By Nick Worth
Passport Potash officials announced Tuesday the lawsuit filed in Utah by North American Potash Developments, Inc. and other parties (NAPD Group) has been dismissed with prejudice, and the 25 exploration permits held by the NAPD Group have been assigned to Passport.
The permits in question cover Passport landholdings on the east side of the Holbrook Basin. The company entered into an agreement on Oct. 31, 2012, to acquire the exploration permits from the NAPD Group, giving Passport a 100 percent, royalty-free interest in the permits.
The agreement is part of a settlement agreement in the lawsuit brought by NAPD.
“We had a contract with NAPD to acquire the permits and they would retain 10 percent interest in the holdings,” said Ken Bond, Passport’s director of Corporate Development. He said after making the deal, the NAPD Group tried to get out of the contract by claiming a breach of contract on the part of Passport.
“We recognized that these are important sections of land,” said Bond. “They’re in a strategic location.”
“We won a preliminary injunction in court to keep NAPD from taking back the exploration permits,” said Passport Vice President and Director John Eckersley. “That made it pretty certain we would win the suit, so we were able to show no breach of contract and were able to reach an agreement with NAPD.”
Under the terms of the settlement agreement Passport will pay $3,850,000 to the NAPD Group, with $150,000 due upon execution of the agreement, another $2,450,000 due upon approval by the Toronto Stock Exchange (TSX) Venture Exchange and $1,250,000 on or before Oct. 31, 2014.
Passport will also issue 750,000 common shares to the NAPD Group upon approval of the TSX Venture Exchange.
“We are thrilled to have completed the acquisition of these strategic exploration permits,” said Passport President and CEO Joshua Bleak. “We are also glad to have the lawsuit settled so that we can focus our efforts on developing this important project.”
By Nick Worth