First Potash Announces Option Agreement, Management and Board Changes, Name Change, and Private Placement
Toronto, Ontario--(Newsfile Corp. - June 23, 2022) - First Potash Corp. (the "Company") is pleased to announce that it has entered into an option agreement (the "Agreement") with an arm's length TSX Venture Exchange listed company (the "Optionor"), which provides the Company the right to acquire (the "Option") a 100% legal and beneficial interest, subject to an existing 1% NSR royalty, in a phosphate exploration property known as the Lac à l'Orignal, Lac Vanel and Mirepoix Trilogy (the "Property"), located in the Province of Quebec, covering approximately 60.6 sq km of land. This transaction (the "Transaction"), aims to restart the Company exploration operations.
The Property is located 100 km northeast of the City of Saguenay, Quebec. The Property is located between longitudes 70° 25' W and 70° 35' W and latitudes 49° 00' N and 49° 10' N (UTM coordinates: 5,424,900N to 5,440,900N; 370,100E to 380,500E, NAD 83 Zone 19) on NTS sheets 22E01 and 22E02.
The Property is easily accessible from the City of Saguenay by Provincial Highway 172, after which a logging road, named Chemin de la Zec Martin Valin, leads directly to the Property at km 82. This road is maintained all year round by logging companies.
There are three phosphate showing that have been drilled in the past on the Property, the largest one is at Lac à l'Orignal where drill hole L-14-21 intersected 5.54% P2O5 over 99.0 m and drill hole L-12-10 intersected 5.53% P2O5 over 73.0 m. At the Mirepoix phosphate showing, drill hole 1 returned a value of 4.04% P2O5 over 18.79 m while on the Vanel showing drill hole L-12-22 returned 4.2% P2O5 over 73.5m.
Note: The above estimates are from the existing 2012 and 2014 limited drill data. The author has not done enough work to verify these results, therefore the above results are historical in nature and the company, First Potash Corp., should not treat this historical estimate as current mineral resources / reserves as defined under NI 43-101. Neither quality assurance (QA) nor quality control (QC) have been performed on the historical drill core. Additional systematic surface drilling is required to verify the historical estimates and possibly upgrade part of the historical mineral resource estimate into current Mineral Resources.
Pursuant to the Agreement, the Company will acquire the interest in the Property by paying the Optionor a total cash consideration of $1,491,000 as follows: (i) $191,000 on June 17, 2022, which payment has been made, (ii) $300,000 on or before July 7, 2022, (iii) $500,000 on or before October 17, 2022, (iv) $500,000 on or before February 17, 2023. In addition, pursuant to the Agreement, the Company will issue the Optionor 6,000,000 common shares of the Company (the "Payment Shares") on or before December 17, 2022.
The Payment Shares will be subject to a voluntary resale restriction from the date of issuance of the applicable Payment Shares, with 10% of such Payment Shares being released on March 31, 2023 and 15% of such Payment Shares being released every three months thereafter.
Furthermore, as part of the Transaction, the Company paid arm's length finders an aggregate of 700,000 common shares of the Company.
ADDITIONAL PROPERTY TRANSACTIONS
The Company also purchased two mineral claims representing approximately one sq km of land originally owned by three individuals in the Province of Quebec in the proximity of the Property for $15,000.
In addition, concurrent with entering into the Agreement, the Company entered into another option agreement with 2 individuals, to acquire 11 mineral claims representing approximately 5.6 sq km of land in the Province of Quebec in the proximity of the Property. An initial payment of $10,000 was made to secure the option, and an additional $80,000 in cash or common shares of the Company, at the option of the Company, is required to be paid on or before March 17, 2023.
Furthermore, the Company recently staked another 1,081 mineral claims representing approximately 610.3 sq km of territory in the Province of Quebec in the proximity of the Property.
MANAGEMENT AND BOARD CHANGES
The Company is pleased to announce that Laurence W. Zeifman has agreed to join the board of directors, effective immediately. Mr. Zeifman is an audit partner in Zeifmans LLP, a mid-sized Toronto public accounting firm, and has four decades of experience in public accounting. He also serves as chair of Nexia Canada, the Canadian arm of Zeifmans' international accounting network, and as a director and chair of the audit committee of the Ottawa Senators Hockey Club and as an Alternate Governor of the National Hockey League. Mr. Zeifman is a Chartered Professional Accountant and has a B.Comm. from the University of Toronto. Mr. Zeifman will be assuming the roles of chairman of the Company's board and chair of its audit committee.
