Sage Potash to receive processing equipment under agreement with International Process Plants

HOUSTON (ICIS)–Canadian potash developer Sage Potash Corporation announced it has entered into an agreement with a subsidiary of International Process Plants (IPP) for the purchase of processing equipment for Canadian dollars (C$) 12.6 million ($9.29 million).

The company, which is advancing the Sage Plain Potash project located in Utah’s Paradox Basin, said this 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 €36 million.

Sage Potash said the rest of the equipment will come from IPP’s inventory of second-hand machinery.

Under the terms the company will satisfy the purchase price by paying C$6.3 million in cash and issuing 12,600,000 common shares to IPP at a price of C$0.20 per share.

It will also issue IPP a secured convertible debenture with a principal of C$3.78 million, 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.

“By buying this existing equipment now, Sage is mitigating project risk and cost, as well as providing added clarity to the project’s timeline, which is what project funders require. We believe this ultimately enhances shareholder value as we seek to reduce the United States’ nearly 100% reliance on imports for potash supply,” said Peter Hogendoorn, Sage Potash CEO.

$1 = C$1.36