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The purpose of the Plan is to provide shareholders and the Board of Directors with additional time to assess and evaluate any unsolicited bid for the Company, and to provide the Board with adequate time to identify, develop and negotiate alternatives to any unsolicited bid in order to maximize shareholder value. The Plan is not intended to block takeover bids for the Company that treat shareholders fairly. The Plan is not being adopted in response to any proposal to acquire control of the Company.
The Rights issued under the Plan only become exercisable if a person, or a group of persons acting collectively, acquires 20% or more of the outstanding common shares of the Company without complying with the Permitted Bid provisions of the Plan. A Permitted Bid is a bid which meets certain specified conditions, including that the bid is made to all common shareholders by way of a takeover bid circular that remains open for a period of not less than 60 days, that no shares may be taken up and paid for unless more than 50% of the common shares held by independent shareholders are deposited and not withdrawn, and that the bid will remain open for a period of 10 days after the bidder announces that more than 50% of the shares held by independent shareholders have been taken up and paid for. In the event that a takeover offer does not comply with the Permitted Bid provisions, Rights holders may purchase common shares of the Corporation at 50% of the prevailing market price at the time the Rights become exercisable. The issuance of the shares upon exercise is subject to receipt of certain regulatory approvals.
The Plan is subject to approval by the TSX Venture Exchange, and ratification by the shareholders of the Company. Shareholder ratification of the Plan will be solicited at a shareholders' meeting to be held on or before March 24, 2009. If ratified, the Plan will have an initial term of three years. If not ratified at the meeting, the Plan will terminate and cease to be effective.
About PhosCan
PhosCan is engaged in the development of the Martison Phosphate Project, which consists of the Martison Phosphate Deposit and a planned phosphate mine, beneficiation plant, phosphoric acid plant and solid fertilizer production facility. The Martison Deposit is located 70 kilometres north of Hearst, Ontario. If the Martison Project is successfully developed, phosphate ore from the mine will be processed into a concentrate in the beneficiation plant. The concentrate will be transported by slurry pipeline to a phosphoric acid plant near Hearst where it will be combined with sulphuric acid to produce phosphoric acid. Sulphuric acid is expected to be sourced either from existing nearby base metal smelters or a sulphuric acid plant which would be built by the Company. PhosCan will further process the phosphoric acid into superphosphoric acid (SPA) and/or mono-ammonium phosphate (MAP) fertilizer which will be sold to fertilizer dealers serving the agricultural regions of western Canada and mid-western United States. The Company's proposed operations will be strategically located in proximity to these target markets with ready access to excellent infrastructure including rail, power and labour.
SOURCE: PhosCan Chemical Corp.
PhosCan Chemical Corp. Stephen Case President & CEO (416) 972-9222 PhosCan Chemical Corp. James Pringle Vice President, Finance & CFO (416) 972-9222
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