VANCOUVER, BRITISH COLUMBIA / ACCESSWIRE / April 23, 2014 /
Passport Potash, Inc. ("Passport" or the "Company") (TSX.V:
PPI)(OTCQX: PPRTF) issues the following to its shareholders:
Dear Fellow Shareholders,
At the beginning of this new fiscal year we thought it would be
helpful to look back over an eventful year, and look forward to
what is in store for Passport Potash. We guess we would be masters
of understatement if we were to say it's been a rough nine months
for potash companies. There is no getting around it, times have
been tough. Recent news seems to signal that we have turned a
corner, and that brighter times are ahead. We are heartened that
the potash industry seems poised for a comeback. We think this is
particularly true for North American potash projects. Information
compiled and published by PotashCorp and Agrium highlight some of
the positive indicators for the North American markets,
including:
-North American potash sales rose 50% last month from March 2013
to 993,000 tonnes;
-North American first quarter 2014 sales of 2.82 million tonnes
is up 48% year-on-year and the highest for a January-to-March
period since 2010;
-North American inventories have been reduced to 2.87 million
tonnes, which represents the largest decrease since October
2011.
Another encouraging sign is the improvement in potash pricing.
In a report published on April 1, Cantor Fitzgerald noted that
"data points have shown potash prices firming up in key markets YTD
- Brazil transacting at $340 from $310 in January and aiming for
$360 in April, S.E. Asia moving up from $280 at year-end to $350
for April and a $20 price increase in the U.S. to $370.?
In 2013 mining giant BHP Billiton announced to its shareholders
that potash would be added as a fifth pillar of its operations. CEO
Andrew Mackenzie noted that potash was expected to grow by 2% to 3%
per year until 2030 fueled by rising populations and greater
economic prosperity which will change patterns of food consumption,
and requiring higher yield from increasingly constrained arable
land. This announcement followed BHP's failed, unsolicited $38.6
billion offer to acquire PotashCorp in 2010. While BHP's bid was
rejected, it generated a huge of amount of interest in potash. In
an article published in the Globe and Mail last week the author
noted that there was intense speculation in the fertilizer industry
that BHP may take another run to acquire PotashCorp. Based on what
happened with potash stocks in 2010, it will be interesting to see
what positive effects this may have on the industry. We will follow
that story closely.
A positive sign that things are looking up for Passport was the
Company's announcement last week that it had secured a strategic
investment from Concept Capital Management to develop Passport's
holdings on the east side of the Holbrook Basin. The east side
development work is strategically important to helping the Company
solidify its ownership interest on its properties.
Passport has approached the past nine months the way we have
always approached difficult problems, with patience and tenacity.
Reflecting back on our Company's history, things have never been
easy. Back in 2008 when we began developing the Holbrook Basin
potash project, the Arizona State Land Department (the "ASLD")
refused to issue any exploration permits, so we took the fight to
them and lobbied for the right to drill, from the local level up to
the Governor's office until the ASLD Commissioner was replaced and
the new Commissioner began issuing exploration permits. At the time
we had a much smaller land position and struggled to obtain
financing, but we fought our way through and drilled the first four
potash holes in the Holbrook Basin in more than forty years. As the
per tonne price of potash came down from its 2008 spike we didn't
retreat, but looked for ways to advance the project, such as
consolidating the holdings of four junior exploration companies who
were retreating from the Basin. At the same time we were able to
sign agreements with the goal of working towards the purchase of
two major surface and mineral estates known as the Twin Buttes
Ranch and the Fitzgerald Ranch, and formed two cooperative
arrangements with the Hopi Tribe and HNZ Potash, LLC. By the middle
of 2011 we had built the most extensive land package in the
Holbrook Basin. In addition to our land acquisitions, Passport has
been the most active developer to date with extensive drilling and
geophysical work programs.
The big potash news in 2013 was the July 31 announcement from
Uralkali that it would be exiting from the sales organization with
Belaruskali and pursuing a volume over price strategy for potash
sales. The announcement by Uralkali had reverberations throughout
the industry and led to a 25% global potash price reduction.
Passport responded quickly to Uralkali's announcement with a news
release on the same day
(http://www.passportpotash.com/news-2013/116-passport-potash-issues-statement-on-uralkali-announcement.html),
where we offered the opinion that there is still opportunity for
good projects, with good management and excellent fundamentals. As
a company we maintain that this is still true and that the Holbrook
Basin is one of those projects, and is indeed the best greenfield
project in the world today.
