Magna Resources Ltd. and Confederation Minerals Ltd. Complete Purchase and Sale of American Potash LLC
– Magna Resources Ltd. (CNSX:MNA) and Confederation Minerals Ltd. (TSX-V: CFM) (www.confederationmineralsltd.com) are pleased to announce that they have completed the previously announced acquisition by Magna of Confederations 50% interest in American Potash LLC (American Potash).
At closing, Confederation transferred to Magna its interest in American Potash in exchange for 22, 420, 000 common shares and 2, 400, 000 common share purchase warrants. Each warrant entitles Confederation to purchase a further common share at a price of $0.10 until February 25, 2016. Concurrent with the transfer, Confederation subscribed for 6, 666, 666 common shares of Magna at $0.30 per Share for gross proceeds to Magna of $2, 000, 000. As a result of the transaction, Magna now holds a 100% membership interest in American Potash LLC., which holds certain potash leases and an option in respect of certain potash lease applications in the State of Utah. With the share and warrant issuances on closing, Magna now has an aggregate of 51, 506, 666 common shares and 4, 800, 000 common share purchase warrants exercisable at $0.10 per share issued and outstanding (on a non-diluted basis), of which 56.47% of the shares and 50% of the warrants are held by Confederation. Rudy De Jonge, President of Magna, stated This acquisition consolidates 100% ownership of our very exciting potash prospects into Magna Resources allowing for more focussed management and easier funding which will benefit all shareholders. I believe we have the most advantageous land position in the Paradox basin, the largest known Potash basin in America. This consolidation of ownership is also very timely because we expect shortly to have satisfied all requirements necessary to begin drilling our first test hole.
Lawrence Dick PhD., P. Geo., President of Confederation, stated: the Magna transaction is a win-win situation. Transferring all of American Potash to Magna Resources, which is now 56.47% owned by Confederation, allows our company to focus on our Newman-Todd gold exploration project, in the prolific Red Lake gold camp, while maintaining our major position in the highly-prospective potash holdings in Utah, for which we have exceedingly high expectations. The potash prospect will be taken forward under the care of a geological team with experience in the potash field, and will allow Confederation to give this project the geological attention it deserves.
All securities issued by Magna at closing are subject to a four month hold period expiring May 20, 2012.
Magna is also pleased to announce that American Potash LLC has submitted Potassium Prospecting Applications in respect of an additional 2253.95 acres of BLM land contiguous to its existing applications in Utah.
On Behalf of the Board,
Confederation Minerals Ltd.
Lawrence A. Dick, Ph.D., P.Geo
President, CEO, and Director
On behalf of MAGNA RESOURCES LTD.
“Rudy de Jonge ”
Rudy de Jonge
Magna Resources Ltd.
Rudy de Jonge
CEO and President
Confederation Minerals Ltd.
Suite 1980, 1075West Georgia Street
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.
THE CNSX HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ACCURACY OR ADEQUACY OF THIS RELEASE.