Itafos Inc. (TSX-V: IFOS) (“Itafos” or the “Company”) is pleased to
announce that it has entered into an agreement (the “Agreement”) to
sell its 100% interest in its Araxá project to a wholly-owned
subsidiary of St George Mining Limited (“St George”) (ASX: SGQ).
The sale is structured as a cash and equity transaction. The total
purchase price is cash of USD$21,000,000 and securities of St
George (the “Transaction”). As a result of the Transaction, St
George will indirectly acquire all of the outstanding securities of
Itafos Araxá Mineracao E Fertilizantes S.A (“Itafos Araxá”).
David Delaney, Chief Executive Officer of
Itafos, commented: “Today’s announcement of the divestiture of the
Araxá asset continues to demonstrate our focus on delivering long
term shareholder value through the focus on our core business. The
sale of the Araxá Project has been structured as a cash and equity
transaction. The structure allows Itafos to retain exposure in
further upside in the Araxá asset as it is further derisked. This
Transaction underlines our commitment to pursue strategic
initiatives that enhance shareholder value as outlined on May 8th,
2024.”
Under the terms of the Agreement, St George will
make a cash payment to Itafos of USD$10,000,000 at closing of the
Transaction and will make deferred cash payments of USD$6,000,000
nine months after closing, and USD$5,000,000 18 months after
closing (collectively, the “Deferred Payments”). Upon closing of
the Transaction, St George will also issue to Itafos (a) ordinary
shares of St George (“SGQ Shares”) representing 10% of St George’s
outstanding share capital immediately following closing, (b)
9,999,990 options to acquire SGQ Shares at an exercise price of
AUD$0.05, expiring three years from the date of issue and (c)
11,111,100 performance rights, convertible into SGQ Shares for no
additional consideration upon satisfaction of (i) the closing of
the Transaction and (ii) St George reporting an Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves (JORC) compliant inferred resource of no less than 25Mt @
3.5% total rate earth oxide (“TREO”) at a cut-off of 2% TREO within
five years from the date of issue.
The closing of the Transaction is subject to the
completion (or waiver) of certain conditions by November 3, 2024,
including: St George undertaking a capital raise of at least
AUD$20,000,000; St George receiving approval of its shareholders
for the Transaction; and the parties executing and registering
certain security documents to grant security to Itafos over the
assets of St George and Itafos Araxá until such time as the
Deferred Payments have been received by Itafos. Additionally, in
the event that St George fails to make a Deferred Payment within
five business days of its due date, Itafos will be granted a call
option whereby it may acquire the shares of Itafos Araxá for
consideration of USD$1.00.
The Transaction is expected to close in late Q3
or early Q4 2024. Use of proceeds will be considered by Management
and the Board upon completion of the Transaction.
The Araxá project is a planned vertically
integrated rare earth elements and niobium mine and extraction
plant project located in Minas Gerais, Brazil. Araxá is 100% owned
by Itafos and is currently being maintained as a development
project option. Araxá is expected to initially have production
capacity of 8.7kt per year of rare earth oxides and 0.7kt per year
of niobium oxide to serve international markets. The Araxá project
concession area covers approximately 226 hectares close to existing
infrastructure.
About Itafos
The Company is a phosphate and specialty fertilizer company. The
Company’s businesses and projects are as follows:
- Conda – a vertically integrated phosphate fertilizer business
located in Idaho, US with production capacity as follows:
- approximately 550kt per year of monoammonium phosphate (“MAP”),
MAP with micronutrients (“MAP+”), superphosphoric acid (“SPA”),
merchant grade phosphoric acid (“MGA”) and ammonium polyphosphate
(“APP”); and
- approximately 27kt per year of hydrofluorosilicic acid
(“HFSA”);
- Arraias – a vertically integrated phosphate fertilizer business
located in Tocantins, Brazil with production capacity as follows:
- approximately 500kt per year of single superphosphate (“SSP”)
and SSP with micronutrients (“SSP+”); and
- approximately 40kt per year of excess sulfuric acid (220kt per
year gross sulfuric acid production capacity);
- Farim – a high-grade phosphate mine project located in Farim,
Guinea-Bissau;
- Santana – a vertically integrated high-grade phosphate mine and
fertilizer plant project located in Pará, Brazil; and
- Araxá – a vertically integrated rare earth elements and niobium
mine and extraction plan project located in Minas Gerais,
Brazil.
