VANCOUVER, British Columbia (Reuters) - Sprott Resource Corp said on Thursday it will invest C$27.5 million ($22.4 million) in a deal with Native Indian bands in Canada's Prairies to create what could become the country's largest farming operation.
The newly created One Earth Farms Corp will lease an initial 50,000 acres of farmland from aboriginal groups for crops and ranching, and has letters of intent that could allow it to eventually lease up to 1 million acres.
The investment firm, chaired by high-profile money manager Eric Sprott, said the project would let it and the Indian land owners take advantage of rising demand for agricultural products at a time when the amount of arable land and water supplies is declining.
The company has either lease agreements or signed letters of intent to lease with 18 Native bands in Saskatchewan and Alberta, and an official said news of the project has generated interest from other Native groups.
"The phone has been ringing off the hook," said Larry Ruud, One Earth Farm's chief executive.
Ruud said the project stems from discussions Eric Sprott held several years ago with some aboriginal leaders about potential investment opportunities.
Not all the land the company has agreements for can be used now because it is currently being farmed by other renters, but that will also allow the company to phase in its operations, Ruud said.
Sprott Resource shares closed up 5 Canadian cents at C$2.75 in Toronto on Thursday.
Reporting Allan Dowd, editing by Rob Wilson