default-logo
01
DEC
2011

Magna Resources Ltd. and Confederation Minerals Ltd. Sign Definitive Agreement for American Potash LLC

by :
comment : 0

Magna Resources Ltd. (CNSX:MNA) and Confederation Minerals Ltd. (TSX-V: CFM) (www.confederationmineralsltd.com) are pleased to announce that they have signed a definitive purchase agreement (“Purchase Agreement”) in respect of the previously announced acquisition by Magna of Confederation’s 50% interest in American Potash LLC (the “Transaction”).

Under the terms of the Purchase Agreement, Magna will complete a 2 for 1 subdivision (the “Stock Split”) of its outstanding common shares, resulting in 22, 420, 000 Magna common shares being issued and outstanding. Thereafter, Confederation will subscribe for 6, 666, 666 Magna common shares at $0.30 per share for gross proceeds to Magna of $2, 000, 000, and transfer to Magna all shares of American Potash owned by Confederation in exchange for an additional 22, 420, 000 common shares and 2, 400, 000 common share purchase warrants of Magna. Each warrant will entitle the holder thereof to purchase a Magna common share at a price of $0.10 until February 25, 2016.

Upon completion of the Transaction, Magna will have an aggregate of 51, 506, 666 common shares issued and outstanding (on a non-diluted basis), of which 56.47% will be held by Confederation, and American Potash will be a wholly-owned subsidiary of Magna. Magna will seek shareholder approval of the Share Split at its upcoming annual and special
general meeting to be held on December 19, 2011. A management information circular and proxy for the meeting was mailed to all Magna shareholders today.

Subject to any required regulatory approval, Confederation has agreed to provide interim financing to Magna, the proceeds of which will be used for the advancement of operations at the American Potash properties and for general working capital purposes. Such loans, if any, will bear no interest and will be repayable by Magna in full upon the earlier of (a) the termination of the Purchase Agreement (in which case Magna will have sixty (60) days to make such repayment); and (b) the date of the closing of the Private Placement.

Completion of the Transaction is subject to receipt of applicable regulatory approvals and other conditions disclosed in Magna’s September 27, 2011 press release. A copy of the
Purchase Agreement and the management information circular for the Magna shareholders’ meeting is available on the SEDAR website at www.sedar.com.

On Behalf of the Board,
Confederation Minerals Ltd.

“Lawrence Dick”

Lawrence A. Dick, Ph.D., P.Geo
President, CEO, and Director

On behalf of MAGNA RESOURCES LTD.

Rudy de Jonge

Rudy de Jonge
President, CEO

Magna Resources Ltd.
Rudy de Jonge
CEO and President
(604) 782-4191

CORPORATE INQUIRIES
Confederation Minerals Ltd.
Suite 1980, 1075West Georgia Street
Vancouver, B.C.
Leo Karabelas
1-416-543-3120
leo@frontlineir.com
www.confederationmineralsltd.com

This press release contains forward-looking information regarding management’s 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.

 

Download PDF Version