Company investing $27.5M in First Nations agriculture
By Cassandra Kyle and Joanne Paulson, The StarPhoenix.com March 26, 2009 1:15 PM Be the first to post a comment
SASKATOON — A major Canadian investment firm is putting millions of dollars behind a new First Nations-based agricultural corporate entity.
Sprott Resource Corp. (SRC) will invest $27.5 million to form One Earth Farms Corp., with the money directed toward establishing operations, funding working capital and supporting initial growth.
One Earth Farms Corp. will be a large-scale, fully-integrated farming business, with operations on world class First Nations farmlands in Alberta and Saskatchewan. At least 15 First Nations will be involved, farming over one million acres of land. The company will employ more than 250 full-time and part-time employees.
One Earth Farms intends to be involved, at least initially, in grain farming and cattle ranching.
“We believe that the opportunities associated with this new venture are unprecedented in the agricultural industry,” said Kevin Bambrough, president and CEO of SRC.
“We intend to build a long-term, profitable agriculture business in partnership with the First Nations which will improve the management and environmental sustainability of First Nations farmland, as well as benefit their people through increased revenue and job opportunities.”
Phil Fontaine, National Chief of the Assembly of First Nations (AFN), said the agreement with SRC is ushering in a new era for Canadian aboriginals.
“We’re tired of being poor,” Fontaine said at the announcement.
“We know there is no good reason for that in a country that is (incredibly) rich. We need to look elsewhere for support, understanding and commitment.”
The deal between First Nations and SRC is based on mutual respect, Fontaine said. The deal will provide new opportunities for First Nations youth across the country, he added.
“People always complain about us, that we should get off our butts . . . and create our own future, create our own lives. But every time we’ve tried to do that people have resisted,” he said. “The difference this time is we’re doing it with interest — Bay Street interest.”
To help with First Nations training for the new jobs that will come with the expansion of the company, One Earth has signed a memorandum of understanding with the Saskatchewan Indian Institute of Technologies (SIIT), the College of Agriculture and Bioresources at the University of Saskatchewan and the First Nations Agriculture Council of Saskatchewan to work towards the development of both technical and academically-focused training programs.
SRC, based in Toronto, invests in natural resource businesses. It is one of the companies to emerge from the Sprott group started by Eric Sprott, who is also board chair of SRC. Sprott is well-known in financial circles for his many financial companies, and his 35 years of experience in the investment industry. He is president and CEO of Sprott Inc., and portfolio manager for several Sprott equity funds.
SRC says One Earth Farms will be the largest, most efficient farm in Canada when fully into production. It plans to begin farming operations in a hub and spoke system, planting crops and ranching lands in annual increments. The first year of operations will see 50,000 acres go into production, the company said.
Larry Ruud has been appointed president and CEO of One Earth Farms. Ruud has a long history in management and farming, as a management consultant and as director of Viterra Inc. He holds an M.Sc. in Agriculture Economics from the University of Alberta.
Blaine Favel, president and CEO of One Earth Resources Corp., has been appointed director of One Earth Farms and chairman of One Earth Farms GP Corp., the manager of the limited partnership through which First Nations’ land will be leased and farmed.
Favel is a former chief of the Federation of Saskatchewan Indian Nations (FSIN).
In a news release, SRC said it believes the timing for the venture is “opportune.”
“Global trends continue to impact food supplies, as arable land continues to decline, fresh water remains in short supply and various regions of the world are experiencing severe, recurring droughts,” said the company.
“In addition, the global credit crisis has impacted the financing available to farmers and will negatively impact crop production in the short term. These factors, combined with a global population that continues to rise, are creating food security issues and in turn fueling substantial farming investment demand globally.”
SRC trades on the Toronto Stock Exchange under the symbol SCP. Shares on the TSX rose more than 5.5 per cent to $2.85 in early trading Thursday.
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