China co to take $80m stake in Western Potash

More corporate activity in the potash sector. IMO it is only a matter of time until it is our day in the sun. In regards to unrewarded's post a few days ago, I would be far from surprised if a number of major players were not running the numbers over LD very closely.


Source: http://www.leaderpost.com/Chinese company take stake Western Potash/11192880/story.html
Chinese company to take 51% stake Western Potash for $80M
By Bruce Johnstone, Leader-Post July 7, 2015

REGINA — Less than a week after proposing to build a $80.6-million pilot plant at its Milestone potash project, near Kronau, Western Potash announced Monday that a Chinese investment firm plans to invest $80 million with the Vancouver-based junior mining company.
If the deal with Beijing Tairui Innovation Capital Management goes through, the proceeds will be used to build the pilot plant, which will use horizontal drilling technology to produce up 150,000 tonnes of potash per year, the company said in a press release.
The deal also comes with a hefty price tag, however, as Tairui will take over 51 per cent ownership of the company. But Western Potash CEO Patricio Varas believes the deal is the only way to get the Milestone project built, with current market conditions and low potash prices.
“This (deal with Tairui) is very positive for the company,’’ Varas said. “The alternative was to sit and wait for better markets.”
While the close timing of the two announcements was no coincidence, Varas said Western Potash has been negotiating with Tairui for months. “I think they see a huge opportunity ... (Western Potash) is hugely undervalued.”
Tairui is the just the latest Chinese company to take an interest in Western Potash and its Milestone project, which initially proposed to build a 2.8-million-tonne-a-year potash solution mine at a cost of about $3 billion. Last week, the company announced it was downscaling the project to a 150,000 tonne a year pilot plant, with potential to expand to one million tonnes a year at a cost of under $1 billion.
CBC (Canada) Holding Co., a joint venture between two Chinese companies, acquired about 20 per cent of Western Potash in 2013.
“The other partners know the need for potash in Southeast Asia and China and they feel they can do something good with it over there’’
CBC has the option to increase its stake in the company up to 20 per cent, Varas said. “They have the right to maintain their interest,’’ Varas said. “They’ve indicated to us they would to participate to some level.”
Varas said the company hopes to have the $80-million transaction completed by the end of August, with construction to begin next year and completion set for mid-2017. “We’re looking at a timeline of about two years from the time we’re finished financing.’’
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