TORONTO, Dec. 16 /CNW/ - Sprott Resource Corp. ("SRC") is pleased to announce that it will be investing an additional $30 million in its subsidiary One Earth Farms Corp. ("One Earth Farms"). The funding from SRC will allow One Earth Farms to grow to become Canada's largest operating crop and cattle farm in 2011.
"One Earth Farms has quickly become an exceptionally unique, scalable agribusiness that will command a high valuation as concern for food quality and security continues to increase," stated Kevin Bambrough, President and CEO of SRC. "In less than two years, One Earth Farms has secured strategic relationships with key input suppliers and is in the process of developing equally strong relationships with food retailers, working towards the development of branded products, particularly in natural beef."
"Our goal is to generate industry leading profit margins through unprecedented scale, operating efficiencies and by breaking away from the industry norm of buying retail and selling wholesale," stated Larry Ruud, President and CEO of One Earth Farms.
To fund One Earth Farms' 2011 operating plan (the "2011 Plan"), SRC intends to exercise 30 million One Earth Farms warrants (the "Warrants"), which are exercisable for $1 per common share. Upon the exercise of the Warrants, SRC's ownership interest in One Earth Farms will increase from 66.7% to 80% and SRC will have invested $57.5 million into One Earth Farms. The balance of the incremental capital required for the 2011 Plan will be provided through a yet to be arranged debt facility and/or additional equity from SRC or other investors.
Key elements of the 2011 Plan include:
About Sprott Resource Corp.
SRC is a Canadian based company, the primary purpose of which is to invest and operate in natural resources. Through acquisitions, joint ventures and other investments, SRC seeks to provide its shareholders with exposure to the natural resource sector for the purposes of capital appreciation and real wealth preservation. SRC is well positioned to draw upon the considerable experience and expertise of both its Board of Directors and Sprott Consulting Limited Partnership (SCLP), of which Sprott Inc. is the sole limited partner. Pursuant to a management services agreement between SCLP and SRC, SCLP provides day-to-day business management for SRC as well as other management and administrative services.
About One Earth Farms Corp.
One Earth Farms is a large corporate grain and cattle farm operating in partnership with the First Nations on First Nations farmland in the Prairie Provinces in Canada.
Forward Looking Statements
This press release contains forward-looking statements. More particularly, this press release contains statements concerning the anticipated future valuation, corporate plans and initiatives for One Earth Farms, including details of its 2011 Plan. These forward looking statements are based on certain key expectations and assumptions made by management, including expectations and assumptions concerning the availability of cultivated and pasture land for lease from First Nations and the ability to enter into leases with such First Nations, One Earth Farms' operating performance, expected commodity prices, expected input prices, the availability of capital, costs for machinery, equipment and labour and expected investor demand.
Although management believes that the expectations and assumptions on which the forward-looking statements are reasonable, undue reliance should not be placed on the forward-looking statements because management can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks, which include, but are not limited to, risks associated with farming generally, including, but not limited to, weather risks, operational problems, labour shortages or disruptions, commodity price, exchange rate and capital markets volatility, input cost increases, crop diseases, infectious animal diseases, trade restrictions and lease disputes. The forward-looking statements are made as of the date hereof and SRC does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
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