Canadian potash developer Sage Potash Corporation has entered into an agreement with a subsidiary of International Process Plants (IPP) for the purchase of processing equipment for Canadian dollars (CAD) 12.6M (USD 9.29M).
The equipment is capable of processing up to 300,000 tonnes per year of potash.
The majority of the equipment, which has not been assembled or used and is in storage in Europe, was fabricated in 2012 at a then cost of approximately € 36M.
Under the terms, the company will satisfy the purchase price by paying CAD 6.3M in cash and issuing 12,600,000 common shares to IPP at a price of CAD 0.20 per share.
It will also issue IPP a secured convertible debenture with a principal of CAD 3.78M, with the purchase and transactions subject to acceptance by the TSX Venture Exchange.
Sage Potash said it is getting an exceptional opportunity considering stainless steel and titanium costs have more than doubled since 2012. In addition to the cost benefits the company estimates it is going to save between four to five years’ worth of fabrication time.
