|By Marketwired .||
|January 30, 2013 07:08 AM EST||
TORONTO, ONTARIO -- (Marketwire) -- 01/30/13 -- Ethiopian Potash Corp. (the "Company" or "EPC") (TSX VENTURE:FED) is pleased to announce that it has entered into a memorandum of understanding (the "MOU") which contemplates the early exercise of its option (the "Option") to acquire G and B Central African Resources Ltd. ("G&B"), which owns the Dankil Property, and the forming of a joint venture between EPC and Danakil Potash Corporation ("Danakil Corp.") regarding the Danakil Property ("Danakil Joint Venture").
The MOU contemplates G&B and its sole shareholder ZRH Nominees (0105) Ltd. ("ZRH") waiving the requirement for a feasibility study (the "Waiver") under the option agreement among EPC, G&B and ZRH (the "Option Agreement") in order to enable early exercise of the option and Danakil Corp. acquiring a 70% interest in the Danakil Property pursuant to the Danakil Joint Venture. The Waiver will be subject to satisfaction of all applicable conditions precedent, the restructuring of all outstanding debt of G&B incurred on behalf of EPC in connection with the Option and the commitment to a US$10 million investment by Danakil Corp. in the Danakil Joint Venture having closed in escrow.
Conditions precedent will include, among other things, due diligence, the execution of mutually satisfactory definitive agreements among the parties and obtaining all required approvals, including but not limited to TSXV and shareholder approvals.
Danakil Joint Venture
Danakil Corp. will acquire an interest in the Danakil Property through an ownership interest in a BVI joint venture company ("JVCo"), which EPC will establish to hold the shares of G&B acquired under the Option. Danakil Corp. will pay US$3 million (and commit to additional future expenditures of no less than US$7 million, as described below) for 70% of the shares of JVCo (US$1.5 million to be paid into JVCo and US$1.5 million to be paid to EPC). EPC will own the remaining 30% of the shares of JVCo. The initial proceeds paid to JVCo are expected to be used to satisfy any outstanding liabilities and for working capital purposes for the development of the Danakil Property.
The Danakil Joint Venture will be governed by a shareholders / joint venture agreement between EPC and Danakil Corp. ("JV Agreement"), which will provide (among other things) for customary drag & tag and pre-emptive provisions. Danakil Corp. will have nominees appointed to the boards of directors of JVCo and G&B (and any other group company of JVCo), in each case, that together represent a majority of the respective board of directors. EPC will be entitled to have its nominees appointed to fill the remaining positions on each respective board of directors as long as it retains not less than 10% of the issued share capital of JVCo.
The JV Agreement will also provide for Danakil Corp. to solely fund all expenditures of G&B (and any other group company of JVCo) until both (i) a National Instrument 43-101 compliant scoping study on a pre-determined section of the Danakil Property has been completed and (ii) it has funded expenditures totalling US$7 million. After Danakil Corp. has funded such expenditures, EPC and Danakil Corp. will contribute to expenditures of G&B on a pro rata basis, subject to customary dilutive provisions in the event of any failure of a party to fund its pro rata contribution from time to time.
The funding of expenditures by Danakil Corp. (as well as any subsequent pro rata funding by Danakil Corp. and EPC) will be by way of intra-group loans, on terms to be agreed between the parties. Such terms are expected to include, without limitation, a substantial threshold amount which must be met in order for any sale of EPC's interest in JVCo pursuant to drag rights of Danakil Corp. in the JV Agreement without EPC's prior approval (in its absolution discretion). In the event of a sale of Danakil Corp.'s 70% interest only, it will be a condition of such sale that any intra-group loans outstanding at such time not become payable as a result of such sale. In addition, any failure by Danakil Corp. (in breach of its obligations) to fund any expenditures will result in a claw-back of Danakil Corp.'s ownership interest in JVCo, on a pro rata basis (i.e. in order for Danakil Corp. to have maintained a 70% ownership interest in JVCo at the time of the first pro rata funding by the parties, it must have funded aggregate expenditures of at least US$10 million).
