Potash North shares bloom after Saskatchewan mining permit granted

By The Canadian Press

VANCOUVER - Potash North Resource Corp. shares (TSXV:PON) rose as much as 750 per cent Wednesday when trading resumed after the company announced it is being granted a Saskatchewan mining permit.

Stock in the newly renamed Timer Resources, which had been halted May 1 on the TSX Venture Exchange at 20 cents pending news, rocketed as high as $1.70 Wednesday morning.

It changed hands later in the day at $1.45, up by $1.25 or 625 per cent, with over five million shares traded by midafternoon. Its previous high was 22.5 cents, with typical daily volume of a few thousand shares.

Potash North announced late Tuesday it had received confirmation from the Saskatchewan Mines Branch that a potash permit has been issued covering 368 square kilometres for which the company had taken over the application on May 12.

In that deal, Timer Resources - which subsequently changed its name to Potash North effective May 30 - acquired the rights to two permits totalling 758 square kilometres northeast of Esterhazy.

It paid Peninsula Merchant Syndications Corp. $1.95 million in cash, issued a $1.75-million convertible debenture to Peninsula, and assumed Peninsula's obligation to pay $2.6 million to Potash One Inc. (TSXV:KCL).

The permit area that provoked Wednesday's excitement includes two early-1960s drill holes that "encountered significant potash intersections."

Potash North said it expects that a permit covering the other property will be issued shortly, and it will then "focus on the exploration, evaluation and development of the permit areas."

Concurrently with the transfer of the permit applications, Peninsula - a private merchant bank controlled by Sam Magid, a co-founder of Salman Partners - agreed to arrange an $8.4-million equity private placement.

Under the agreement, Peninsula will name a member to the Potash North board, and Craig Angus will become president and CEO, succeeding David Baker who will remain a director.