TUCSON, Ariz., Jan. 18, 2013 (GLOBE NEWSWIRE) -- 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 |
to or for FPC
| INCREMENTAL % |
INTEREST EARNED IN
|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|
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.
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: email@example.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: firstname.lastname@example.orgSource:First Potash Corporation