Mar 192014

By Nick Worth
Prospect Global Resources (PGR) has entered into another agreement with The Karlsson Group in order to continue operations on its Holbrook Basin potash mining project.
According to a March 14 filing with the Securities Exchange Commission (SEC), PGR has negotiated another extension in the date by which it must make a $25 million payment to Karlsson.
“On March 12, 2014, we entered into a new extension agreement with The Karlsson Group, Inc. whereby the date by which we may prepay the approximately $148 million we owe under our senior secured debt to the Karlsson Group for $25 million was extended from March 13, 2014, to April 10, 2014,” the SEC filing states.
The $25 million payment was a previously negotiated repayment of about $148 million which PGR owed Karlsson for the purchase of Karlsson’s holding in American West Potash LLC.
In connection with the extension agreement, PGR amended the warrants previously issued to Karlsson to extend the date by which the exercise price is determined. The exercise price will now be equal to the lowest price per share of PGR’s common stock sold between Nov. 14, 2013, and April 10, 2014.
PGR also extended the date by which it is obligated to deliver a NI 43 101 technical report to Karlsson from March 10 to April 10.
The NI 43 101 report is a “National Instrument” developed by the Canadian Securities Administrators (CSA) which was established in early 2001. It set standards for all public disclosure of scientific and technical information concerning mineral properties or projects.
Along with the Karlsson agreement, PGR renegotiated the date of its $7.3 million settlement with Apollo Commodities Management. Under the agreement, PGR can repay the notes by issuance of a number of shares of common stock. The date for the Apollo deal was also extended to April 10.