SOPerior Fertilizer Corp. (the
“
Company”) (
TSX:SOP) announces
that it has entered into a letter of intent
(“
LOI”) with an arm’s length party (the
“
Counter-Party”) to form a joint venture
(“
Joint Venture”).
The Joint Venture relates to (a) commercially
developing and exploiting the Company’s massive Alunite interests
located on SOP’s Blawn Mountain Mining Lease (specifically Mining
Lease 51983-03A) (the “Lease”) located in Utah,
(b) completing the financing and construction of an alunite ore
processing plant (the “Plant”) which is to be
situated on an existing processing plant facility located in the
vicinity of SOP’s Blawn Mountain leased ground, and (c) the
ultimate processing of ore into its primary offtakes of alumina,
potassium sulphate fertilizer and sulphuric acid (herein, the
“Project”).
The Project is still subject to the parties
executing a definitive joint venture agreement in relation to same
and receiving final Board of Director approval. The LOI
provides that the parties have agreed that the exclusivity period
to finalize the definitive agreements runs until September 30,
2020.
The Parties intend to utilize a newly formed
corporate entity for the Project. Initially, the two Joint Venture
Parties will have an equal 50/50 interest, but the Counter-Party
will have the right to earn additional ownership interests as it
successfully achieves a series of milestones (the
“Milestones”) which include completion of
engineering studies, the acquisition of Plant processing equipment
and the building of the Plant. For clarity, SOP will not be
required to contribute financially to the achievement of the
Milestones.
On execution of a definitive agreement in
respect to the Project, the Company will receive a payment of
US$4.5 million from the Counter-Party. The Counter-Party will be
the “operator” of the Joint Venture and will obtain an increasing
ownership interest (and operating control) over the Project as it
achieves the aforementioned Milestones.
R. Bruce Duncan, Executive Chairman of the
Company, commented: “We are excited about contributing our Blawn
Mountain Lease to our intended joint venture with a proven arm’s
length partner who has experience developing and financing similar
projects. We look forward to now finalizing the definitive
joint venture agreement.”
About the Company
The Company’s Blawn Mountain Mining Lease
comprises over 15,400 acres in the mining friendly state of Utah.
The ore to be mined using simple surface mining operations is
alunite which is composed of alumina, potassium and sulphur.
The processing of alunite yields three valuable products – alumina,
“SOP” (potassium sulphate fertilizer) and sulphuric acid. For
every ton of SOP produced, approximately 2 tons of alumina and 2.15
tons of sulphuric acid are co-produced. Having three valuable
commodities produced from processing one ore results in higher
revenues and lower in class supply costs with the sharing of CAPEX
and OPEX. The project is permitted to produce up to 645,000
tpy (tons per year) SOP, 1.29MM tpy alumina and 1.4MM tpy sulphuric
acid.
The Company’s 2017 Pre-Feasibility Study reports
National Instrument 43-101 proven & probable mineral resources
of 426 million tons and 153.3 million tons of proven & probable
mineral reserves from two explored areas of the Lease. This
excludes potential resource additions from two unexplored areas
within the Lease that show surface indications of alunite.
This represents over 100 years of potential project reserve life
even at production rates in excess of 250,000 tpy SOP.
Potassium sulphate fertilizer (SOP) is a premium
type of potash fertilizer that is the preferred potassium source
for high value crops such as nuts, citrus, fruits, berries,
greenhouse operations as it enhances taste, appearance and shelf
life. It trades at a premium to potassium chloride (typical
potash) and its utilization is steadily increasing globally.
The Project is ideally located with mainline rail access to
supply key markets such as California as well as export market
ports.
The Blawn Mountain Alunite deposit represents
the largest known potential nonbauxite source of alumina in the US
(1). It was discovered in the 1970’s in a search for
nonbauxite sources for aluminum production as the US has negligible
bauxite reserves and has near-total dependence on imported bauxite
and alumina in primary aluminum production.
The sulphuric acid production from the project
is anticipated to replace the need for imports and is slated to be
used onsite in the processing of other valuable mineral
deposits.
The Company recognizes the potential for Blawn
Mountain with its size, multiple valuable production outputs and
economics. The proposed Joint Venture, which will bring together
project management, operational experience and supported by
substantial financial commitments, represents a significant step
towards unlocking the potential of Blawn Mountain and moving it
towards large scale production. (1) World Nonbauxite
Aluminum Resources - Alunite, Robert B Hall, Geological Survey
Professional Paper 1076A.
Forward-Looking Statements
This news release contains forward-looking
statements and forward-looking information within the meaning of
applicable securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "objective", "ongoing",
"may", "will", "project", "should", "believe", "plans", "intends"
and similar expressions are intended to identify forward-looking
information or statements. Although SOPerior Fertilizer Corp.
believes that the expectations and assumptions on which such
forward-looking statements and information are based are
reasonable, undue reliance should not be placed on the forward
looking statements and information because SOPerior Fertilizer
Corp. can give no assurance that they will prove to be correct. By
its nature, such forward-looking information is subject to various
risks and uncertainties, which could cause the Company’s actual
results and experience to differ materially from the anticipated
results or expectations expressed. These risks and uncertainties,
include, but are not limited to access to capital markets, market
forces, competition from new and existing companies and regulatory
conditions. Readers are cautioned not to place undue reliance on
this forward-looking information, which is given as of the date it
is expressed in this news release or otherwise, and to not use
future-oriented information or financial outlooks for anything
other than their intended purpose. The Company undertakes no
obligation to update publicly or revise any forward looking
information, whether as a result of new information, future events
or otherwise, except as required by law.
NEITHER THE TORONTO STOCK EXCHANGE NOR ITS
REGULATION SERVICES PROVIDER ACCEPTS RESPONSIBILITY FOR THE
ADEQUACY OR ACCURACY OF THIS RELEASE.
On Behalf of the Board of Directors
SOPERIOR FERTILIZER CORP.
“R. Bruce Duncan”Executive Chairman and Director
Contact Information E-mail
inquiries: info@SOPfertilizer.comP: (416)
903-8408www.SOPfertilizer.com
FORWARD LOOKING STATEMENTS:
This news release contains forward-looking statements, which relate
to future events or future performance and reflect management's
current expectations and assumptions. Such forward-looking
statements reflect management’s current beliefs and are based on
assumptions made by and information currently available to the
Company. Investors are cautioned that these forward looking
statements are neither promises nor guarantees, and are subject to
risks and uncertainties that may cause future results to differ
materially from those expected. These forward-looking statements
are made as of the date hereof and, except as required under
applicable securities legislation, the Company does not assume any
obligation to update or revise them to reflect new events or
circumstances. All of the forward-looking statements made in this
press release are qualified by these cautionary statements and by
those made in our filings with SEDAR in Canada (available at
www.sedar.com).