Toronto-based investment firm Sprott Resource Corp. is increasing its holdings in subsidiary One Earth Farms to 80 percent from its current level of 66.7 percent.
Sprott is exercising 30 million One Earth Farms warrants at $1 per common share, a total value of $30 million.
As a result, Sprott will have invested $57.5 million into One Earth Farms, a large corporate grain and cattle farm operating in partnership with First Nations groups in the prairie provinces.
Kevin Bambrough, president and chief executive officer of Sprott, described One Earth as a unique business that will command a high valuation as concern over food security and quality continues to grow.
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“In less than two years, (One Earth Farms) has secured strategic relationships with key input suppliers and is in the process of developing equally strong relationships with food retailers, working towards the development of branded products, particularly natural beef,” he said in a news release.
One Earth did not respond to interview requests.
The company’s plan for 2011 includes:
• lease and seed 150,000 acres of cultivated farmland;
• lease about 100,000 acres of pasture land and increase the size of the company’s cattle herd to roughly 22,000 head;
• take on additional equity and debt to achieve the required $65 million in incremental capital to finance the plan.
One Earth Farms president and chief executive officer Larry Ruud said in a news release his company’s goal is to generate healthy profits using economies of scale and operating efficiencies.
Earlier this fall, One Earth announced it had entered into a partnership with the Inroads to Agriculture Institute, a non-profit organization dedicated to providing agricultural training to aboriginals so they can work for One Earth and other agricultural employers.
The governments of Canada and Saskatchewan, One Earth Farms and other industry partners are contributing $5.1 million to the program.
The Inroads program expects to create at least 104 long-term jobs in Saskatchewan and Alberta’s agriculture industries.
