Potash One Inc.
TSX VENTURE : KCL

Potash One Inc.

June 16, 2008 15:52 ET

Potash One Exercises Its Right to Subscribe to Private Placement in a Potash Development Company

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 16, 2008) - Potash One Inc. (the "Company" or "Potash One") (TSX VENTURE:KCL) is pleased to announce that it has exercised its right (as previously announced on May 13, 2008) to fully subscribe to the initial private placement financing of Potash North Resource Corp. ("PON"). The Company has subscribed for 27 percent of the private placement, which equates to 6,583,850 units at $0.35 per unit, for total consideration of $2,304,347. Each unit consists of one common share and one common share purchase warrant, each warrant exercisable to acquire a further common share at a price of $0.50 per share for two years. As a result of this transaction Potash One holds approximately 13% of PON's outstanding shares. In addition, Potash One holds warrants which, if exercised, could result in Potash One holding 13,167,000 shares of PON, increasing its ownership interest to up to 23% of the outstanding shares of PON, assuming no other dilutive securities of PON are exercised.

Paul F. Matysek, President and Chief Executive Officer of Potash One Inc., said: "This decision provides the Company with a number of attractive options, such as, 1) a non-dilutive source of funding for the Company, through partial or full monetization of PON shares; and 2) a continued exposure to the conventional mining Potash sector while allowing Potash One to focus on developing its large 336,343 acres of solution mining amenable potash lands with particular emphasis on the Legacy Project."

The completion of this private placement coincided with the completion of the acquisition of Permits KP 416 and 417 pursuant to which PON paid the balance of the purchase price for the permits, in the amount of $2,587,880. In connection with that transaction, Potash One entered into an Assignment, Assumption, Release and Consent Agreement with PON and Peninsula Merchant Syndications Inc. (the "Assignment Agreement"). Pursuant to the Assignment Agreement, PON has confirmed Potash One's (i) right to purchase up to 20% of any equity securities issued by PON in financing transactions until the earlier of such time as Potash One holds less than 5% of the outstanding shares of PON and such time as PON has completed 3 further equity financings, and (ii) nominate a director to the board of PON until the later of one year following closing of the acquisition of the permits and such time as Potash One holds less than 5% of the outstanding shares of PON. Potash One's nominee to the board, Paul Matysek, was appointed concurrently with the closing of the acquisition.

Potash One has acquired securities of PON for investment purposes, and may acquire additional shares of PON pursuant to the exercise of its rights under the Assignment Agreement.

ON BEHALF OF THE BOARD OF DIRECTORS,

Paul F. Matysek, M.Sc., P.Geo.
About Potash One Inc.
Potash One Inc. is a Canadian resource company engaged in the identification, acquisition, exploration and development of advanced solution mine amenable potash properties. The Company holds an option to acquire 100% interest in a 97,240 acre Potash Subsurface Exploration Permit ("the Legacy Project") and owns 100% of three other Potash Subsurface Exploration Permits covering 239,103 acres that are contiguous to the Legacy Project in Saskatchewan, Canada. The Legacy Project was previously explored by Imperial Oil Ltd. (now Exxon) and Lumsden Potash Corporation and is adjacent to one of the largest producing solution potash mines in the world. The Company has a solid balance sheet and experienced technical and corporate management to advance its current project to the next level.
Forward Looking Statement

This release includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration and development activities and events or developments, including the issuance of permits upon acceptance of permit applications, that the Company expects, are forward-looking statements. Although management believes the expectations expressed in such forward-looking statements are based on reasonable assumptions such statements are not guarantees of future performance, and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploration and development successes, continued availability of capital and financing, the denial of permit applications by applicable government authorities, and general economic, market or business conditions. Please see our public filings at www.sedar.com for further information.

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

Contact Information

  • Potash One Inc.
    Paul F. Matysek, M.Sc., P.Geo.
    President and Chief Executive Officer
    (604) 331-4431
    (604) 608-4979 (FAX)
    Email: info@potash1.com
    Website: www.potash1.com