Transaction to Accelerate Project Timeline
and Reduce Start-Up Costs
VANCOUVER, BC, Sept. 9,
2024 /CNW/ - Sage Potash Corp., (TSXV:
SAGE) (OTC: SGPTF) ("Sage" or the "Company") is pleased
to announce that it has entered into an agreement (the "Purchase
Agreement") with a subsidiary of International Process Plants
("IPP") for the purchase of processing equipment for
$12.6 million. (Unless
otherwise stated, all currency references are in Canadian dollars.)
This equipment is capable of processing up to 300,000 tonnes per
year of potash. The majority of the equipment being purchased,
which had never been assembled or used and currently is in storage
in Europe, was fabricated in 2012
at a cost of approximately €36 million (US$54 million) at the time. The balance of
the equipment to be acquired by the Company will come from IPP's
inventory of second-hand machinery.
Under the Purchase Agreement, the Company will satisfy the
purchase price by paying $6,300,000
in cash, issuing 12,600,000 common shares to IPP at a deemed price
of $0.20 per share, and issuing IPP a
secured convertible debenture with a principal amount of
$3,780,000. The secured
convertible debenture will mature in five years while accruing
interest at 12% per annum, and in addition, the holder may convert
any or all of the outstanding indebtedness into shares of the
Company at $0.40 per share at any
time. The Purchase Agreement and the transactions
contemplated therein are subject to acceptance by the TSX Venture
Exchange ("TSXV").
In addition, the Company is announcing a non-brokered private
placement (the "Private Placement") of 37,600,000 common shares at
$0.20 each for gross proceeds of
$7,520,000 and convertible debentures
with an aggregate principal amount of $3,780,000. The convertible debentures offered
under the Private Placement will not be secured, but will otherwise
have the same terms and conditions as the IPP secured convertible
debenture.
The gross proceeds of the Private Placement of $11,300,000 will be used to satisfy the
obligations under the Purchase Agreement and for general working
capital, with $5,000,000 being
allocated to working capital and the remaining $2,520,000, together with the $3,780,000 aggregate principal amount of the
convertible debentures, being applied to the $6,300,000 cash closing requirements under the
Purchase Agreement. The cash requirements under the Purchase
Agreement will therefore mirror the value of the equity and
convertible debentures being issued to IPP. The Private Placement
is integral to the proposed transactions under the Purchase
Agreement, and therefore, the Company expects to rely on the "part
and parcel pricing exception" provided for in the policies of the
TSXV.
Moneta Securities (monetasecurities.com) is acting as
financial advisor for Sage in connection with the aforementioned
transactions.
Sage's CEO, Peter Hogendoorn
says, "We are excited about what is essentially $17.6M in combined support we are receiving from
both IPP and Moneta in assisting us to advance our project into
pilot production, from which we can grow the project both in terms
of ongoing geological data and cash flow to service both resource
and incremental production expansion. Today's
stainless steel and titanium fabrication lead-times for equipment
add significant uncertainty to project financing, both in terms of
cost and time. By buying this existing equipment now, Sage is
mitigating project risk and cost, as well as providing added
clarity to the project's timeline, which is what project funders
require. We believe this ultimately enhances shareholder value as
we seek to reduce the United
States' nearly 100% reliance on imports for potash
supply."
This seminal acquisition was led by Shilo Sazwan, who recently joined Sage along
with his engineering team. Mr. Sazwan states, "Considering
stainless steel and titanium costs have more than doubled since
these components were produced in 2012, we estimate that we are
saving in the order of US$75 to
US$100 million in project costs, not
to mention the 4–5-year fabrication lead-time before we could even
begin assembly." Mr. Sazwan and his engineering team
have over twenty-five years' experience in procuring high quality
processing plants and equipment on the secondary market. This
plant will be Mr. Sazwan's ninth plant to be built at significant
cost savings.
"Sage Potash's commitment to
quickly and cost-efficiently execute this project aligns
perfectly with our 46-year mission of providing high-quality,
existing unused and used equipment for fast-tracked projects,"
said Ron Gale, President of
IPP. "More and more companies are realizing the benefits of
unused or quality second-hand equipment and plants. They're doing
this at a fraction of the cost and time as competitors."
The Private Placement and transactions contemplated under the
Purchase Agreement are subject to acceptance by the TSXV. All
securities issued under the Private Placement and the Purchase
Agreement will be subject to a hold period of four months.
To view images of the acquired fertilizer plant please visit
sagepotash.com/300000-tpy-fertilizer-plant/
About Sage Potash Corp.
Sage
Potash is a Canadian company vested solely in the Sage Plain
Property and intends through sustainable solution mining techniques
to become a prominent domestic potash producer within the Paradox
Basin situated in Utah. For
further information, please refer to the Company's disclosure
record on SEDAR+ (www.sedarplus.ca) or contact the Company by email
at info@sagepotash.com.
About International Process Plants
International
Process Plants (IPP) is a global solutions provider for process
plants and equipment. IPP buys and sells existing plant
sites, used process systems and individual equipment. Part of the
IPP Group, Universal Glasteel Equipment (UGE)offers new and
re-glassed glass-lined equipment and parts, as well as re-glassing
services. Gale Process Solutions (GPS) designs and
builds new alloy process equipment and pressure vessels, including
its proprietary Porcupine Processor mixer/reactor/dryer, with many
of these items in stock for quick delivery. IPP has offices in 15
countries, helping manufacturers save time and money with
immediately available assets to grow their capabilities. Its
holdings include 18 complete plant sites, 110 plants for relocation
and 15,000 process systems and major pieces of equipment. For more
information, visit internationalprocessplants.com
On Behalf of the Board of Directors,
Peter Hogendoorn
CEO & Executive Chairman
(604) 764-2158
Website: www.sagepotash.com
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. This news release may contain
"forward-looking statements", which are statements about the future
based on current expectations or beliefs. For this purpose,
statements of historical fact may be deemed to be forward-looking
statements. Forward–looking statements by their nature involve
risks and uncertainties, and there can be no assurance that such
statements will prove to be accurate or true. Investors should not
place undue reliance on forward-looking statements. The Company
does not undertake any obligation to update forward-looking
statements except as required by law.
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SOURCE Sage Potash Corp.