In addition, the Company is pleased to announce a shuffling of its senior management roles, effective immediately, Bennett Kurtz has resigned as CEO, while remaining CFO, and Mr. John Passalacqua has been appointed CEO.
Mr. Passalacqua is an international business strategist with over 35 years of extensive technology and capital markets experience. John is involved in private and public market planning for companies in nascent, visionary industries.
In addition, the Company is pleased to announce that it intends to change its name to "First Phosphate Corp." (the "Name Change"), to be effective June 29, 2022. The board of directors approved the Name Change, by way of an ordinary resolution dated June 22, 2022.
In addition, the Company is pleased to announce that, after completion of Name Change, it intends to complete a non-brokered private placement for aggregate gross proceeds of up to $396,000 (the "Offering"), through the issuance of up to 19,800,000 common shares in the share capital of the Company (each, a "Share" and collectively, the "Shares"), at a price of $0.02 per Share. All of the securities issued in connection with the Offering are subject to a "hold period" of four months plus one day from the date of closing pursuant to applicable securities laws.
RELATED PARTY TRANSACTION
Certain insiders of directors, officers and insiders of the Company, including Messrs. Zeifman, Passalacqua, Kurtz, and Branson, intend to subscribe for up to 12,000,000 Shares in the Offering. The participation of such insiders in the Offering constitutes "related party transactions" as defined in Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company intends to rely on the exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 under sections 5.5(b), 5.5(g), 5.7(1)(e) of MI 61-101 as the Company is not listed on a specified market and the Company is in financial hardship. The Company did not file a material change report related to the Offering more than 21 days before the expected closing of the Offering as required by MI 61-101 as the Company requires the consideration it will receive in connection with the Offering immediately for working capital purposes.
About First Potash Corp.
First Potash Corp. is a mineral exploration company with minimal current activities or operations and is not currently listed on a stock exchange.
For additional information on First Potash Corp.:
CFO & Director
Telephone: 416 200-0657
Forward-Looking Information and Cautionary Statements
Certain information contained herein may constitute forward-looking statements and information (collectively, "forward-looking statements") within the meaning of applicable securities legislation that involve known and unknown risks, assumptions, uncertainties and other factors. Forward-looking statements may be identified by words like "anticipates", "estimates", "expects", "indicates", "intends", "may", "could", "should", "would", "plans", "proposed", "potential", "will", and similar expressions. Forward-looking statements in this news release include: the composition of the new management team and the new board; the expectation that the Offering will be completed in accordance with their terms; the expectation that the Company will change its name; the Company's corporate strategy including the intention to restart the Company exploration operations and fulfill the obligations of the Agreement; anticipated subscription amounts, pricing and terms under the Offering; the planned use of the net proceeds of the Offering; and other similar statements. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions that could cause results to differ materially from those expressed in the forward-looking statements.
Factors that could cause actual results to vary from forward-looking statements or may affect the operations, performance, development and results of the Company's businesses include, among other things: risks and assumptions associated with operations; risks inherent in the Company's future operations; increases in maintenance, operating or financing costs; the availability and price of labour, equipment and materials; competitive factors, including competition from third parties in the areas in which the new management team intends to operate, pricing pressures and supply and demand in the phosphate industry; fluctuations in currency and interest rates; inflation; risks of pandemics (including COVID-19), severe weather conditions and risks related to climate change; risks associated with technology; changes in laws and regulations, including environmental, regulatory and taxation laws, and the interpretation of such changes to the Company's future business; availability of adequate levels of insurance; difficulty in obtaining necessary regulatory approvals and the maintenance of such approvals; general economic and business conditions and markets; and such other similar risks and uncertainties. The impact of any one assumption, risk, uncertainty or other factor on a forward-looking statement cannot be determined with certainty, as these are interdependent and the Company's future course of action depends on the assessment of all information available at the relevant time.
With respect to forward-looking statements contained in this news release, the Company has made assumptions regarding, among other things: the COVID-19 pandemic and the duration and impact thereof; future exchange and interest rates; supply of and demand for phosphate; inflation; the availability of capital on satisfactory terms; the availability and price of labour and materials; the impact of increasing competition; conditions in general economic and financial markets; access to capital; the receipt and timing of regulatory and other required approvals; the ability of the new management team to implement its business strategies; the continuance of existing and proposed tax regimes; and effects of regulation by governmental agencies.
The forward-looking statements contained in this news release are made as of the date hereof and the parties do not undertake any obligation to update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
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