TORONTO, April 29, 2013 /CNW/ - Sprott Resource Corp. ("SRC") (TSX: SCP) and Stonegate Agricom Ltd. ("Stonegate") (TSX: ST) today jointly announced that they have reached an agreement for Stonegate to acquire SRC's fully drawn $7.5 million loan facility for 11,538,462 Stonegate common shares at a price of $0.65 per share. The proposed transaction is expected to close by May 7, 2013.
The number of Stonegate outstanding shares will increase to 155,909,371 and SRC's ownership of Stonegate shares will increase to 58,450,462, or 37.5% of the outstanding shares, from the current level of 46,912,000, or 32.5% of the outstanding shares. The proposed transaction will be completed as a private placement to an "accredited investor" under applicable securities and is subject to the approval of the Toronto Stock Exchange (TSX).
"We welcome the continuing financial support of SRC, our largest shareholder. This transaction will eliminate the security and debt covenants associated with the loan and allow us the freedom to pursue a full range of financing options required to acquire the mining equipment fleet and to construct and commence operation of the proposed underground mine at our Paris Hills phosphate property in Idaho," said Mark Ashcroft, Stonegate's President and Chief Executive Officer.
SRC holds the Stonegate common shares for investment purposes and does not at this time intend to acquire ownership of, or control over, additional securities of Stonegate. SRC will review its holdings on a continuing basis and such holdings may be increased or decreased in the future.
About Stonegate Agricom
Stonegate Agricom, which is actively engaged in acquiring and developing agricultural nutrient projects, is currently focused on the development of two potentially world-class, long-life phosphate deposits, the Paris Hills Phosphate Project located in Idaho and the Mantaro Phosphate Project located in Peru. The Company is confident that the two deposits have sufficient size and grade to become strategic, cost-effective sources of phosphate supply for major fertilizer producers. More information is available at www.stonegateagricom.com.
About Sprott Resource Corp.
SRC is a Canadian-based company, the primary purpose of which is to invest and operate in natural resources. Through acquisitions, joint ventures and other investments, SRC seeks to provide its shareholders with exposure to the natural resource sector for the purposes of capital appreciation and real wealth preservation. SRC is well positioned to draw upon the considerable experience and expertise of both its Board of Directors and Sprott Consulting LP (SCLP), of which Sprott Inc. is the sole limited partner. Pursuant to a management services agreement between SCLP and SRC, SCLP provides day-to-day business management for SRC as well as other management and administrative services. SRC invests and operates through Sprott Resource Partnership (SRP), a partnership between SRC and Sprott Resource Consulting Limited Partnership, an affiliate of SCLP which is the managing partner of SRP.
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements" and "forward-looking information" within the meaning of applicable law, which include statements herein relating to the potential to increase mineral resource and mineral reserve estimates. Generally, forward-looking statements and forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". All forward-looking statements and forward-looking information are based on reasonable assumptions that have been made by the Company as at the date of such information. Forward-looking statements and forward-looking information are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements and forward-looking information, including but not limited to: risks relating to assumptions used in preparation of the Feasibility Study and Pre-Feasibility Study on the Lower Phosphate Zone of the Paris Hills Phosphate Project including government regulation, phosphate prices, labour costs and capital costs, and project risks including project location, permitting requirements, project delays, ground control and dilution and water management; the general risks associated with the speculative nature of the Company's business, commodity prices, current global financial conditions, uncertainty of additional capital, price volatility, the Paris Hills Phosphate Project being an advanced exploration stage project, limited operating history, no history of earnings, government regulation in the mining industry, environmental risks and hazards, impending climate change legislation, required approvals and permits, foreign subsidiaries, risks relating to the retention of the Paris Hills project, expiration of leases and permits for the Paris Hills Project, title to mineral properties, obtaining and converting mineral concessions and surface rights, community relations and project support, water rights, exploration, development and operating risks, uncertainty in the estimation of mineral reserves and resources, uncertainty of inferred mineral resources, mineral exploration, reliability of historical exploration work, absence of public trading market, risks associated with having a controlling shareholder, arbitrary offering price, dilution to the common shares, dependence on key personnel, currency fluctuations, insurance and uninsured risks, competition, legal proceedings, conflicts of interest and lack of dividends as well as those factors discussed in the section entitled "Risk Factors" in the Company's most recently filed annual information form available at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements and forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or forward-looking information. The forward-looking statements and forward-looking information contained in this press release are included for the purpose of providing investors with information to assist them in understanding the Company's expected financial and operational performance and may not be appropriate for other purposes. Stonegate does not undertake to update any forward-looking statement or forward-looking information that is included herein, except in accordance with applicable securities laws.
SOURCE: Sprott Resource Corp.
For further information:
Vice President, Investor Relations
Stonegate Agricom Ltd.
Renmark Financial Communications Inc.
For further information, or to obtain a copy of the early warning report filed in connection with SRC's holdings in Stonegate, please contact:
Chief Financial Officer
Sprott Resource Corp.
200 Bay Street, Suite 2750
Tel: (416) 977-7333
Fax: (416) 977-9555