Sprott Resource Corp. to Invest Additional $30 Million in One Earth Farms – Canada’s Largest Farm in 2011
TORONTO, December 16, 2010 (TSX: SCP) – 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:
- Lease and seed approximately 150,000 acres of cultivated farmland
- Lease approximately 100,000 acres of pasture land and increase the size of the cattle herd to approximately 22,000 head of cattle
Incremental capital required to finance the 2011 Plan will be approximately $65 million, which will be made up of additional equity and debt.
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. |
