. Magna Resources Ltd. is pleased to announce that Passport Potash Inc. (Passport) (PPI: TSX.V) has signed a Mineral Property Option Agreement (the Agreement) with Sweetwater River Resources LLC (Sweetwater) and American Potash LLC (American Potash), a limited liability corporation incorporated in Nevada and owned 50% by Magna Resources Ltd. and 50% by Confederation Minerals Ltd. (CFM: TSX.V), to acquire the rights to five exploration permits. The five permits consist of Arizona State Land Department exploration permits covering more than 3, 200 acres that are wholly-owned by Sweetwater. Sweetwater is a Wyoming private company. The Agreement is subject to Exchange approval.
The agreement gives Passport the right to acquire a 100% interest in the permits in exchange for Passport issuing 500, 000 shares by December 15, 2010, paying CDN $90, 000 in three installments of CDN $30, 000 each at 12 months, 18 months and 24 months from the date of signing the agreement and meeting the exploration expenditures as required by the Arizona State Land Department.
Exploration expenditures on the permits will be paid for by Passport on a 100% basis. Under the agreement, Passport will be subject to a 2% NSR royalty, with Passport retaining the option to purchase the royalty at the price of US $150, 000 per 1% or US $300, 000 for 2%.
The allocation of the shares and the payments to Sweetwater and American Potash will be according to each of their respective percentage of the total expenses incurred by both of them on the Arizona Permits.
On behalf of MAGNA RESOURCES LTD.
“Rudy de Jonge ”
Rudy de Jonge
This press release contains forward-looking information regarding managements anticipated completion of the proposed private placement financing and its anticipated use of the proceeds. The forward-looking information contained in this press release is made based on expectations of management as of the date of this press release and, except as required by applicable law, Magna does not undertake any obligation to update publicly or to revise any of the included forward-looking information, whether as a result of new information, future events or otherwise. By its very nature, such forward-looking information requires Magna to make assumptions that may not materialize or that may not be accurate. This forward-looking information is subject to known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such information. There is no assurance that Magna will be able to raise some or all of the proposed private placement financing.
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