While the Holbrook Basin's competitive advantages are abundantly
clear to all of those familiar with the project, Passport's main
advantage has been the continued support by those involved with the
project. We have had continued support from shareholders and
debenture holders throughout the development process. During the
course of the development of this project we have seen
unprecedented support from the local communities of Navajo County,
Apache County, Holbrook, Snowflake, Joseph City, Winslow, Saint
Johns, Eager, Springerville, Show Low, and many others. The Board
of Directors, management team, advisors, and consultants alike have
continued to fight for the success of this project and have
committed to do so going forward.
Like many of our peers we have been forced to take a number of
strategic actions, which are listed below, that we believe give us
the flexibility to quickly respond to any funding or partnership
opportunities.
Corporate Actions
-Convertible Debenture. In February, 2013 the Company announced
a non-brokered private placement of one year convertible
debentures
-Debenture Amendment and Share Consolidation. The Company
amended the 2013 convertible debenture agreement and completed a
2:1 share consolidation on March 13, 2014. The share consolidation
was done in conjunction with the debenture amendment.
-Debt Settlement. On February 7, 2014 the Company reach an
agreement with creditors to settle indebtedness in the aggregate
amount of $1,522,560.91 by issuing 27,682,926 common shares of the
Company at a deemed price of $0.055 per share.
-Board Changes. On March 4, 2014 the board of directors
unanimously voted to decrease the size of its board to 5 members,
and accepted the resignations of Dennis Ickes, Jerry Aiken, Bill
Allred and Laara Shaffer. Concurrently, Frank Hoegel was announced
as an independent director, and Vice Chairman of the board. The
present board is comprised of the following:
-David Salisbury, Chairman;
-Frank Hoegel, Vice Chairman;
-Joshua Bleak;
-John Eckersley; and
-Ali Rahimtula.
-On June 6, 2013 the Company announced the hiring of Michael
Schlumpberger, a 27 year potash mining veteran, as its new Chief
Operating Officer. Mr. Schlumpberger's first duties were primarily
overseeing the production of pre-feasibility and feasibility
reports.
-Management Changes. Laara Shaffer resigned as Chief Financial
Officer and Corporate Secretary. Former board member, Bill Allred,
took Ms. Shaffer's place as CFO. The current officers of Passport
are as follows:
-Joshua Bleak, President and CEO;
-Michael Schlumpberger, COO;
-Bill Allred, CFO; and
-John Eckersley, Executive Vice President.
2013/2014 Fiscal Year Milestones
-PEA. (3/13/13). Further to our news release on March 13, 2013,
the Company was thrilled to receive a very positive Preliminary
Economic Assessment at the beginning of March. In the PEA,
ERCOSPLAN identified a mine life of 26 years with 2.5 MTPA
production of MOP at a cost of $114 per tonne KCl.
-Hopi Drilling. (4/25/13). As a part of the Joint Exploration
Agreement with the Hopi tribe, the Company completed the first
phase of its drilling program on Hopi property
-New ASLD Permits. (5/30/13). The Company received approval for
9 new exploration permits on ASLD lands, which had previously been
closed to development. Receiving these permits answered a lingering
question on how the ASLD would dispose of its "closure
sections".
-Mineral Lease Applications. (5/31/13) The Company applied for
mineral leases for the exploration permits on ASLD trust land and
submitted a Mineral Development Report
-Geotechnical Drilling. (7/3/13) The Company completed drilling
on two geotechnical core holes, whose results will be used to
investigate the soil and rock mechanics to help determine mine
design criteria.
-Real Estate and Mineral Appraisal. (3/7/14) The Company
received a positive mineral appraisal report from the ASLD for its
mineral lease application.
-Feasibility Studies. We continue to conduct feasibility work
that is required to move the project forward. However, due to the
challenging investment environment, the Company has been unable to
secure the funds necessary to complete the feasibility studies. For
the reasons indicated in the beginning of this letter we feel
encouraged that financing sources are becoming more open to potash
investment. Until we have a major financing commitment, it is
impossible for the Company to give a new timeline for the
feasibility studies.
Is Passport Potash finished? Not even close. Is it going to be
easy? No, but then it never has been. We will continue to fight for
this project because we believe in it. We feel a sense of
responsibility to the people in the communities that surround this
project, whose lives will be blessed when this mine is built. We
also feel a sense of responsibility to the shareholders who have
stuck with us through thick and thin, and know that we will
ultimately build real value for them. It has also become abundantly
clear that the world needs sources of this valuable commodity
outside of the grasp of the cartels who have manipulated the potash
market for their own benefit for too long.
Sincerely
Passport Potash Inc.
