
November 22, 2022
CoTec Holdings Making Anchor Investment to Accelerate Commercialization of International Zeolite's Revolutionary Proprietary NEREA(R) Fertilizer Technology
International Zeolite Corp. (TSXV: IZ) (OTCQB: IZCFF) (FSE: ZEON) ("IZ") and CoTec Holdings Corp. (TSXV: CTH) ("CoTec") are pleased to announce that CoTec has agreed to make a $2 million strategic investment in IZ to support its go-to-market activities in the agricultural and green tech segments.
CoTec and IZ share similar visions and objectives and are focused on creating a portfolio of green disruptive technologies that are high-margin, eco-friendly and deliver reductions in carbon emissions. The investment from CoTec is expected to fast track IZ's ability to move rapidly to full commercialization, marketing and sales capabilities for its disruptive agricultural products and solutions. The funding will support the construction of IZ's first NEREA® production facility to be in Ontario, Canada with an expected completion date of March 2023. In addition to its financial investment, CoTec will support IZ through the involvement of its management team, who collectively have extensive global reach and expertise in green technologies.
"We are excited to partner with IZ and support their efforts to commercialize its proprietary NEREA® technology," commented Mr. Julian Treger, CEO of CoTec. "Fertilizer is a major contributor to global CO2 emissions and NEREA® is exactly the type of breakthrough the agricultural industry needs to reduce its carbon footprint - independent studies have shown that it could improve the efficacy of fertilizer by a factor of up to eight and reduce plant and crop growth cycles by as much as twenty-five per cent. Additionally, at a time of conflict in Ukraine, NEREA® could significantly reduce the Western world's fertilizer needs and its exposure to higher risk jurisdictions for much needed supply. Our investment will give us a substantial interest in IZ, and we intend to work closely with the IZ management team to help them aggressively roll out this exciting technology."
"We are very pleased to partner with CoTec and are excited to commence the commercialization of NEREA® products" said Ray Paquette, IZ CEO. "Once our products are established in Canada, we will roll it out to the other jurisdictions where we have secured exclusivity."
NEREA®
NEREA® is IZ's proprietary on demand grow system designed for all agricultural sectors: nurseries, greenhouses, horticultural growers, and outdoor growers. It imbeds into zeolite particles all the macronutrients and micronutrients needed by plants to grow healthy and effectively. It is a demand driven system that allows plants to receive nutrients based on their need and at the time the plant needs it. Independent trials and validation studies show that NEREA® decreases crop time resulting in additional crops for growers thus increasing grower ROI, reduces the overall requirements for fertilizer by up to 80% resulting in much lower input costs for growers, and reduces greenhouse gases significantly through the reduction of fertilizer consumption. IZ has secured the rights to manufacture, market and sell NEREA® in Canada and the United States for a period of 20 years from approval of the NEREA® intellectual property in the relevant jurisdictions and global exclusivity arrangements are pending.
Transaction Terms
CoTec has signed a subscription agreement to purchase 13,333,334 units ("Units") from IZ on a private placement basis at a price of $0.15 per unit for an aggregate subscription of $2,000,0000 (the "Private Placement"). King Chapel International ("Kings Chapel"), a company associated with Mr. Treger, is also a party to the agreement and will subscribe for 2,000,000 Units, providing IZ with aggregate subscription proceeds of $2,300,000. Each Unit will consist of one common share of the company (each, a "Common Share") and one common share purchase warrant (each, a "Warrant"). Each Warrant will be exercisable for one Common Share at a price of $0.18 for 12 months from the closing date, which if exercised provides an additional $2,760,000 in operating capital for IZ.
$170,000 of the net proceeds of the Private Placement will be used to repay shareholder loans owing to Ray Paquette, the CEO of the company, and his affiliates, and the balance will be used to fund the commercialization of NEREA products for manufacturing, marketing and sales in Canada and for working capital purposes.
Pursuant to the subscription agreement, CoTec and Kings Chapel have each agreed to provide up to $300,000 in bridge loan funding to IZ (together the "Bridge Loan"). CoTec agreed to advance its funding concurrently with the execution of the Subscription Agreement and Kings Chapel will advance its Bridge Loan upon the satisfactory completion of its due diligence review of IZ. The Bridge Loan bears interest at 7% per annum and is repayable on the earlier of November 21, 2024, closing of the Private Placement and a change of control of IZ. The Bridge Loan is secured by a first ranking charge in favour of CoTec over all of IZ's assets. Amounts outstanding under the Bridge Loan will be credited towards the amount payable by CoTec and Kings Chapel upon completion of the Private Placement.
