirements required for exploration or development activities do not change in any adverse manner; that input cost assumptions do not change in any adverse manner, as well as those factors discussed in the section entitled "Risk Factors" in the Corporation's Annual Information Form (AIF) for the year-ended December 31, 2014 found on sedar.com. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.
Contact
Potash Ridge Corp.
Ross Phillips
Chief Financial Officer
416.312.6566
info@potashridge.com
Valleyfield Fertilizer Corporation
Jay Hussey
President
416.918.6589
