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CROPS proposes $6 million convertible debenture private placement

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World Fertilizer,

CROPS Inc. has proposed to complete, subject to stock exchange approval, a non-brokered private placement of convertible debentures to raise proceeds of up to $6 million.

CROPS is currently developing the Bayovar 12 phosphate deposit, which is located 40 km from the coast in the Sechura District of northern Peru. Bayovar 12 hosts a large resource of highly reactive sedimentary phosphate rock.

The debentures will have a three-year term and will be convertible, at the election of the holder, into common shares of the company at a rate of $0.08 per share (for an aggregate maximum of 75 million shares) if converted in the first year, or at a rate of $0.10 per share (for an aggregator maximum of 60 million shares) if converted in the second or third years. In addition to this, the company will also issue warrants entitling the debenture holders to purchase up to a total of 37.5 million common shares exercisable at a price of $0.08 per share for up to three years.

The debentures will bear interest, which is paid quarterly in cash at the annual rate of 8%. CROPS claims that it may, however, subject to stock exchange approval at the time, decide to pay the interest in common shares of the company, in which case the annual interest rate for the applicable payment will be 10% as opposed to 8%. The proceeds of the financing will reportedly be utilised to repay the currently outstanding loan held by Sprott Resource Lending Partnership in the principal amount of US$3 million, which currently bears interest at 12% compounded monthly, and for general working capital purposes.

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