The establishment and funding of the Danakil Joint Venture will be subject to the satisfaction of all related conditions precedent and will thereafter close in escrow, pending the completion of the restructuring of G&B debt described below and the Waiver having been unconditionally granted on or before June 30, 2013.
Danakil Corp. is a wholly owned BVI subsidiary of Circum Minerals Ltd., incorporated to pursue mineral opportunities in Eastern Africa. As at the date of the MOU, each of Circum and Dankil Corp. is at arm's length to EPC.
Restructuring of Outstanding Debt
EPC will assume all outstanding debt of G&B incurred on behalf of EPC, or otherwise incurred by G&B, in connection with the Option (being approximately CAD$1.665 million) and will arrange with substantially all creditors to have all outstanding debt of EPC (being approximately CAD$3.365 million including all G&B debt to be assumed) satisfied by the issuance of 33,650,000 common shares in capital of EPC at a deemed price of CAD$0.10 per share (subject to TSXV approval). Any debt not satisfied with shares will be satisfied with part of the US$1.5 million received from Danakil Corp. under the terms of the Danakil Joint Venture or in due course, as may be agreed between EPC and any creditor.
EPC to Acquire New Potash Permits
The MOU also contemplates the acquisition by EPC, for a total purchase price of CAD$2 million (which will be satisfied by the issuance of shares of EPC at a price of $0.10 per share), of certain rights to acquire potash exploration permits for a group of mineral substances in Mali. The area is known to have produced table salt (NaCI), other salts and Sylvite (KCI).
EPC's acquisition of such permits will be subject to the satisfaction of all related conditions precedent and will thereafter close in escrow, pending the completion of the restructuring of G&B debt described above and the Waiver having been unconditionally granted on or before June 30, 2013.
The potash permits are held by a subsidiary of Premier African Minerals Limited ("PREM"), a mineral exploration and development company of which ZRH is a principal shareholder, and George Roach and Pamela Hueston are directors. As a result, minority shareholder approval of the acquisition may be required under the applicable securities laws and the rules of the TSXV. As PREM is admitted to trading on AIM, the disposal will need to comply with the AIM Rules and other regulatory requirements in the United Kingdom.
Proposed Name Change
It is proposed that EPC will (subject to shareholder approval) change its name to "AgriMinco Corp." or such other name as may be approved by the board of directors and/or the TSXV connection with EPC's acquisition of such properties as noted above.
Exercise or Termination of Option
Immediately following the satisfaction of all applicable conditions precedent, the restructuring of outstanding G&B debt and all other transactions contemplated by the MOU have closed in escrow, G&B and ZRH will provide the Waiver unconditionally and for no additional consideration, and the Option will be exercised immediately thereafter. EPC will be obligated to issue common shares of EPC in accordance with the Option Agreement in connection with the exercise of the Option.
The parties to the MOU have agreed to proceed in good faith and expeditiously to negotiate, settle and execute the other agreements contemplated therein by March 1, 2013, and to obtain all third-party and regulatory approvals as may be required by no later than June 30, 2013. However, no party to the MOU has any obligation with respect to the transactions contemplated therein (other than as described below) unless and until definitive agreements have been entered into. There can be no assurance that the definitive agreements will be entered into within the time required and/or that the transactions contemplated in the MOU will be consummated.
EPC, G&B and ZRH have also agreed to the termination of the Option Agreement on the earlier of (i) March 1, 2013, unless the parties to the MOU have settled and executed all the agreements contemplated therein (the "Contemplated Agreements") and (ii) the termination or expiration of any of the Contemplated Agreements by any of the parties thereto in accordance with the terms thereof, unless any such termination or expiration occurs as a consequence of the completion of a transaction contemplated by the MOU. Each of G&B and ZRH are considered related parties to EPC. George Roach, EPC's Chairman and CEO, is also a director and a principal of G&B and his family trust will receive the shares to be issued to ZRH under the Option Agreement.
