Western Potash (TSE:WPX) said Tuesday it has adopted a three-year, shareholder rights plan agreement with Computershare Trust Company of Canada.
The company said the agreement, dated March 26, 2012, has been
accepted by the Toronto Stock Exchange and was ratified by the
shareholders of Western Potash at its AGM held on March 26.
Shares of the company rallied 4.00 percent on the back of the news, trading at $1.04 late Tuesday.
Western Potash noted that the objective of its board in adopting the
plan is to “achieve full and fair value” for the company’s shareholders
in the event of an unsolicited take-over bid.
The plan is intended to give the board and the company’s shareholders
a reasonable amount of time to fully consider a bid if one is made, and
to protect the shareholders from “unfair, abusive or coercive take-over
Western Potash said that by virtue of the plan’s implementation,
anyone seeking to obtain control of the company will be encouraged to
negotiate with the board prior to attempting a take-over, or to proceed
by way of a “permitted bid”.
The company stressed that it is not aware of any pending or threatened take-over bid.
Western Potash is a mineral exploration company engaged in the
evaluation, exploration and development of potash mineral properties in
The company said it intends to develop a world-class potash deposit
in an ecologically sustainable, economically efficient and socially
In February, Western Potash hired Richard Lock as its project
director, to help the company develop its wholly-owned Milestone potash
project in Saskatchewan.
Late last year, the company announced several operational updates,
including an updated resource estimate for the Milestone property.
The company said the updated resource estimate slightly increased the
Milestone recoverable potash resource to 66.6 million tonnes in the
measured category, 186.9 million tonnes of indicated resource, and 708.2
million inferred tonnes.
In October 2011, the junior miner said an independent prefeasibility
study (PFS) confirmed its 100 percent-owned Milestone potash property
showed "significant positive economics".
The study, carried out by AMEC Americas, showed that the asset was of
sufficient size and grade to support mining for more than forty years
at a production rate of 2.8 million tonnes per year. The annual
production rate can also be expanded through a higher level of capital
An assessment of project economics, assuming a discount rate of 10
percent, showed the resulting project net present value is C$4.14
billion, while the internal rate of return is 22.7 percent.
The initial capital expenditure estimate for the plant is $2.76
billion, including allowances for port infrastructure, a water supply
pipeline, and off site railway. Unit operating costs were estimated to
be $62.35 per tonne at full production capacity.
The environmental impact study (EIS) for the project remains on
schedule and on budget, with an anticipated submission date in the third
quarter of 2012.
The Milestone property, comprising 500 square kilometres, is located
30 kilometres southeast of Regina, and southeast of Mosaic’s Belle
Plaine Mine, one of the largest producing potash solution mines in the