Peak Minerals, Salt Lake City, Utah, announced on March 27 that it has entered into a convertible loan agreement with a global strategic investor to invest $30 million in the continued development of the company’s Sevier Playa Sulfate of Potash (SOP) Project in west-central Utah.
The proceeds of the financing will be used to fund front-end engineering and design (FEED) for the project, complete final permitting activities, prepare the site in advance of construction, refinance the company’s existing senior debt obligations, and for general corporate purposes.
As part of the loan agreement, Peak Minerals and the investor have also entered into a binding term sheet for the long-term supply of 65,000 st/y of SOP from Phase 1 of the Project, which is targeting total SOP production of 215,000 st/y.
“We are pleased to announce the completion of this financing, and to have attracted a high caliber investor to the company,” said Jason Chang, CEO of EMR Capital, which operates Peak Minerals as a wholly owned subsidiary.
“As we move the Sevier Playa Project towards construction and operation, this investment marks an important milestone for the company,” Chang continued. “These funds will provide us with the necessary capital and financial flexibility to grow our internal technical team, complete FEED, initial site works, and contract negotiation, and arrangement of project finance as we advance towards a construction decision.”
The loan matures 30 months from the date of issuance, and the principal amount of the loan is convertible into common shares of the company at the option of the holder, upon completion of certain conditions. The interest payable can be capitalized to the loan at the option of Peak Minerals.
“Peak is a truly unique and exciting opportunity to invest in the potash sector and to support long-term domestic fertilizer availability and food security in North America in a product in which farmers in the US are partially import dependent,” Chang said.