Raytec Metals Corp., subject to regulatory approval, has signed an agreement to purchase a 100-per-cent interest in exploration permit application KP441, located in Saskatchewan. Exploration permit application KP441 covers an area of approximately 88,320 acres in central Saskatchewan, in an area of both highly prospective properties and producing potash mines, including Potash Corp.'s Cory mine, located 20 kilometres south of the property. Saskatchewan Ministry of Energy and Resources data indicate that the lands are underlain by both the Patience Lake and the Belle Plain potash members. Information obtained from the Saskatchewan Research Council by the vendor on two drill holes within the permit area conducted by Canadian Exploration Ltd. in 1969 indicated intersections with both of the above-noted potash members.
Currently there is no National Instrument 43-101 report on this property, nor are there proven, indicated or inferred resources. Readers are cautioned that the presence of the Patience Lake and the Belle Plain potash members in historic drill holes does not guarantee the presence of economic quantities of potash.
The claim area
Raytec's newly acquired claims lie immediately adjacent to claims currently held by a joint venture between BHP Billiton Diamonds Inc. and Anglo Minerals Ltd. In a recent news release (see Anglo Minerals news in Stockwatch dated Jan. 10, 2008). Anglo Minerals reported on the success of its two-dimensional seismic program, including comments by Todd Montgomery, president of Anglo, wherein he states, "After reviewing the seismic interpretation, the JV has increased its area of primary interest as the seismic data indicates that the potash resource may possibly be larger and more contiguous than originally thought." In response to the success of this, Anglo and BHP announced initiation of a $16-million follow-up three-dimensional seismic program (covering an estimated 419 square kilometres) and a subsequent drill program in early 2008.
Although focused as an analysis of Potash Corp., a recent article (see RBC Capital analyst Fai Lee in the Financial Post article dated Jan. 22, 2008) points out the strong demand for potash from Southeast Asia as a major catalyst in the continuing surge in prices paid for Potash. The article also references historic lows in both customer and distributor warehouse inventories.
"With numerous pieces of evidence pointing towards a strong market for potash moving forward, we felt very confident as a board to take on this project when the opportunity arose," comments Raytec president, Brian Thurston.
Terms of the acquisition with the arm's-length vendor are as follows:
On acceptance by the TSX Venture Exchange -- $50,000 and one million shares of the company;
Commencing on the later of: 30 days following issuance of the final exploration permit from the Saskatchewan Ministry of Energy and Resources; or six months from the date of this agreement: $2-million payable in stages over a period of 12 months and the number of shares equivalent to $1-million worth of the company's stock, based upon the 15-day average closing price prior to issuance of those shares;
A 2-per-cent royalty in favour of the vendor, which may be purchased for the sum of $2-million.
In addition, the company has granted incentive stock options to its directors, officers, consultants and employees, under its stock option plan, for the purchase of up to 300,000 common shares of the company for a period of two years at a price of 40 cents per share.
We seek Safe Harbor.