Upon completion of the Private Placement:
- CoTec and IZ will enter into an investor rights agreement pursuant to which CoTec will have customary pre-emptive rights to participate in future equity issuances by IZ and the right to appoint two members of IZ's board of directors;
- CoTec and Ray Paquette, the CEO and a director of IZ, will enter into a debenture call agreement pursuant to which CoTec will have the right to purchase all or any part of the Convertible Debentures (as defined below) at a price equal to 100% of the outstanding principal amount under the purchased Convertible Debentures at any time or from time to time until July 31, 2023; and
- CoTec will own 23.6% of the issued and outstanding Common Shares and 38.1% of the outstanding Common Shares on a partially-diluted basis (assuming the exercise of all of its Warrants).
As required by the policies of the TSX Venture Exchange (the "TSXV"), IZ will seek disinterested shareholder approval at its annual and special shareholder meeting to be held on January 4, 2023 for a resolution to approve CoTec or Kings Chapel becoming a "control person" of IZ. The directors and officers of IZ, who currently own 20.6% of the outstanding Common Shares, have agreed to vote all of their Common Shares in favour of this resolution.
Completion of the Private Placement is subject to a number of conditions, including receipt of IZ shareholder approval and all necessary TSXV approvals, CoTec completing its due diligence investigations of IZ and being satisfied with the results of such investigations in its sole discretion, receipt of all necessary regulatory approvals for the sale of NEREA® in the United States, the absence of any material adverse effect in respect of IZ and other customary conditions.
Debt Exchange
Ray Paquette, the CEO and a director of IZ, and an affiliated company currently hold two promissory notes of IZ in the original principal amounts of $243,000 and $793,000 respectively (the "Promissory Notes"). As of November 14, 2022, the aggregate amounts owing under the Promissory Notes (including accrued and unpaid interest) was $266,061.70 and $881,261.54, respectively. In addition, IZ currently owes an affiliated company of Mr. Paquette $108,000 in unpaid management fees. Mr. Paquette and IZ have entered into a debt exchange agreement pursuant to which IZ's obligations under the Promissory Notes and the unpaid management fees will be satisfied in exchange for the issuance to Mr. Paquette and his affiliated company of convertible debentures in the aggregate principal amount of $1,255,323.23 (the "Convertible Debentures").
Each Convertible Debenture will bear interest at the prime rate of interest published by Royal Bank of Canada + 2%. The Convertible Debenture held by Mr. Paquette will be payable in five equal annual instalments starting on June 30, 2023, and ending on June 30, 2027. The Convertible Debenture held by Mr. Paquette's affiliated company will be payable in two equal annual instalments on June 30, 2023 and June 30, 2024. The principal amount outstanding under the Convertible Debentures will also be convertible, at any time and from time to time, at the option of the holder, into Common Shares based on a conversion price of $0.15 per share, subject to customary adjustments.
The debt exchange transaction and the issuance of the Convertible Debentures is subject to TSXV approval. The debt exchange transaction is a related-party transaction as defined under Multilateral Instrument 61-101 ("MI 61-101"). Because IZ's shares trade only on the TSXV, the issuance of the Convertible Debentures is exempt from the formal valuation requirements of Section 5.4 of MI 61-101 pursuant to Subsection 5.5(b) of MI 61-101 and exempt from the minority approval requirements of Section 5.6 of MI 61-101 pursuant to Subsection 5.7(a) of MI 61-101.
All securities issued under the Private Placement and the debt exchange transaction are subject to a hold period of four months plus a day, in accordance with applicable securities laws and the policies of the TSXV.
On Behalf of the Board of International Zeolite Corp.
"Ray Paquette"
CEO
604.684.3301
On Behalf of the Board of CoTec Holdings Corp.
"Braam Jonker"
CFO
604.992.5600
About International Zeolite
International Zeolite's mission is to produce a line of high-value top-tier performance natural zeolite products and solutions. We believe that real change comes from the ground up. Our focused aim is to utilize the naturally occurring zeolite mineral to innovate commercial agriculture, industry and consumer practices that outperform their competition, and are better for the environment and world populations. Our purpose-driven zeolite solutions represent a new era of earth conscious environmental science that will relentlessly seek to transform agriculture, industry, and households to safer, sustainable, superior means of operation.
