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WESTERN POTASH CORP T.WPX

"Western Potash Corp is engaged in the acquisition, evaluation, and exploration of mineral properties containing potash in Western Canada. The Company holds interests in the Milestone Project located in Southern Saskatchewan."


TSX:WPX - Post by User

Post by trade2win2on Jun 20, 2013 3:24pm
375 Views
Post# 21549781

Done deal

Done deal

Western Potash Corp. Announces Closing of Strategic Investment

bwire

VANCOUVER, British Columbia (Business Wire) -- Western Potash Corp. ("Western" or the "Company") is pleased to confirm

      that the previously announced strategic investment by China BlueChemical

      Ltd., ("China Blue") and Benewood Holdings Corporation ("Benewood"),

      through a joint venture company, CBC (Canada) Holding Corp. ("CBCHC"),

      has been completed (the "Transaction"). Western has issued to CBCHC

      approximately 45 million common shares at a price of $0.71 for proceeds

      of C$ 31,979,022, which represents a 19.9% ownership stake in the

      Company on a non-diluted basis. China Blue is a majority owned

      subsidiary of China National Offshore Oil Corporation ("CNOOC") and

      Benewood is a wholly owned subsidiary of GUOXIN International Investment

      Corporation Limited ("GUOXIN"), a financial investment company

      registered in Hong Kong.

         Pursuant to the subscription agreement for the Transaction dated June 1,

      2013, as amended June 20, 2013 (together, the "Subscription Agreement"),

      CBCHC received a right to appoint one Board of Directors nominee and

      consequently, Mr. Yang Yexin is welcomed to Western's Board of Directors

      (the "Board"). Mr. Yang has been an Executive Director & Chief Executive

      Officer & President of China Blue since 2006. He joined the CNOOC group

      in 1978 and served as a mechanical engineer and as the deputy head of

      the mechanics division of China Offshore Oil Southern Drilling Company,

      the deputy general manager of CNOOC Nanhai West CPEC (Shekou) Company;

      the general manager of CNOOC Shipping Company and other various

      positions in the CNOOC Group. Mr. Yang graduated from Wuhan

      Communication Technology University in 1978 with a major in Vessel

      Engineering and obtained a Master's degree in Business Management from

      China University of Petroleum (Beijing) in 2004.

   

      As previously announced, Western and CBCHC have signed an off-take term

      sheet whereby CBCHC or a purchaser designated by it will enter into an

      off-take agreement for the purchase of the lesser of 30% or 1 million

      tonnes of potash annually from Western's Milestone potash project for a

      term of 20 years. Pricing of product sold under the agreement will be

      based on market terms.

         Upon completion today of CBCHC's strategic investment and pursuant to

      the Subscription Agreement, the parties will form and jointly staff

      three working committees within 30 days. A Technical Committee and a

      Finance Committee will be formed, both of which will be made up of three

      members from Western and three members from CBCHC. In addition, the

      Chief Executive Officer and an individual holding a senior management

      position in each of the Parties will form a Supervisory Committee.

         The mandate of the Technical Committee will involve providing

      recommendations for technical, construction and procurement inputs for

      the Milestone potash project. The Finance Committee is to be responsible

      for developing, evaluating and recommending potential project financing

      strategies, communicating with potential project finance providers and

      evaluating the terms of proposals received from such providers. The

      Supervisory Committee will oversee both of these committees.

   

      In addition, Mr. Zhimao Ma, Senior Engineer and General Manager of Legal

      and Assets Management Department of China Blue has been appointed a

      non-voting observer status to the Board. Mr. Ma brings deep potash and

      fertilizer commercial experience from the sector as well as a sound M&A

      and analytical background in the potash space.

         Pursuant to the Subscription Agreement, two senior staff members will be

      seconded to Western by CBCHC; the Western team will welcome one

      technical engineering staff member and one finance specialist staff

      member.

         Mr. Patricio Varas, President and CEO of Western commented: "After two

      years of working together with China Blue we have reached what we

      believe is a comprehensive strategic investment as it strengthens our

      financial position and provides a vision for the path forward. The

      Transaction has involved a significant amount of due diligence and long

      hours of work from both our teams. We are very happy to welcome Mr. Yang

      to the Board and we will definitely benefit from his extensive plant

      building and operating experience both at China Blue and CNOOC. In

      addition, Mr. Varas stated, "With the Subscription Agreement, I believe

      CBCHC and Western have created a formidable alliance and we can now look

      to completing the work already underway in arranging and putting

      together the financial pieces that will make the building of the

      Milestone Project a reality."

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