Spur Ventures To Advance Yichang Phosphate Project
Vancouver, British Columbia --
Spur Ventures Inc. ("Spur"; CDNX: "SVU") wishes to announce that
in recent weeks considerable progress has been made on a number
of aspects relating to the Yichang Phosphate Project in China.
Project Financing
Spur has engaged Triennex (Pty) Ltd. ("Triennex") of South
Africa, a financial specialist in arranging and structuring
capital and infra-structural development projects in emerging
markets and developing economies. Triennex has completed a number
of similar infrastructure financings relating to projects in
Africa. Their mandate is to arrange total project financing from
a number of international banks in which the risks have been
identified and each task managed or offset so that it is
acceptable to the banks. Triennex will be remunerated by way of
a pre-arranged success fee, which shall be capitalized into the
financing made available.
Also, in recent weeks, Spur has had advanced discussion with
potential joint venture partners for the Yichang project. Due
diligence in China has been undertaken by these companies.
Project Engineering
Jacobs Engineering Inc. ("Jacobs"), of Lakeland, Florida, who
prepared Spur's initial feasibility study for the Yichang
project, has been commissioned by Spur to examine project
implementation and reconfiguration alternatives. Spur believes
that these alternatives may be necessary to increase the
likelihood that potential joint venture partners approve the
proposed ultimate product mix for the Yichang project.
Jacobs proposed to reconfigure the product mix to produce
fertilizer NPK and animal feed additive dical (di-calcium
phosphate). When implemented in two stages with purchased
phosphoric acid in stage one, the initial capital cost will be
reduced to approximately US$121 million and the total capital
cost to US$325 million. This reconfiguration by Jacobs increases
the projects internal rate of return substantially and puts an
estimated net present value (NPV) on the project in excess of
US$300 million.
Furthermore, Spur's Board of Directors has decided to advance the
project by commissioning Jacobs Engineering to begin the next
phase of engineering. An upturn in the international fertilizer
business has become evident resulting in increased activities
amongst the large industry participants. The Yichang project is
expected to be a low-cost producer of phosphate fertilizers and
animal feed additives.
Equity Financing
The initiatives outlined above will require additional capital.
The Board of Directors have approved, and will seek CDNX
approval, to complete a non-brokered private placement to issue
up to 5 million units at $0.60 per unit, each unit consisting of
one common share and one share purchase warrant exercisable at
$0.75 per share for 2 years. This proposed financing, if
completed, will allow Spur to advance the Yichang project towards
construction and, at the same time, to invest in other projects
under consideration that could provide near-term cash flow. The
Company may pay a finders fee relating to the financing.
This news release includes certain statements that may be deemed
to be "forward-looking statements" regarding the timing and
content of upcoming programs. Although Spur Ventures 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 phosphate and potash prices, exploitation and
exploration successes, continued availability of capital and
financing, and general economic, market or business conditions.
ON BEHALF OF THE BOARD OF DIRECTORS OF
SPUR VENTURES INC. |
