The company has negotiated to sell up to 31.25 million units at a price of 48 cents each.
Every unit will be made up of one comon share and one share purchase warrant, with each warrant good for one additional share at a price of 58 cents within three years of closing.
Western Potash said the new funds would be used to complete a feasibility study for its Milestone potash project in Saskatchewan, for environmental and permitting expenses, as well as for general working capital.
Earlier this month, Western Potash said that it was talking about a joint venture with India's Rashtriya Chemicals and Fertilizers among others, Reuters reported.
The junior potash company plans to build the Milestone mine southeast of Regina, Saskatchewan by 2016 and eventually produce 2.8 million tonnes of potash, a key soil nutrient for growing crops.
Western Potash hopes to strike a deal with an investor on buying a stake in the company or taking it over by the end of 2012, with a feasibility study on Milestone due in late November.
Rashtriya's chairman, R.G. Rajan, told Reuters that the state-run company is considering a possible $1 billion investment in Canadian potash mines to secure long-term supplies.
That level of investment could make it a junior partner in Western's project, which is estimated to cost $2.5 billion.
India is the world's number two buyer of potash, and its major suppliers include Potash Corporation of Saskatchewan (TSE:POT),Mosaic Co. (NYSE:MOS), and Agrium (TSE:AGU)(NYSE:AGU). The country meets its entire potash requirement through imports.
Western Potash recently submitted an environmental impact statement to the Saskatchewan government about the Milestone project. Following a technical review by regulatory agencies, the report will be available for public review and will be available on the company's website - expected sometime in the fourth quarter.
The environmental report details features designed to minimize the potential impacts of the project to the environment, while "optimizing social and economic benefits" to the local and regional communities.
Under NI 43-101 guidelines, the Milestone project holds 66.6 million tonnes of measured recoverable resource, 186.9 million tonnes of indicated recoverable resource and 708.2 million tonnes of inferred recoverable resource.