International Zeolite is a publicly traded issuer listed on the TSX Venture Exchange and trades under the symbol IZ.V
For further information, please visit www.internationalzeolite.com or contact Ray Paquette - (604) 684.3301
For Investor Inquiries:
info@internationalzeolite.com
For Sales and Commercial Inquiries:
sales@earthinnovations.ca
About CoTec
CoTec is an ESG-focused company investing in innovative technologies that have the potential to fundamentally change the way metals and minerals can be extracted and processed for the purpose of applying those technologies to undervalued operating assets and recycling opportunities, as the Company seeks to transition into a mid-tier mineral resource producer. The Company is committed to supporting the transition to a lower carbon future for the extraction industry, a sector on the cusp of a green revolution as it embraces technology and innovation.
CoTec is a publicly traded investment issuer listed on the Toronto Venture Stock Exchange and trades under the symbol CTH.V
For further information, please visit www.cotec.ca or contact Braam Jonker - (604) 992-5600.
Please join CoTec CEO, Julian Treger, and IZ CEO, Mark Pearlman on Friday, November 25, 2022 at 8:00AM PST for further information on this exciting investment opportunity. Click this link https://my.6ix.com/aIx5t8G4 to register for the event.
Forward-Looking Information
Statements in this press release regarding IZ, CoTec, their respective businesses, the Private Placement and related transactions which are not historical facts are "forward-looking statements" that involve risks and uncertainties, including statements relating to IZ's proposed commercialization of its NEREA®, the benefits and potential impact of NEREA®, the construction of IZ's proposed NEREA® production facility and completion and the anticipated benefits of the Private Placement. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. For further details regarding risks and uncertainties facing IZ please refer to its public disclosure documents, copies of which may be found under IZ's SEDAR profile at www.sedar.com. For further details regarding risks and uncertainties facing CoTec please refer to "Risk Factors" in CoTec's filing statement dated April 6, 2022, as well as its other public disclosure documents, copies of which may be found under CoTec's SEDAR profile at www.sedar.com.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
IZ:CA
The Conversation (0)
30 June
South Harz Potash Limited
Investor Insight
South Harz Potash (ASX:SHP) is an advanced-stage potash development company unlocking value from one of Europe’s most strategic fertilizer assets. Headquartered in Perth, Australia, the company is currently advancing a dual-asset acquisition strategy to complement and enhance the long-term value proposition of its wholly-owned South Harz Potash Project.
Overview
South Harz Potash (ASX:SHP) holds a high-potential critical minerals opportunity strategically located in central Europe. Due to its central location, the South Harz Potash Project is primely positioned to capitalise on long-term potash price upside via its direct access to European agricultural markets, electrified rail infrastructure, and existing brownfield underground access.
Europe is seeking to enhance critical mineral resilience amid tightening global potash supply chains. European MOP supply has declined over the past decade, while imports face growing geopolitical risk due to sanctions and restrictions on major exporters such as Belarus and Russia. South Harz Potash offers a potential reliable, low-carbon, and locally-sourced future potash supply to Western Europe’s agricultural centres.
South Harz Potash completed a Pre-Feasibility Study on Ohmgebirge in May 2024, which confirmed strong project economics and scalability. The company’s key potash assets are situated over perpetual mining licenses, underpinning sustained tenure security.
A disciplined capital allocation approach sees South Harz Potash exercising ‘strategic patience’ and aligning further advancement and development of Ohmgebirge with more favorable potash market dynamics. In the meantime, the company is carefully preserving and growing the long-term real option value that it holds from being a potential world-class future domestic potash supplier to Western Europe.
Company Highlights
- Advancing a Dual-Asset Strategy: Targeting acquisition of a second critical minerals project complementary to the company’s flagship Ohmgebirge Development, part of its broader South Harz Potash Project in Germany.
- Preservation and Growth of Long-Term Potash Option Value: Amidst current global and potash market volatility, the South Harz team is focussed on advancing its potash assets via non-dilutive funding sources such as German R&D tax rebates, ERMA funding, and ongoing engagement with financial and industry parties on potential strategic asset-level investment.
