TORONTO, ONTARIO -- (Marketwired) -- 06/26/13 -- Ethiopian Potash Corp. (the "Company" or "EPC") (TSX VENTURE: FED) is pleased to provide this corporate update on developments in Ethiopia in advance of its annual and special meeting of shareholders, scheduled for June 30, 2013 (the "Meeting").
The Company would like to advise shareholders of the anticipated structure and operations of the Company after the Meeting, assuming the transactions contemplated, as described in the Company's Management Information Circular (the "Circular") receive the required shareholder approval and other conditions precedent to closing are met. As set out in the Circular and materials relating to the Meeting, in the case that shareholder approval for any contemplated transaction is not received, none of the contemplated transactions will be completed and, as a result of EPC not having the ability to fund operations in Ethiopia, EPC will undertake the process of winding-up and delisting.
If the contemplated transactions receive the requisite shareholder approval, the Company will receive US$1.5 million as consideration for the transfer of a 70% interest in the project, will retain a 30% interest in the Danakil properties (the "Danakil Project") and will not be required to contribute to any further expenditures until a total of $8.5 million is contributed by the other parties with an interest in the Danakil Project and the scoping study is completed. In addition, the Company will hold valuable and highly prospective tenements in Togo with established exploration targets for phosphates and industrial minerals adjacent to existing phosphate mining operations, approximately 30 Kilometres from tide water and with access to all infrastructures normally associated with the exploitation of these minerals. In addition, EPC will obtain the right to explore for potassium and other prescribed minerals in the Taoudeni and Oglat zones in the Kidal region of Mali located in the northern part of Mali.
In addition, the Company has proposed a change in management with the addition to the board of directors of Ian Stalker and David De Jong Weill, each providing financial and mining expertise and experience. Their respective CVs are set out in the Circular relating to the Meeting and the shareholders of the Company will have an opportunity to elect these two new nominees at the Meeting.
THE DANAKIL PROJECT UPDATE
The Danakil Project is under the direct management of Plinian Capital Ltd. ("Plinian"), a private equity company that specializes in mining investment and operation controlled by Mr. Bradford Mills. Plinian Capital is a significant investor in TSX listed Mandalay Resources Corporation where Mr Mills serves as CEO and West African Minerals Corporation where Mr. Mills serves as the Executive Vice-Chairman of. Mr. Mills is the current Managing Director of Circum Minerals Ltd. ("Circum"), and the Plinian group is the largest shareholder of Circum.
MONTHLY ACTIVITIES REPORT
During May, senior geological staff reviewed all available project data and finalized operational plans for commencement of resource definition drilling in June. All of the necessary drilling, road construction and camp management contracts were put in place and drilling is expected to start in the last week of June.
The license renewal request was filed on May 24, 2013 to the Ministry of Mines, Ethiopia. Planned activities for June include the selection of the Pre-Feasibility consultant and QA/QC lab for the project, commencement of drilling, commencement of water resource assessment, transport options and port options.
Plinian has engaged two senior geologists, who are established in Addis Ababa, Ethiopia and at the camp site in the Danakil Depression, along with a complement of ten Ethiopian staff.
APPOINTMENT OF INDEPENDENT STUDY MANAGER
Completion of the Pre-Feasibility Study relating to the Danakil Project will require oversight of an Independent Study Manager. The search has been narrowed to two groups. Both groups have extensive experience with In-Situ Leaching ('ISL') of potassium salt deposits. Once appointed, the Independent Study Manager will complete the resource statements, in-situ leach design, processing flow sheet and plant design. Plinian's senior engineer will complete the infrastructure inputs, namely water, power, road/rail transportation solutions and port handling requirements. It is anticipated that the Company will benefit enormously in cost and time from the prior feasibility study work completed by its neighbours.
PHASE I PROJECT - RESOURCE ESTIMATION
The key objectives of phase 1 of the Danakil Project is to: (i) prove to an indicated resource category of sufficient tonnage and grade to trigger the progression of the project. The drill programme currently being implemented is targeting; (i) a completed economic Scoping Study by the Fall 2013 and (ii) a completed Pre-Feasibility Study ("PFS") by mid 2014.
To view the graph associated with this release, please visit the following link: http://media3.marketwire.com/docs/n626fed1.pdf.
In order to increase shareholder participation at the June 30, 2013 meeting, the Company has retained CSTPhoenix Advisors ("Phoenix") in connection with the solicitation of proxies at a cost of $23,000 and reimbursement of disbursements related to the solicitation. The expenses of soliciting proxies, including the cost of preparing, assembling and mailing the Management Information Circular and proxy material to shareholders, will be borne by the Company.
If you have any questions about this letter, the Management Information Circular or how to vote, please contact Phoenix by telephone 1-800-239-6813 or e-mail at email@example.com.
ABOUT ETHIOPIAN POTASH CORP.
Ethiopian Potash Corp. (TSX VENTURE: FED) is a Canadian company based in Toronto, Ontario and Addis Ababa, Ethiopia.
Mr. Bruce Cumming B.Sc.Hons (Geol.), Pr.Sci Nat, an independent "qualified person" as defined in Canadian National Instrument 43-101, has prepared or supervised the preparation of the information that forms the basis for the written disclosure in this press release related to the Danakil Project. A copy of the Preliminary Resource Assessment Study - Danakil Potash Deposit, Afar State / Ethiopia is available on SEDAR at www.sedar.com.";
On behalf of the Board of Directors
George Roach, CEO & Director
This press release may contain forward-looking statements based on assumptions, uncertainties and management's best estimates of future events. All statements that address future activities, events or developments that the Company believes, expects or anticipates will or may occur (including, but not limited to, matters relating to the contemplated transactions and the Danakil Project) are forward-looking information. Forward-looking information is based upon assumptions by management that are subject to known and unknown risks and uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information. Factors that may cause actual results to vary materially include, but are not limited to, the failure to satisfy all conditions precedent within the requisite time, including (without limitation) the entering into of all necessary definitive agreements, obtaining the requisite third-party consents and regulatory and shareholder approvals, and changes in general economic conditions or conditions in the financial markets. Such forward-looking information is based on a number of assumptions, including but not limited to, there being no material changes to the terms of any proposed transaction, and no significant decline in existing general business and economic conditions. There can be no assurance that the Company will be successful in completing the contemplated transactions. Accordingly, readers should not place undue reliance on forward-looking information. The Company undertakes no obligations to update publicly or otherwise revise any forward-looking information, except as may be required by law. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, refer to the Company's filings with the Canadian securities regulators available on www.sedar.com.
Neither the 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.
Ethiopian Potash Corp.
Chief Executive Officer and Director
+44 779 626 3999
Ethiopian Potash Corp.
Chief Financial Officer and Director
416 907 5644
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