TORONTO, ONTARIO--(Marketwire - Jan. 29, 2013) - Ethiopian Potash Corp. (the "Company" or "EPC") (TSX VENTURE:FED) announces that it has filed financial statements for the 2012 fiscal year and the related management's discussion and analysis ("MD&A").
The annual financial statements reflect an impairment loss of $42,537,168 for the year ended September 30, 2012 related to the Company's interest in the Danakil Project. Management determined that exploration and evaluation costs related to the Danakil Project had been impaired and that the asset be written-off for accounting purposes. This impairment results from the Company having insufficient funds to support its exploration programs to date and in the foreseeable future. A reversal of this impairment may be acceptable under IFRS accounting treatment only when the Company can demonstrate that the criteria for which the impairment loss originated has been remedied.
During the 2012 fiscal year, EPC was unable to pay the outstanding debt of G and B African Resources Ltd. ("G&B"), the owner of the Danakil Project, which debt was incurred on behalf of EPC under the Option Agreement, which provides EPC with the right to acquire G&B subject to the satisfaction of certain conditions precedent and milestone payments being made. G&B has advised EPC that it considers EPC to be in breach of the Option Agreement. However, EPC and G&B have been, and continue to be, working together to come to a solution to EPC's failure to meet its obligations under the Option Agreement.
EPC and G&B have been engaged in discussions and negotiations with potential strategic investors, which remain ongoing. However, there can be no assurance that any agreements with strategic investors will be entered into or that G&B will continue to work with EPC in the near future.
The annual financial statements and MD&A will be available on SEDAR at www.sedar.com.
About Ethiopian Potash Corp.
Ethiopian Potash Corp. (TSX VENTURE:FED) is a Canadian company based in Toronto, Ontario and Addis Ababa, Ethiopia.
On behalf of the Board of Directors
George Roach, CEO & Director
This press release may contain forward-looking statements based on assumptions, uncertainties and management's best estimates of future events. All statements that address future activities, events or developments that the Company believes, expects or anticipates will or may occur (including, but not limited to, EPC and G&B continuing to work together to achieve a solution to EPC's failure to meet its obligations under the Option Agreement and continued discussions and negotiations with potential strategic investors) are forward-looking information. Forward-looking information is based upon assumptions by management that are subject to known and unknown risks and uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information. Factors that may cause actual results to vary materially include, but are not limited to, the failure to reach agreements with potential strategic investors and G&B's determination not to continue to work with EPC in the future, and changes in general economic conditions or conditions in the financial markets. Such forward-looking information is based on a number of assumptions, including but not limited to, G&B will continue to cooperate with EPC in the near future and no significant decline in existing general business and economic conditions. Accordingly, readers should not place undue reliance on forward-looking information. The Company undertakes no obligations to update publicly or otherwise revise any forward-looking information, except as may be required by law. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, refer to the Company's filings with the Canadian securities regulators available on www.sedar.com.
Neither the 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.