PhosCan moves on consolidation

Toronto-PhosCan Chemical Corp. said Feb. 1 that it has entered into a definitive arrangement agreement with Baltic Resources Inc. providing for a plan of arrangement to implement the merger originally announced on Oct. 29, 2007. Pursuant to the arrangement, PhosCan will acquire Baltic’s 50 percent interest in the Martison Phosphate Project, such that PhosCan will then hold a 100 percent interest. Baltic will transfer to its newly formed subsidiary – Canadian Orebodies Inc. – all of Baltic’s assets other than Baltic’s interest in the Martison Phosphate Project, and 90 percent of the proceeds of warrants and options exercised since Oct. 29, 2007. Orebodies will assume all of Baltic’s liabilities, other than advances made by PhosCan on Baltic’s behalf in respect of the Martison Phosphate Project. Baltic will then amalgamate with PhosCan’s wholly-owned subsidiary, 1366825 Alberta Ltd. Baltic shareholders will receive in exchange for each common share of Baltic 1.4 common shares of PhosCan and one common share of Orebodies. Based on the currently outstanding shares, an aggregate of approximately 51,843,259 common shares of PhosCan will be issued in exchange for Baltic shares, such that former Baltic shareholders will hold approximately 37.2 percent of the then issued and outstanding common shares of PhosCan. Upon completion of the arrangement, three representatives of Baltic – Donald McKinnon, Chris Hodgson, and Gordon McKinnon – will become directors of PhosCan. PhosCan and Baltic will each hold shareholders’ meetings on Tuesday, March 4, 2008, to approve the matter. “The consolidation of 100 percent ownership of the Martison Phosphate Project in PhosCan is an important milestone in the development of the project,” said Stephen Case, PhosCan president and CEO. “We believe that this transaction will result in an improved platform for financing and executing the continued development of the Martison Project and an enhanced market presence that will create value for our shareholders.”