- Western Europe’s Largest Potash Resource: The South Harz Potash Project comprises a dominant 659 sq km land position in Germany’s South Harz Potash District, being three perpetual mining licences (including Ohmgebirge) and two exploration tenements.
- Perpetual Tenure: The South Harz mining licences are perpetual with no holding costs and no royalty obligations, ensuring maximum project flexibility and value retention.
- Long-Term Macro Tailwinds for Potash: Europe faces declining MOP supply and is increasingly reliant on imports amid geopolitical disruption in Belarus and Russia. South Harz Potash is primely positioned to deliver stable future supply of sustainable, low-carbon potash to European markets.
- Strong Project Viability: South Harz completed a Pre-Feasibility Study (PFS) in 2024 which confirmed Ohmgebirge as a world-class brownfield development with robust technical parameters and excellent economic returns.
The South Harz Opportunity: A Dual-Asset Strategy
South Harz Potash has a dual-asset strategy designed to drive long-term value growth complementary to its South Harz Potash Project.
#1 Acquire and Advance Second Critical Minerals Asset
Leveraging its existing corporate foundation and established presence in Europe and Australia, the company is targeting the strategic acquisition of new critical minerals assets that offer strong potential to drive shareholder value creation while potash markets progressively recover.
With global market conditions rapidly evolving, South Harz Potash holds the purpose and patience to explore new opportunities, backed by a steadfast and supportive major shareholder base.
#2 Preserve and Grow Long-Term Value in South Harz Potash Project
South Harz Potash’s flagship Ohmgebirge Development, part of its broader wholly-owned South Harz Potash Project, is centrally located in Germany’s historic South Harz mining district. It is associated with established regional infrastructure, offering valuable and highly differentiating brownfield development opportunity.
Ohmgebirge hosts a maiden Ore Reserve of 83.1 Mt at 12.6 percent potassium oxide (K₂O) and a total sylvinite Mineral Resource exceeding 286 Mt. The future development of Ohmgebirge benefits from access to over 60 percent renewable grid power, electrified rail to major European ports, and water recycling systems – supporting a low-impact, sustainable operation.
Ohmgebirge forms the foundation of South Harz’s potash strategy, with nearby licences – Ebeleben, Küllstedt, and Mühlhausen–Nohra – offering modular long-term expansion potential.
Management Team
Len Jubber – Executive Chairman
With over 30 years in the mining sector, Len Jubber has held leadership roles including managing director and CEO of Bannerman Resources, managing director/CEO of Perilya, and chief operating officer of OceanaGold. He began his career with Rio Tinto in Namibia and brings a wealth of technical, commercial, and entrepreneurial experience to the company.
Dr. Reinout Koopmans – Non-Executive Director
Dr. Reinout Koopmans brings 15 years of investment banking experience from London, having led global public equity raising for natural resource companies at Deutsche Bank and headed the European equity capital markets team at Jefferies International. He also served as a management consultant at McKinsey & Co in Germany and Southeast Asia. Koopmans holds a PhD and MSc from the London School of Economics and a degree from Erasmus University, Rotterdam.
Rory Luff – Non-Executive Director
Rory Luff is the founder of BW Equities, a specialist Melbourne-based equities advisory firm, with over 15 years of experience in the financial services industry. He has spent most of his career advising resource companies on capital raisings and financial market strategies.
Richard Pearce – Non-Executive Director
Richard Pearce has over 30+ years’ experience in the mineral industry across critical, industrial and energy minerals. His participation spans the full asset life cycle and value chains, and includes key roles held across board directorships, exploration and operations management, mining finance, M&A, business strategy and operational improvement. He has a proven business development and asset commercialisation track record.
Dr. Babette Winter – Regional Director and Managing Director of Südharz Kali GmbH
Dr. Babette Winter holds a PhD in chemistry and has extensive experience in politics, communication, public administration, environmental issues, and technology. She served for over five years as state secretary for Europe in Thuringia and held various leadership roles in environmental policy and public relations within German governmental bodies.
Graeme Smith – Company Secretary
Graeme Smith is an experienced finance professional with over 30 years in accounting, corporate governance, and company administration. He is a member of the Australian Society of Certified Practising Accountants, the Institute of Chartered Secretaries and Administrators, and the Governance Institute of Australia.
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