* Yara to pay $39.8 million for 19.9 percent stake

* Yara to share output from new IC Potash mine (Adds details, analyst's comment)

TORONTO/OSLO, April 2 (Reuters) - Shares of Canada's IC Potash (ICP) rose 15 percent on Monday after it struck a deal struck to sell a 19.9 percent stake in the company to Norwegian fertilizer maker Yara for C$39.8 million ($39.9 million).

The deal, announced late on Friday, will result in Yara paying C$1.32 a share, a near 50 percent premium - for 30.1 million new shares in the Toronto-based potash exploration company. ICP's shares closed on Friday at 89 Canadian cents a share.

As part of the deal, Yara said it had also entered into an off-take arrangement for 30 percent of all products produced by ICP's Ochoa sulphate of potash mine in New Mexico for a period of 15 years, and discussed the possibility of establishing a jointly held entity for the purpose of marketing the project's product, which is a major fertilizer ingredient.

ICP expects the Ochoa mine to start production in late 2015.

"In our view, Yara's investment supports the attractiveness and production potential for ICP's sulphate of potash mine in New Mexico," said Laurentian Bank analyst Nelson Mah in a note to clients.

Mah, who reiterated his "speculative buy" rating on shares of ICP, noted that the deal bodes well for companies such as Western Potash. Vancouver-based Western Potash is developing the Milestone potash project in the Canadian province of Saskatchewan.

ICP said Yara makes an ideal partner as it is already one of the world's biggest fertilizer distributors.

"This partnership is transformational for ICP and provides the company with a significant injection of capital," said ICP Chief Executive Sidney Himmel, in a statement.

Upon the deal's closing, Yara will receive the right to appoint one representative to ICP's board and the right to participate pro rata in all future equity or equity-linked issuance by ICP. Yara, the world's largest producer of nitrogen-based nutrients, said it has no intention of increasing its stake in ICP at this time.

"Through the ownership in ICP, Yara gets an upstream exposure on potash which reduces and mitigates the financial impact of being structurally short on the nutrient," Yara's Chief Executive Joergen Haslestad said in a statement.

ICP plans to start commercial production of sulphate of potash - a non-chloride based potash fertilizer used mainly for cash crops and in horticultural applications - in late 2015, with estimated annual production of 700,000 tonnes.

"We made this deal primarily to get access to this important nutrient," Yara spokesman Espen Tuman told Reuters.

Shares of ICP rose 13 Canadian cents to C$1.02 in early trading on the Toronto Stock Exchange on Monday, while those of Western Potash rose 5 Canadian cents to C$1.17.