PhosCan Chemical Corp.
TSX VENTURE : FOS

PhosCan Chemical Corp.

June 17, 2008 11:26 ET

PhosCan Chemical Closes $55.1 Million Bought Deal Private Placement Financing

TORONTO, ONTARIO--(Marketwire - June 17, 2008) -

NOT FOR DISSEMINATION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

(All dollar amounts are expressed in Canadian currency unless otherwise noted.)

PhosCan Chemical Corp. (TSX VENTURE:FOS) is pleased to announce that it has completed the private placement financing originally announced on May 28, 2008. PhosCan issued 29,000,000 common shares at a price of $1.90 per common share to raise gross proceeds of $51,100,000, including proceeds from the sale of 8,000,000 common shares pursuant to the exercise in full of the underwriters' option.

The net proceeds from the offering will be used for advancement of the Martison Phosphate Project, working capital and general corporate purposes.

Wellington West Capital Markets Inc. acted as book-runner and lead underwriter on behalf of a syndicate of underwriters including TD Securities Inc., Cormark Securities Inc. and Research Capital Corp. PhosCan paid a cash fee to the underwriters equal to 5.0% of the gross proceeds of the offering. In addition, the underwriters received 725,000 non-transferable compensation warrants each of which is exercisable for one common share at a price of $1.90 per common share until June 17, 2009.

The common shares issued pursuant to the offering, and the common shares issuable upon the exercise of the compensation warrants, are subject to a statutory hold period which expires October 18, 2008.

The securities being offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States in the absence of registration or an applicable exemption from the registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to purchase securities in the United States

About PhosCan

PhosCan is engaged in the development of the Martison Phosphate Project, which consists of the Martison Phosphate Deposit and a planned phosphate mine, beneficiation plant, phosphoric acid plant and solid fertilizer production facility. The Martison Deposit is located 70 kilometres north of Hearst, Ontario. If the Martison Project is successfully developed, phosphate ore from the mine will be processed into a concentrate in the beneficiation plant. The concentrate will be transported by slurry pipeline to a phosphoric acid plant near Hearst where it will be combined with sulphuric acid to produce phosphoric acid. Sulphuric acid is expected to be sourced either from existing nearby base metal smelters or a sulphuric acid plant which would be built by the company. PhosCan will further process the phosphoric acid into superphosphoric acid (SPA) and/or mono-ammonium phosphate (MAP) fertilizer which will be sold to and further processed by fertilizer dealers serving the agricultural regions of western Canada and mid-western United States. The company's proposed operations will be strategically located in proximity to these target markets with ready access to excellent infrastructure including rail, power and labour.

In May 2008, PhosCan received the results of a pre-feasibility study on the Martison Project which concluded that the company should proceed immediately with a bankable feasibility study of the Martison Project. The pre-feasibility study is summarized in an N.I. 43-101 compliant technical report entitled "Martison Phosphate Project Preliminary Feasibility Study" dated May 16, 2008, which is available on SEDAR (www.sedar.com) and on PhosCan's website at www.phoscan.ca.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements with respect to the Martison Phosphate Project, and matters concerning the business, operations, strategy, and financial performance of PhosCan. These statements generally can be identified by use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe" or "continue" or the negative thereof or similar variations. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the estimates and projections regarding the Martison Project are realized. Forward-looking statements are based on a number of assumptions which may prove to be incorrect. Unless otherwise stated, all forward looking statements speak only as of the date of this press release and PhosCan does not undertake any obligation to update such statements except as required by law.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • PhosCan Chemical Corp.
    Stephen Case
    President & CEO
    (416) 972-9222
    or
    PhosCan Chemical Corp.
    James Pringle
    Vice President, Finance & CFO
    (416) 972-9222
    Website: www.phoscan.ca.