The Board of EPC formed special committees to consider the transactions contemplated by the MOU, other than the Danakil Joint Venture (which was negotiated at arm's length). The Special Committee formed to consider the acquisition of certain potash permits from PREM is comprised of Michael Galloro and Anthony Vella. The Special Committee formed to consider the potential early termination of the Option Agreement is comprised of Michael Galloro, Anthony Vella and Pamela Hueston. George Roach, EPC's Chairman and CEO abstained on all matters related to the Company's proposed acquisition of potash permits from PREM as well as the potential early termination of the Option Agreement, as he is interested in both G&B and ZRH and is a director of PREM. Pamela Hueston also abstained from all matters related to the Company's proposed acquisition of potash permits from PREM due to her position as a director of PREM.
The Board of EPC has determined that, in the event that the transactions contemplated by the MOU are not completed, it would be in the best interest of the Company to terminate its Option and delist and wind-up the Company, and to return any residual capital to shareholders. This determination has been made after giving consideration to the available resources of EPC, EPC having been unable to pay the outstanding debt of G&B (which debt was incurred on behalf of EPC) as required by the Option Agreement, the likelihood of being able to arrange for an alternative transaction or financing and/or satisfy outstanding obligations in the immediate future and the extent of financial and other resources that will be required in order to fund future operations and maintain the Danakil Property under the terms of the Option Agreement.
The Company will be calling a special meeting of its shareholders to consider and approve the transactions described herein following the execution of all relevant definitive agreements, or if the Contemplated Agreements are not entered into on or before March 1, 2013 the Company will be calling a special meeting of its shareholders to consider and approve the wind-up the Company.
About Ethiopian Potash Corp.
Ethiopian Potash Corp. (TSX VENTURE:FED) is a Canadian company based in Toronto, Ontario and Addis Ababa, Ethiopia.
On behalf of the Board of Directors
George Roach, CEO & Director
This press release may contain forward-looking statements based on assumptions, uncertainties and management's best estimates of future events. All statements that address future activities, events or developments that the Company believes, expects or anticipates will or may occur (including, but not limited to, the potential for and timing of the early exercise of the Option, acquisition of the new potash permits, the Danakil Joint Venture and the restructuring of outstanding debt, as well as the expected terms and conditions of each such transaction) are forward-looking information. Forward-looking information is based upon assumptions by management that are subject to known and unknown risks and uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information. Factors that may cause actual results to vary materially include, but are not limited to, the failure to satisfy all conditions precedent within the requisite time, including (without limitation) the entering into of all necessary definitive agreements, obtaining the requisite third-party consents and regulatory and shareholder approvals, and changes in general economic conditions or conditions in the financial markets. Such forward-looking information is based on a number of assumptions, including but not limited to, the ability of the parties to negotiate and enter into definitive agreements, the parties being satisfied with their respective due diligence investigations, there are no material changes to the terms of any proposed transaction, and no significant decline in existing general business and economic conditions. There can be no assurance that the Company will be successful in negotiating and entering into all definitive agreements or that the Option will be exercised, the Danakil Joint Venture will be formed, the Company's outstanding debt will be restructured and/or the Company will acquire the new potash permits. Accordingly, readers should not place undue reliance on forward-looking information. The Company undertakes no obligations to update publicly or otherwise revise any forward-looking information, except as may be required by law. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, refer to the Company's filings with the Canadian securities regulators available on www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Ethiopian Potash Corp.
Chief Executive Officer and Director
+44 779 626 3999
Ethiopian Potash Corp.
Chief Financial Officer
416 907 5644
Video experiences should be unique and exciting! But that doesn’t mean you need to patch all the pieces yourself. Users demand rich and engaging experiences and new ways to connect with you. But creating robust video applications at scale can be complicated, time-consuming and expensive. In his session at @ThingsExpo, Zohar Babin, Vice President of Platform, Ecosystem and Community at Kaltura, discussed how VPaaS enables you to move fast, creating scalable video experiences that reach your aud...
Dec. 9, 2016 10:00 PM EST Reads: 269
All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in - resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud. In his session at @DevOpsSummit at19th Cloud Expo, Valentin (Val) Bercovici, CTO of Soli...
