Pacific Potash Corporation Signs LOI for Western Potash's Brazilian Potash Assets

VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 06/13/12 -- Pacific Potash Corporation (TSX VENTURE: PP)(OTCQX: PPOTF)(FRANKFURT: P9P) ("Pacific Potash" or the "Company") is pleased to announce that it has signed an arms-length letter of intent ("LOI") with Moonraker Acquisition Corp. ("Moonraker") effective June 8, 2012, relating to an acquisition by Pacific Potash of all the issued and outstanding securities of Moonraker from the shareholders thereof (the "Transaction"). Moonraker holds an option to acquire Western Potash Corporation's (TSX: WPX) ("Western") Brazilian potash assets.

Potash Exploration in the Amazonas Basin (Brazil)

The property comprises several claim parcels (Figure 1, Western's Claims) that extend from the Amazon River to the centre of the Amazonas Basin, in the same area where Potassio do Brasil, Petrobras, and Vale, among others, are exploring for potash deposits. There has been a large amount of capital and investor interest in the Amazonas Basin area and Brazil recently.

Rio Verde announced in a news release dated May 25th, 2012, that they had set up a non-brokered private placement for aggregate gross proceeds of up to $15-million. The proceeds from the financing are planned to finance exploration and pre-feasibility studies at its Sergipe Potash Project, to continue exploration of its portfolio of phosphate prospects, for development of the Fosfatar Phosphate Project, and for working capital purposes.

In a news release dated May 31st, 2012 Potassio do Brasil announced that they had completed a US$58.66 million capital raising to further the exploration for potash at their Amazon Basin Project, which is adjacent to Petrobras' Fazendinha and Arari Potash deposits. Potassio do Brazil, which currently has contracts with two Brazilian drilling companies, has indicated that it will continue drilling until a potash resource of sufficient size to merit economic studies has been outlined. Once this is completed, a pre-feasibility study will be undertaken, which will be followed by a definitive feasibility study. It is the intention of Potassio do Brazil to raise between $300 to $500 Million for their IPO on BOVESPA (Brazilian Exchange) in Q1, 2013.

Two deposits owned by Petrobras-Arari and Fazendinha-are located 20 and 40 km west of the property being optioned by Pacific Potash. These two deposits have reported historic resources as follows(i):

Fazendinha - 520 Mt @ 28.8% KCl

Arari - 659 Mt @ 17.7% KCl

To view "Figure 1: Competitor License Map in Comparison to Joint Venture (WPX Claims)", please visit the following link: http://media3.marketwire.com/docs/pp-0613-fig1.pdf

Transaction Summary

The Transaction is expected to be effected by way of a share purchase agreement whereby the shareholders of Moonraker (the "Shareholders") will sell all of the issued and outstanding shares of Moonraker to Pacific Potash. Moonraker will become a wholly owned subsidiary of Pacific Potash. Under the terms of the Transaction, Pacific Potash will acquire all of the issued and outstanding shares of Moonraker from the Shareholders in consideration for the issuance of 4,975,000 common shares of Pacific Potash to the Shareholders.

The Transaction is subject to the prior approval of the TSX Venture Exchange and the Option is subject to the prior approval of the TSX.

The Transaction is an arm's-length transaction.

Terms of the Agreement

Moonraker has an option (the "Option") to acquire an 80% interest in Western's Brazilian potash portfolio, located within the Amazonas Potash Basin. In order to earn the 80% interest, Moonraker or Pacific Potash must make a cash payment of $100,000 on execution of the Option, which has been paid, and pay a further $150,000 and issue 500,000 common shares of Pacific Potash within 5 days after TSXV approval of the agreement with Pacific Potash. On or before the first anniversary of the agreement, Moonraker or Pacific Potash must pay an additional cash payment of $250,000, and issue a further 500,000 common shares of Pacific Potash. On or before the third anniversary of the agreement, Moonraker or Pacific Potash must issue a further 500,000 common shares of Pacific Potash.

The Option also calls for $2,000,000 in exploration expenditures over three years in order to earn the 80% interest. A minimum exploration expenditure of $300,000 per annum is required.

Once the cash payments, share issuance, and exploration commitments of the Option have been completed, an 80:20 Joint Venture will be formed with Pacific Potash paying 80% of costs going forward, and Western paying 20%. Western will also be granted back in rights to earn an additional 29% interest in the project by providing a bankable feasibility study. On closing it is anticipated that a member of the Western team will join the board of directors of Pacific Potash. The Company looks forward to welcoming a member of Western Potash's team to the board to share their wealth of knowledge and experience in the agricultural space with the Pacific Potash team.

About Pacific Potash Corporation

Pacific Potash trades on the TSX Venture Exchange under the symbol PP. The company is also listed on the Frankfurt Stock Exchange under the symbol P9P and on the OTCQX under the symbol PPOTF.

Pacific Potash is engaged in the exploration and development of the Provost Potash Property in Alberta, Canada that contains the prolific Prairie Evaporite Formation, which is host to multiple conventional and solution potash mines.

NI 43-101 Disclosure

Jody Dahrouge, P.Geol., a qualified person for the purposes of NI 43-101 supervised the preparation of the technical information in this news release.

(i) The resource estimates for Fazendinha and Arari potash deposits are historic in nature and are not considered National Instrument 43-101-compliant resource estimates. Resource estimates were disclosed by Redstone Resources (J. Orestes Santos, 2009). Although the resource estimates are relevant, they have not been verified. A qualified person has not done sufficient work to classify the historic estimates as current mineral resources. Pacific Potash is not treating the historic estimates as current mineral resources and therefore the historic estimates should not be relied upon.

On behalf of the Board,

Pacific Potash Corporation

Balbir Johal, LL.B, Director

Caution concerning forward-looking information

This press release contains "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws. This information and statements address future activities, events, plans, developments and projections. All statements, other than statements of historical fact, constitute forward-looking statements or forward-looking information. Such forward-looking information and statements are frequently identified by words such as "may", "will", "should", "anticipate", "plan", "expect", "believe", "estimate", "intend" and similar terminology, and reflect assumptions, estimates, opinions and analysis made by management of Pacific Potash in light of its experience, current conditions, expectations of future developments and other factors which it believes to be reasonable and relevant. Forward-looking information and statements involve known and unknown risks and uncertainties that may cause Pacific Potash's actual results, performance and achievements to differ materially from those expressed or implied by the forward-looking information and statements and accordingly, undue reliance should not be placed thereon.

Risks and uncertainties that may cause actual results to vary include but are not limited to the availability of financing; fluctuations in commodity prices; changes to and compliance with applicable laws and regulations, including environmental laws and obtaining requisite permits; political, economic and other risks; as well as other risks and uncertainties which are more fully described in our annual and quarterly Management's Discussion and Analysis and in other filings made by us with Canadian securities regulatory authorities and available at www.sedar.com. Pacific Potash disclaims any obligation to update or revise any forward-looking information or statements except as may be required by law.

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.

Contacts:

Pacific Potash Corporation

Balbir Johal, LL.B

Director

604-629-7083

604-629-7084 (FAX)


Pacific Potash Corporation

Richard L. Tremblay

CEO

604-629-7095 or Toll free: 1-855-629-7095
rtremblay@pacificpotash.com
www.pacificpotash.com