Athabasca Potash Provides Update on
Strategic Review Process
SASKATOON,
SASKATCHEWAN--(Canada Newswire - July 16th, 2009)
Athabasca Potash Inc. ("API" or the
"Company") (TSX:API) today provided an update on its discussions
with third parties regarding a potential strategic alliance to develop the
Company's Burr Project in Saskatchewan as a low cost conventional potash
mine. These discussions were first described in the Company's March 30,
2009 press release, and progress was updated in API's 2009 Q1 MD & A
and May 15, 2009 press release.
The Company has established a Special Committee consisting of Messrs. John
King Burns (Chair), Leo Bingleman, CA and Ms. Dawn Zhou. The Special
Committee will consider and evaluate proposals resulting from these
discussions.
The Company has retained CIBC World Markets and Genuity Capital Markets as
financial advisors in connection with these discussions.
To date the Company has broadly solicited expressions of interest from
qualified third parties in respect of a strategic alliance to develop the
Burr Project and has held in-depth discussions and meetings with many of
these parties to advance a possible alliance. API has executed
confidentiality agreements with a number of these parties and provided them
with access to an extensive electronic data room and the opportunity to
conduct a thorough due diligence process on the Burr Project.
In response to initial indications of interest received from these parties,
the Company has expanded the scope of transactions it is considering from
joint ventures and other forms of direct participation in the development
and financing of the Burr Project to include potential mergers or potential
acquisitions of all or a portion of the Company or its business.
API will carefully consider its discussions with various parties and the
Board of Directors will make its recommendations to shareholders in due
course upon receipt of a binding offer.
"We are committed to delivering value to our shareholders in the most
efficient way possible," said John King Burns, Special Committee
Chairman. "With the definition of a measured and indicated mineral
resource of 425 million tonnes at the Burr Project and the advancement of
work on our upcoming pre-feasibility study, API believes it is
well-positioned to actively seek out a strategic alliance with an
established, global industry player to support development of the Burr
Project. During our efforts to advance an alliance, however, it also became
clear that we might need to consider a broader range of transactional
structures that were being presented to us and which might provide value to
our shareholders."
"API
has a number of potential opportunities arising during its search for a
potential strategic alliance which need to be advanced. I am fully
committed to working in the best interest of API and its
shareholders," said Ms. Zhou, the founder of API and architect of the
Burr Project, and a director and the former President & CEO of the
Company.
The Company cautions shareholders that there is no assurance whether the
Company will receive a definitive proposal with respect to a potential
transaction or strategic alliance as a result of this initiative. Also,
even if a definitive proposal is received, there is no assurance that such
a proposal will be recommended by the Special Committee or API's Board or
that such a proposal will be implemented.
The Company anticipates it will make no further announcements regarding its
strategic review process unless and until a definitive agreement is
reached, or a determination is made not to pursue a transaction or a
strategic alliance.
In conjunction with its strategic review process, the Company also
continues to advance its search for a full-time Chief Executive Officer
with senior executive experience. API has retained a professional executive
search firm to assist in this search and several prospective candidates
have been identified to date.
The targeted mining members of the Burr Project, including both the Upper
Patience Lake ("UPL") and Lower Patience Lake ("LPL")
Sub-Members, contain Measured Mineral Resources of 125,800,000 tonnes at a
grade of 21.27% potassium oxide ("K2O"), Indicated Mineral
Resources of 299,000,000 tonnes at a grade of 23.07 % K2O, and Inferred
Mineral Resources of 186,900,000 tonnes at a grade of 23.55% K2O. Mineral
resources do not have demonstrated economic viability. Susan Lomas, P.Geo.
of Lions Gate Geological Consulting Inc., is the Qualified Person (as
defined by NI 43-101) for having prepared the mineral resource estimates
and scientific and technical information in this press release and has
reviewed the results reported herein. For more scientific and technical
information relating to the estimated mineral resources for the Burr
Project, please refer to API's press release dated May 29, 2009 and the
technical report entitled NI 43-101 Technical Report for a Resource
Estimation on the Burr Project, Athabasca Potash Inc., Saskatchewan,
Canada, with an effective date of September 18, 2008 (the "Technical
Report"). The May 29 press release and the Technical Report are
available at www.sedar.com or www.athabascapotash.ca.
About Athabasca Potash Inc.
API is a Canadian based corporation and was founded with a goal of
establishing itself as a pre-eminent Canadian public company engaged solely
in potash exploration and development with focus on the Company's wholly
owned Burr Project in Saskatchewan, and to provide its shareholders with a
unique investment opportunity focused entirely on potash.
Caution Regarding Forward-Looking Information
This press release contains forward-looking information within the meaning
of applicable Canadian securities legislation, including statements with
respect to the Company's strategic review process, its ongoing
pre-feasibility study on the Burr Project and its continuing CEO search.
Forward-looking information involves known and unknown risks, uncertainties
and other factors which may cause actual results, performance or
achievements of API, or industry results, to be materially different from
any future results, performance or achievements expressed or implied by
such forward-looking information. Such factors include, among others,
exploration risks, lack of historic drill hole documentation, challenges or
impairments to title, the negotiation of access to certain potash
mineralization, permit requirements, governmental regulations, aboriginal
land use, environmental risks and competition in attracting and retaining
personnel. In addition, the forward-looking information contained in this
press release is based upon what management believes to be reasonable
assumptions, including, but not limited to, assumptions regarding the
mining and processing methods to be used in connection with any future
development at the Burr Project, mining and processing costs, transport
costs, minimum mining widths, metallurgical recovery rates, the long term
price of potash, the bulk density of potash mineralization and the
estimated extraction ratio. Should one or more of these risks and
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described in the
forward-looking information contained herein. Accordingly, readers are
advised not to place undue reliance on forward-looking information. Except
as required under applicable securities legislation, API undertakes no
obligation to publicly update or revise forward-looking information,
whether as a result of new information, future events or otherwise.
For further information:
Athabasca Potash Inc.
John King Burns
Lead Director
(306) 933-4298
Email: info@athabascapotash.ca
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