Potash North Resource Corporation

Potash North Resource Corporation
Potash One Inc.

Potash One Inc.

February 23, 2009 08:00 ET

Potash One and Potash North Sign Arrangement Agreement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 23, 2009) - Potash One Inc. ("Potash One") (TSX:KCL) and Potash North Resource Corporation ("Potash North") (TSX VENTURE:PON) have executed an arrangement agreement dated February 20, 2009 that replaces the binding letter of intent announced on January 22, 2009. Subject to satisfaction of certain conditions, Potash One will acquire all of the issued and outstanding common shares of Potash North through a court approved Plan of Arrangement (the "Business Combination").

The Business Combination will require the approval of Potash North shareholders, the Toronto Stock Exchange and the TSX Venture Exchange. Certain shareholders of Potash North, including Potash One and all the directors and officers of Potash North have agreed to vote their shares in favour of the Business Combination.

Potash North will prepare and mail to its shareholders an information circular that will include an opinion, delivered today by Canaccord Capital Corporation, financial advisor to the independent committee of the Board of Directors of Potash North, that the consideration offered pursuant to the transaction is fair, from a financial point of view, to the shareholders of Potash North other than Potash One.

Potash One believes that the Business Combination, once completed, will create one of the strongest junior potash development companies in Canada. Potash One will be fully funded through to completion of feasibility on its Legacy Project which is amenable to the solution mining of potash. On completion of the Plan of Arrangement Potash One will have a working capital position of approximately $50 million.

Information on Potash One and Potash North may be viewed on the internet at their respective websites noted below, or at the Canadian securities regulator's website at www.sedar.com.


Craig Angus, President & CEO


Paul Matysek, President & CEO

(1) Legacy Project: Potash One is a TSX listed Canadian resource company engaged in the exploration and development of advanced potash properties amenable to solution mining. The Company owns 100% of more than 330,000 acres of contiguous Potash Subsurface Exploration Permits in Saskatchewan. It includes the 97,240 acre Legacy Project which has a 43-101 compliant Inferred Mineral Resource of 391.5 million tonnes of K20 and Indicated Mineral Resource of 40.8 million tonnes of K20 and is adjacent to the largest producing solution mine in the world.

Cautionary Statements Regarding the Business Combination: Completion of the transaction is subject to a number of conditions, including regulatory approval, shareholder approvals, completion of satisfactory due diligence, a definitive agreement and approval of the British Columbia Supreme Court. There can be no assurance that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the business combination may not be accurate or complete and should not be relied upon. Trading in the securities of exploration and development stage resource companies should be considered highly speculative.

Forward-Looking Statements: Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the corporations' periodic filings with Canadian Securities Regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. Statements in this press release other than purely historical information, including statements relating to the companies' future plans and objectives or expected results, constitute forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the companies' business, including risks inherent in mineral exploration and development. The companies do not assume the obligation to update any forward-looking statement. In particular, no representation is made in this release as to the timing of the business combination, whether the business combination will complete on the terms described herein or at all, the success or value of the combined companies after the business combination. In addition, there are numerous risks and other factors that will influence a development decision, including concluding resource evaluations on mineral properties, mine design limitations, permitting risks and economic factors, all of which may be beyond our control.

U.S. Cautionary Statements:

We advise US investors that while the terms "measured resources", "indicated resources" and "inferred resources" are recognized and required by Canadian regulations, the US Securities and Exchange Commission does not recognize these terms. US investors are cautioned not to assume that any part or all of the material in these categories will ever be converted into reserves.

The Potash One Shares to be issued in connection with the Business Combination have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or the laws of any state or other jurisdiction of the United States and will be issued in reliance on an exemption from the registration requirements of the U.S. Securities Act provided by Section 3(a)(10) thereof. Neither the U.S. Securities and Exchange Commission nor any state securities commission in the United States has approved or disapproved of the Potash One Shares or passed upon the accuracy or adequacy of this document and any representation to the contrary is a criminal offence in the United States.

TSX and TSX Venture Exchange: Neither the TSX nor the TSX Venture Exchange has reviewed, and neither accepts, responsibility for the adequacy or accuracy of this release.

Contact Information

  • Potash North Resource Corporation
    Craig Angus
    President & CEO
    (604) 697-6262
    Website: www.potashnorth.com
    Potash One Inc.
    Paul Matysek
    President & CEO
    (604) 331-4431
    Website: www.potashone.com
    Kin Communications
    Arlen Hansen
    (604) 684-6730