EarthRenew signs letter of intent with K+S Potash

24.05.2021

EarthRenew Inc., a Canadian company focused on regenerative agriculture solutions, announced it has signed a non-binding letter of intent to lease approximately 15 acres of land from K+S Potash Canada General Partnership (KSPC) near its existing Bethune, Saskatchewan potash mine and processing plant, on which the company wishes to construct a new fertilizer manufacturing facility.

If constructed, the company projects that the facility will have the capacity to produce up to 100,000 tonnes of granulated regenerative and organic fertilizer product.

Once produced, management expects to price these fertilizer products in a range that follows published commodity indices for potash derived products based on regional basis pricing – currently CDN$345 – $545 per metric tonne, representing a gross margin of approximately 30 percent.
 
The facility is expected to cost an estimated $10 million to $15 million and will be financed by a combination of debt, equity and suitable grants.
 
KSPC is an arm’s length party to EarthRenew and Replenish Nutrients Inc. Construction of the facility remains subject to several conditions including, without limitation: execution of definitive agreements with KSPC, including a long-term lease agreement and agreements respecting shared services; completion of permitting and engineering activities; and EarthRenew entering into design and construction contracts for the facility. EarthRenew continues to investigate several project locations across Western Canada and into the United States.
 
Pursuant to the terms of the letter of intent, EarthRenew anticipates entering into a potash supply agreement, whereby KSPC shall supply potash by-products for raw material input into the company’s regenerative fertilizer blends from its Bethune mine for a minimum period of 15 years. EarthRenew also anticipates signing a minimum 15-year lease agreement for the leased lands for the facility on 15 acres of land owned by KSPC. Other key terms of the letter of intent include terms of the lease and shared services for the facility, granulation services, marketing and distribution, and the potential option to collaborate on future product innovation and research and development within the facility.
 
According to EarthRenew’s CEO, Keith Driver, the signing of the letter of intent represents the company’s commitment to working towards increased manufacturing capacity. “We are very excited to be pursuing an opportunity that would allow us to work closely with a global leader like K+S Potash and to secure consistent access to their high-quality potash,” he said. “Customers prefer our regenerative products because they are made from natural mineral sources which are essential to the plant but do not leach into groundwater like conventional products. KSPC’s potash is an integral part of our blends and this letter of intent further establishes our long-term relationship and commitment to building the best soil health products possible.”
 
 
 
 
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