The Company is a Delaware corporation that is headquartered in
Houston, TX. The Company’s shares trade on the TSX-V under the
ticker symbol “IFOS”. The Company’s principal shareholder is CL
Fertilizers Holding LLC (“CLF”). CLF is an affiliate of Castlelake,
L.P., a global private investment firm.
For more information, or to join the Company’s mailing list to
receive notification of future news releases, please visit the
Company’s website at www.itafos.com.
Forward-Looking Information
Certain information contained in this news
release constitutes forward-looking information
(“FLI”), including statements with respect to the
Transaction and any information related to: the estimated closing
date of the Transaction; the ability of the parties to satisfy the
closing conditions and receive any applicable regulatory approvals
to complete the Transaction, and the Company’s ownership in St
George. All information other than information of historical fact
may constitute forward-looking information. The use of any of the
words “intend”, “anticipate”, “plan”, “continue”, “estimate”,
“expect”, “may”, “will”, “project”, “should”, “would”, “believe”,
“predict” and “potential” and similar expressions are intended to
identify forward-looking information.
The FLI contained in this news release is based
on the opinions, assumptions and estimates of management set out
herein, which management believes are reasonable as at the date the
statements are made. Those opinions, assumptions and estimates are
inherently subject to a variety of risks and uncertainties and
other known and unknown factors that could cause actual events or
results to differ materially from those projected in the FLI. These
include the Company’s expectations and assumptions with respect to
the following: commodity prices; operating results; safety risks;
changes to the Company’s mineral reserves and resources; risk that
timing of expected permitting will not be met; changes to mine
development and completion; foreign operations risks; changes to
regulation; environmental risks; the impact of adverse weather and
climate change; general economic changes, including inflation and
foreign exchange rates; the actions of the Company’s competitors
and counterparties; financing, liquidity, credit and capital risks;
the loss of key personnel; impairment risks; cybersecurity risks;
risks relating to transportation and infrastructure; changes to
equipment and suppliers; adverse litigation; changes to permitting
and licensing; geo-political risks; loss of land title and access
rights; changes to insurance and uninsured risks; the potential for
malicious acts; market volatility; changes to technology; changes
to tax laws; the risk of operating in foreign jurisdictions; and
the risks posed by a controlling shareholder and other conflicts of
interest. Readers are cautioned that the foregoing list of risks,
uncertainties and assumptions is not exhaustive.
Although the Company has attempted to identify
crucial factors that could cause actual actions, events or results
to differ materially from those described in the FLI, there may be
other factors that cause actions, events or results not to be as
anticipated, estimated or intended. There can be no assurance that
FLI will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such information.
The reader is cautioned not to place undue reliance on FLI. The
Company undertakes no obligation to update forward-looking
statements if circumstances or management’s estimates, assumptions
or opinions should change, except as required by applicable
securities law. Additional risks and uncertainties affecting the
FLI contained in this news release are described in greater detail
in the Company’s current Annual Information Form and current
Management’s Discussion and Analysis available under the Company’s
profile on SEDAR+ at www.sedarplus.ca and on the Company’s website
at www.itafos.com. The FLI included in this news release is
expressly qualified by this cautionary statement and is made as of
the date of this news release.
NEITHER THE TSX-V NOR ITS REGULATION
SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE
TSX-V) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS
NEWS RELEASE.
For further information, please contact:
Matthew O’NeillExecutive Vice President & Chief Financial
Officerinvestor@itafos.com 713-242-8446
For Media and Investor Relations:
irlabsAlyssa BarryPrincipal and Co-Founderalyssa@irlabs.ca
1-833-947-5227
Itafos (TSXV:IFOS)
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