NEW YORK, June 2 (Reuters) - Western Potash Corp said on Sunday that joint-venture company CBC Holding Corp has agreed to make a strategic investment in the Canadian junior miner that will result in its owning 19.9 percent of the company.
CBC Holding, jointly owned by China BlueChemical Ltd and Benewood Holdings Corp Ltd, has agreed to an equity investment of C$31.98 million in Western at 71 Canadian cents per share.
The investment for over 45 million newly issued common shares will result in CBC owning 19.9 percent of Western and give it a seat on Western's board.
Vancouver-based Western Potash has been looking for outside capital to develop its proposed 2.8-million tonne per year Milestone potash mine in Saskatchewan. Potash is a key soil nutrient for growing crops.
As part of the deal, CBC or a buyer it designates will buy up to 30 percent or 1 million tonnes of potash annually from the Milestone project for 20 years.
China BlueChemical is a majority-owned subsidiary of China National Offshore Oil Corporation . Benewood is a wholly owned subsidiary of GUOXIN International Investment Corporation Limited, a financial investment company registered in Hong Kong.