About the Holbrook Potash Project
Passport Potash Inc. is a publicly traded corporation engaged in
the exploration and development of advanced potash properties with
its major focus on a previously explored potash property in
Arizona. Passport has acquired a strategic position in the Holbrook
Basin with land holdings encompassing over 127,000 acres. Passport
has also entered into a joint exploration agreement with the Hopi
Indian Tribe to work toward developing about 13,000 acres of
contiguous privately held Hopi land.
On behalf of the Board of Directors
PASSPORT POTASH INC.
Joshua Bleak, President
Neither TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Contact:
United States
Passport Potash Inc.
Ken Bond
480-288-6530, ext. 411
hkbond@passportpotash.com
Canada
Passport Potash Inc.
Clive Mostert
780-920-5044
cmostert@passportpotash.com
http://www.passportpotash.com/
Safe Harbor Statement
THIS NEWS RELEASE CONTAINS "FORWARD-LOOKING STATEMENTS". STATEMENTS
IN THIS NEWS RELEASE THAT ARE NOT PURELY HISTORICAL ARE
FORWARD-LOOKING STATEMENTS AND INCLUDE ANY STATEMENTS REGARDING
BELIEFS, PLANS, EXPECTATIONS OR INTENTIONS REGARDING THE
FUTURE.
EXCEPT FOR THE HISTORICAL INFORMATION PRESENTED HEREIN, MATTERS
DISCUSSED IN THIS NEWS RELEASE CONTAIN FORWARD-LOOKING STATEMENTS
THAT ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM ANY FUTURE RESULTS,
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STATEMENTS THAT ARE PRECEDED BY, FOLLOWED BY, OR THAT INCLUDE SUCH
WORDS AS "ESTIMATE," "ANTICIPATE," "BELIEVE," "PLAN" OR "EXPECT" OR
SIMILAR STATEMENTS ARE FORWARD-LOOKING STATEMENTS. RISKS AND
UNCERTAINTIES FOR THE COMPANY INCLUDE, BUT ARE NOT LIMITED TO, THE
RISKS ASSOCIATED WITH MINERAL EXPLORATION AND FUNDING AS WELL AS
THE RISKS SHOWN IN THE COMPANY'S MOST RECENT ANNUAL AND QUARTERLY
REPORTS ON FORM 10-K OR FORM 10-Q AND FROM TIME-TO-TIME IN OTHER
PUBLICLY AVAILABLE INFORMATION REGARDING THE COMPANY. OTHER RISKS
INCLUDE RISKS ASSOCIATED WITH THE REGULATORY APPROVAL PROCESS,
COMPETITIVE COMPANIES, FUTURE CAPITAL REQUIREMENTS AND THE
COMPANY'S ABILITY AND LEVEL OF SUPPORT FOR ITS EXPLORATION AND
DEVELOPMENT ACTIVITIES. THERE CAN BE NO ASSURANCE THAT THE
COMPANY'S EXPLORATION EFFORTS WILL SUCCEED AND THE COMPANY WILL
ULTIMATELY ACHIEVE COMMERCIAL SUCCESS. THESE FORWARD-LOOKING
STATEMENTS ARE MADE AS OF THE DATE OF THIS NEWS RELEASE, AND THE
COMPANY ASSUMES NO OBLIGATION TO UPDATE THE FORWARD-LOOKING
STATEMENTS, OR TO UPDATE THE REASONS WHY ACTUAL RESULTS COULD
DIFFER FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS.
ALTHOUGH THE COMPANY BELIEVES THAT THE BELIEFS, PLANS, EXPECTATIONS
AND INTENTIONS CONTAINED IN THIS NEWS RELEASE ARE REASONABLE, THERE
CAN BE NO ASSURANCE THOSE BELIEFS, PLANS, EXPECTATIONS OR
INTENTIONS WILL PROVE TO BE ACCURATE. INVESTORS SHOULD CONSIDER ALL
OF THE INFORMATION SET FORTH HEREIN AND SHOULD ALSO REFER TO THE
RISK FACTORS DISCLOSED IN THE COMPANY'S PERIODIC REPORTS FILED FROM
TIME-TO-TIME WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION.
THIS NEWS RELEASE HAS BEEN PREPARED BY MANAGEMENT OF THE COMPANY
WHO TAKES FULL RESPONSIBILITY FOR ITS CONTENTS. NONE OF FINRA, THE
SEC NOR THE BRITISH COLUMBIA SECURITIES COMMISSION HAS APPROVED OR
DISAPPROVED OF THE CONTENTS OF THIS NEWS RELEASE. THIS NEWS RELEASE
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY
JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH JURISDICTION.
SOURCE: Passport Potash, Inc.