Western Potash Corp. (TSE:WPX) (FSE:AHE) has closed its $9.6 million private placement financing, selling 20 million units at 48 cents each.
Each unit is made up of one common share and one share purchase warrant, with every warrant good for an additional share at a price of 58 cents until October 24, 2015.
The company announced earlier this month that the size of the placement was reduced to comply with the Toronto Stock Exchange policy limiting a private placement to less than 25 per cent of a company's current issued and outstanding share capital.
The new funds are "more than sufficient", Western Potash said, to fully support the completion of the feasibility study for its Milestone potash project in Saskatchewan, in addition to the environmental assessment approval expected in the first quarter of next year.
The company paid a cash finder's fee on a portion of the placement, in the amount of roughly $0.46 million.
Vancouver-based Western Potash Corp. is a stock to watch as it is on the cusp of constructing a potash solution mine in the resource-rich Canadian province of Saskatchewan that is expected to break ground in 2016.
The area has seen plenty of activity in the potash sector, as along with junior miners in the planning stages, both BHP Billiton(LON:BHP) and K+S AG have recently started work on potash mines in Saskatchewan.
The region is also home to Potash Corp (NYSE:POT) (TSE:POT) - the world's biggest producer of the crop nutrients.
The Milestone project is due to come online in 2016, with strong projected economics. A preliminary assessment of economics done by AMEC, assuming a discounted rate of 10 per cent, showed the resulting project net present value is C$4.14 billion, while the internal rate of return is 22.7 per cent.
The company recently said that the feasibility study for the property, which is now more than 90 per cent complete, continues on schedule and within budget. Final drafting and reviewing of the document is proceeding.
Western Potash is expecting a final review of the draft study around November 15, with the target date for completion set for late November, after which results will be immediately announced to markets.
The solution mine, which is expected to produce 2.8 million tonnes of potash, a key soil nutrient for growing crops, has several benefits when compared to conventional potash mines. This includes a shorter construction timeline, a lower capex and a faster rate of return versus conventional potash mine construction.
The company also expects to release an updated resource and reserve statement for the mine when it releases the feasibility study.
Currently, under NI 43-101 guidelines, the Milestone project holds 66.6 million tonnes of measured recoverable resource, 186.9 million tonnes of indicated recoverable resource and 708.2 million tonnes of inferred recoverable resource.
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