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Ceres Global Ag Corp. Announces Strategic Sourcing Relationship With Briess Industries Inc.


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Ceres Global Ag Corp. (CRP.TO) announced a strategic sourcing relationship between its 100% owned subsidiary, Riverland Ag Corp., and Briess Industries Inc.

Under the strategic sourcing relationship, Briess Industries will acquire the Ralston elevator facility including the Powell, Wyoming seed plant for US$12.4 million. Riverland Ag will manage the facility on behalf of Briess Industries for a minimum of three years. The majority of the facility's barley shipments will be to Briess Industries, with the balance being sold to the facility's other existing customers. Riverland Ag will receive a monthly management fee and a contingency payment of between $1.125 million and $1.5 million in 2016 subject to certain contracted barley targets being met. Processing of sales to the facility's other customers will be to the account of Riverland Ag. Briess will assume the majority of the working capital obligations of the facility going forward, and will continue to be an important customer of Riverland Ag's U.S. Upper Midwest facilities. Ceres will recognize a gain on the sale of the two facilities in the fourth quarter. Closing of the transaction is expected on or before March 15, 2013

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