Sprott
Resource Corp. to Invest Additional $30 Million in One Earth Farms � Canada�s
Largest Farm in 2011
TORONTO, December 16, 2010 (TSX:
SCP) � Sprott Resource Corp. (�SRC�) is pleased to
announce that it will be investing an additional $30 million in its subsidiary
One Earth Farms Corp. (�One Earth Farms�).�
The funding from SRC will allow One Earth Farms to grow to become
Canada�s largest operating crop and cattle farm in 2011.
�One Earth Farms has quickly become an exceptionally
unique, scalable agribusiness that will command a high valuation as concern for
food quality and security continues to increase,� stated Kevin Bambrough,
President and CEO of SRC.� �In less than
two years, One Earth Farms has secured strategic relationships with key input
suppliers and is in the process of developing equally strong relationships with
food retailers, working towards the development of branded products,
particularly in natural beef.�
�Our goal is to generate industry leading profit
margins through unprecedented scale, operating efficiencies and by breaking
away from the industry norm of buying retail and selling wholesale,� stated
Larry Ruud, President and CEO of One Earth Farms.�
To fund One Earth Farms� 2011 operating plan (the
�2011 Plan�), SRC intends to exercise 30 million One Earth Farms warrants (the
�Warrants�), which are exercisable for $1 per common share.� Upon the exercise of the Warrants, SRC�s
ownership interest in One Earth Farms will increase from 66.7% to 80% and SRC
will have invested $57.5 million into One Earth Farms.� The balance of the incremental capital
required for the 2011 Plan will be provided through a yet to be arranged debt
facility and/or additional equity from SRC or other investors.
Key elements of the 2011 Plan include:
- Lease
and seed approximately 150,000 acres of cultivated farmland�
- Lease
approximately 100,000 acres of pasture land and increase the size of the
cattle herd to approximately 22,000 head of cattle
- Incremental
capital required to finance the 2011 Plan will be approximately $65
million, which will be made up of additional equity and debt.
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 Limited Partnership (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.
About One Earth Farms Corp.
One Earth Farms is a large
corporate grain and cattle farm operating in partnership with the First Nations
on First Nations farmland in the Prairie Provinces in Canada.
Forward Looking Statements
This press release contains forward-looking statements. More
particularly, this press release contains statements concerning the anticipated
future valuation, corporate plans and initiatives for One Earth Farms,
including details of its 2011 Plan.�
These forward looking statements are based on certain key expectations
and assumptions made by management, including expectations and assumptions
concerning the availability of cultivated and pasture land for lease from First
Nations and the ability to enter into leases with such First Nations, One Earth
Farms� operating performance, expected commodity prices, expected input prices,
the availability of capital, costs for machinery, equipment and labour and
expected investor demand.
Although management believes that the expectations and assumptions on
which the forward-looking statements are reasonable, undue reliance should not
be placed on the forward-looking statements because management can give no
assurance that they will prove to be correct. Since forward looking statements
address future events and conditions, by their very nature they involve
inherent risks and uncertainties. Actual results could differ materially from
those currently anticipated due to a number of factors and risks, which
include, but are not limited to, risks associated with farming generally,
including, but not limited to, weather risks, operational problems, labour
shortages or disruptions, commodity price, exchange rate and capital markets
volatility, input cost increases, crop diseases, infectious animal diseases,
trade restrictions and lease disputes. The forward-looking statements are made
as of the date hereof and SRC does not undertake any obligation to update
publicly or revise any forward-looking statements or information, whether as a
result of new information, future events or otherwise, unless so required by
applicable securities laws.
For further information, please contact:
Steve Yuzpe
Chief Financial Officer
Tel: (416) 977-7333
Fax: (416) 977-9555