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East Coast Minerals to acquire 70% of WA potash project

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East Coast Minerals (ASX: ECM) has entered into a conditional head of agreement (HoA) for acquisition from Exchange Minerals a 70% shareholding in a company known as Potash Holdings Pty Limited.

In turn, Potash is the owner of 70% of the shares in a company known as West Coast Potash Pty Limited (WCP) which is the owner of 13 contiguous tenements in the Southern Carnarvon Basin of Western Australia. 

East Coast will initially acquire a 49% controlling interest in a grouping of tenements highly prospective for potash, with the potential to move to 70%.

These strategic tenements are located immediately adjacent to tenements of Reward Minerals Limited who are also exploring for potash deposits.

Potash is a highly valuable commodity in the fertiliser industry with significant growth prospects due to high world-wide demand for potash which has recently resulted in a rapid increase in price.

China and India keenly sourcing new supplies as there are no substitutes for potash as the key ingredient in fertilisers.

Funding of the proposed acquisition is to come from a major shareholder and the acquisition is conditional on shareholder approval. Initial funding of the acquisition is to come via Exchange Minerals.

Potash Holdings has the right to increase its shareholding in WCP to 100%.

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