Vancouver-Potash One Inc. said April 11 that it has agreed to sell the two permit applications it recently acquired to 0821474 B.C. LTD., a private British Columbia company, at arms length to the company. The permit applications were part of a package of three permits and two permit applications acquired by the company. The two permit applications to be sold are KP416 and KP417, which, although in the vicinity of existing or planned potash operations, are not contiguous with the Legacy Project and are not considered amenable to solution mining, the company’s preferred potash mining method. The purchase price payable by the arms-length purchaser consists of $3,097,880 in cash, of which $500,000 has been paid as a non-refundable deposit, with the balance to be paid upon issue of the permits. The company understands that the purchaser intends to either use the permits as the basis for an initial public offering, or to sell the permits to a capital pool company or other public company. The purchaser has agreed to ensure that in connection with any such event, the company will have the right to acquire up to a 13 percent interest in the public company on a post financing basis, nominate one member of the board of the public company, and purchase up to 20 percent of the securities sold in certain future financings conducted by the public company. “We are very pleased to have entered into this agreement as this provides the company an immediate financial benefit and a right to retain a significant interest in the potential development of a conventional potash mine from these two strategically located permit applications,” said Paul Matysek, Potash One president and CEO. Potash One holds an option to acquire 100 percent interest in a 97,240 acre potash subsurface exploration permit (the Legacy Project), and owns 100 percent of three other potash subsurface exploration permits covering 239,000 acres that are contiguous to the Legacy Project in Saskatchewan.
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