(via Thenewswire.ca)
Vancouver, British Columbia - October 29th, 2013 - Pacific Potash Corporation (TSX-V: PP; OTCQX: PPOTF; FSE: P9P, "Pacific Potash", "the Company") is pleased to announce that it has entered into a non-binding Memorandum of Understanding (M.O.U) with a Chinese State Owned Enterprise ("S.O.E"). The M.O.U outlines the proposed terms of a transaction pursuant to which the S.O.E will subscribe for CDN $10,000,000 by way of an unsecured convertible debenture of common shares (the "Convertible Debenture") from Pacific Potash Corporation convertible at a price of $0.37 per common share. The S.O.E's aggregate beneficial ownership of common shares will not exceed 19.9% of the issued and outstanding common shares of Pacific Potash at the time of exercise of these conversion rights. The Convertible Debenture shall bear interest at the rate of 5.0% per annum, payable semi-annually and shall mature on the date which is two (2) years from the date of issuance.
Upon completion of this financing Pacific Potash will have raised a total of CDN $16.35 Million year to date to drive the Company's business plan. The proceeds from the Convertible Debenture will be used for development of Pacific Potash's Amazonas Basin Potash exploration program, consisting primarily of drilling, and for general working capital.
Mr. Balbir Johal, Executive Co-Chairman and Director stated "This strategic alliance and relationship with the S.O.E was facilitated by the hard work of our strategic advisor, CapitalAsia. Upon receiving the funding, we will now be able to complete an extensive fully permitted drill program, consisting of six exploration holes with each reaching a true depth of at least 1500 metres costing approximately CDN $12 million dollars. Drilling commences this coming week under the command of our CEO and Chief Geologist, Andre Costa, whose work over the last six years in the Amazonas Potash Basin has led to several new discoveries of economic potash. "
Terms of the Convertible Debenture
On successful completion of due diligence phase the parties will diligently and in good faith thereafter negotiate, a definitive subscription agreement for the Convertible Debenture.
This agreement is subject to the regulatory approval of the TSX Venture Exchange.
Cancellation of Merger with Cowley Mining PLC
In respect to Cowley's October 25, 2013 news release cancelling the proposed merger, the Company confirms that the proposed merger has been cancelled as the parties were unable to agree on the terms of the definitive agreement.
Mr. Balbir Johal, states, "Although we felt that the Cowley transaction was attractive, management believes that this new partnership with the S.O.E creates superior leverage for our shareholders due to size and the less dilutive nature of the funding. We are fully funded now for a potential discovery in a world-class basin."
About Pacific Potash Corporation
Pacific Potash Corporation trades on the TSX Venture Exchange under the symbol: PP, as well on the OTCQX under the symbol: PPOTF and on the Frankfurt Stock Exchange under P9P. Pacific Potash is engaged in the exploration and development of the Amazonas Potash Project and the surrounding potash claims targeting the Middle Amazonas Potash Basin, currently the host to multiple new exploration campaigns for potash.
We seek safe harbour.
On behalf of the Board,
Pacific Potash Corporation
Balbir Johal
Executive Co-Chairman & Director
For further information, please visit our website at www.pacificpotash.com or contact our V.P of Corporate Communications, Mike Blady:
Mike Blady
Office: +1 604.895.7446
Email: mblady@pacificpotash.com
Andre Costa, P.Geo, CEO & President of Pacific Potash Corp and qualified person for the purposes of NI 43-101, has reviewed and approved the preparation of the technical information in this news release.
Neither the 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.
Caution concerning forward-looking information
This press release contains "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws. This information and statements address future activities, events, plans, developments and projections. All statements, other than statements of historical fact, constitute forward-looking statements or forward-looking information. Such forward-looking information and statements are frequently identified by words such as "may," "will," "should," "anticipate," "plan," "expect," "believe," "estimate," "intend" and similar terminology, and reflect assumptions, estimates, opinions and analysis made by management of Pacific Potash in light of its experience, current conditions, expectations of future developments and other factors which it believes to be reasonable and relevant. Forward-looking information and statements involve known and unknown risks and uncertainties that may cause Pacific Potash's actual results, performance and achievements to differ materially from those expressed or implied by the forward-looking information and statements and accordingly, undue reliance should not be placed thereon.
Risks and uncertainties that may cause actual results to vary include but are not limited to the availability of financing; fluctuations in commodity prices; changes to and compliance with applicable laws and regulations, including environmental laws and obtaining requisite permits; political, economic and other risks; as well as other risks and uncertainties which are more fully described in our annual and quarterly Management's Discussion and Analysis and in other filings made by us with Canadian securities regulatory authorities and available at www.sedar.com. Pacific Potash disclaims any obligation to update or revise any forward-looking information or statements except as may be required.
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