Vancouver-Spur Ventures Inc. reports that the company has signed a memorandum of understanding with Zhong Chuan International Mining Co. Ltd. to complete an equity private placement and to pursue strategic investments in China and elsewhere in Spur’s fertilizer business. Zhong Chuan, a private company, was founded by its current chairman, Mr. Sun Xinming, in 1992. It has 18 domestic and overseas direct subsidiaries dedicated to prospecting and developing precious, nonferrous, and ferrous metals and energy resources, with a focus on gold and coal. This partnership with Spur is its first strategic investment in the booming Chinese fertilizer and agricultural sector. “It is clear to us that Spur must align itself with an influential and experienced Chinese company to ensure our success in China” Steven Dean, Spur’s chairman, said at the signing ceremony in Beijing. “Zhong Chuan’s initial investment in Spur will be a signal of its confidence in Spur and in Spur’s future in the fertilizer business in China,” said Dean. “Zhong Chuan has considerable experience and success in developing mines in China and will work with Spur to advance Spur’s interests in China,” Dr. Rob Rennie, Spur’s president & CEO, stated. “Our primary focus will be to ensure that Spur’s Sino-Canadian joint venture, Yichang Maple Leaf Chemicals (YMC) can start its two mines as soon as possible.” Zhong Chuan will initially invest $ 11.34 million to acquire eighteen 18 million units of Spur at $0.63 per unit in a private placement that is expected to make Zhong Chuan Spur’s largest investor. Each unit will consist of one common share, plus one-half of a warrant and one-half of a special warrant. Each full warrant is exercisable to purchase an additional common share at an exercise price of $0.90/share until May 31, 2010; each full special warrant is exchangeable for an additional common share for an aggregate of 9,000,000 common shares at no additional cost to Zhong Chuan, subject to certain conditions. In particular, the 9,000,000 special warrants are immediately exchangeable for 9,000,000 common shares, at no additional cost to Zhong Chuan, on the completion of the formal transfer of the mining licenses for the Shukongping mine and Dianziping mines to Spur’s majority controlled Chinese joint venture, Yichang Maple Leaf Chemicals Ltd., on or before April 14, 2009. Additional contingencies can be seen atwww.spur-ventures.com. Spur says Zhong Chuan’s investment significantly increases Spur’s working capital position and strengthens its balance sheet. As a result of this investment in Spur, Mr. Sun Xinming, chairman of Zhong Chuan and a Chinese citizen, and Mr. Charles Yan, a director of Zhong Chuan and a Canadian citizen, have been invited to join the Spur board. Spur aims to be the premier integrated fertilizer manufacturer in China, with plans to produce up to one million mt/y of high-quality compound phosphate fertilizer for domestic consumption in the central province of Hubei, China. These expansion plans include the development of the largest phosphate deposit in China, located near Yichang City. Zhong Chuan will initially own 23.4 percent of Spur, and could own up to 37.5 percent if all the warrants are issued.
Transparency Across the Fertilizer Value-Chain