Dec. 9, 2016 09:45 PM EST Reads: 2,002
"Once customers get a year into their IoT deployments, they start to realize that they may have been shortsighted in the ways they built out their deployment and the key thing I see a lot of people looking at is - how can I take equipment data, pull it back in an IoT solution and show it in a dashboard," stated Dave McCarthy, Director of Products at Bsquare Corporation, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 9, 2016 09:30 PM EST Reads: 1,279
What happens when the different parts of a vehicle become smarter than the vehicle itself? As we move toward the era of smart everything, hundreds of entities in a vehicle that communicate with each other, the vehicle and external systems create a need for identity orchestration so that all entities work as a conglomerate. Much like an orchestra without a conductor, without the ability to secure, control, and connect the link between a vehicle’s head unit, devices, and systems and to manage the ...
Dec. 9, 2016 08:00 PM EST Reads: 1,017
An IoT product’s log files speak volumes about what’s happening with your products in the field, pinpointing current and potential issues, and enabling you to predict failures and save millions of dollars in inventory. But until recently, no one knew how to listen. In his session at @ThingsExpo, Dan Gettens, Chief Research Officer at OnProcess, discussed recent research by Massachusetts Institute of Technology and OnProcess Technology, where MIT created a new, breakthrough analytics model for ...
Dec. 9, 2016 07:45 PM EST Reads: 713
IoT is rapidly changing the way enterprises are using data to improve business decision-making. In order to derive business value, organizations must unlock insights from the data gathered and then act on these. In their session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, and Peter Shashkin, Head of Development Department at EastBanc Technologies, discussed how one organization leveraged IoT, cloud technology and data analysis to improve customer experiences and effici...
Dec. 9, 2016 06:45 PM EST Reads: 5,143
Everyone knows that truly innovative companies learn as they go along, pushing boundaries in response to market changes and demands. What's more of a mystery is how to balance innovation on a fresh platform built from scratch with the legacy tech stack, product suite and customers that continue to serve as the business' foundation. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, discussed why and how ReadyTalk diverted from healthy revenue and mor...
Dec. 9, 2016 06:15 PM EST Reads: 1,764
In this strange new world where more and more power is drawn from business technology, companies are effectively straddling two paths on the road to innovation and transformation into digital enterprises. The first path is the heritage trail – with “legacy” technology forming the background. Here, extant technologies are transformed by core IT teams to provide more API-driven approaches. Legacy systems can restrict companies that are transitioning into digital enterprises. To truly become a lead...
Dec. 9, 2016 05:30 PM EST Reads: 480
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
Dec. 9, 2016 05:30 PM EST Reads: 2,369
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
Dec. 9, 2016 05:15 PM EST Reads: 1,888
The Internet of Things (IoT) promises to simplify and streamline our lives by automating routine tasks that distract us from our goals. This promise is based on the ubiquitous deployment of smart, connected devices that link everything from industrial control systems to automobiles to refrigerators. Unfortunately, comparatively few of the devices currently deployed have been developed with an eye toward security, and as the DDoS attacks of late October 2016 have demonstrated, this oversight can ...
Dec. 9, 2016 05:15 PM EST Reads: 1,470
"MathFreeOn.com is a line coding platform for engineers and scientists. When they want to solve an engineering problem and they have to use software - they have to pay a lot of money for licenses - but with MathFreeOn you don't have to pay a lot of money. Just go to our site and write the code and you can check the result right away," explained Simon Lee, CMO of MathFreeOn, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Cla...
Dec. 9, 2016 05:15 PM EST Reads: 411
In his session at 19th Cloud Expo, Claude Remillard, Principal Program Manager in Developer Division at Microsoft, contrasted how his team used config as code and immutable patterns for continuous delivery of microservices and apps to the cloud. He showed how the immutable patterns helps developers do away with most of the complexity of config as code-enabling scenarios such as rollback, zero downtime upgrades with far greater simplicity. He also demoed building immutable pipelines in the cloud ...
Dec. 9, 2016 05:00 PM EST Reads: 2,074
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
Dec. 9, 2016 04:45 PM EST Reads: 1,869
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
Dec. 9, 2016 04:45 PM EST Reads: 1,314