Magna Resources Ltd. Announces Joint Venture with Confederation Minerals Ltd. and Option of US Potash Prospects
Rudy de Jonge, President of Magna ResourcesLtd.(Magna) (CNSX: MNA), is pleased to report that American Potash LLC (American Potash), a Nevada limited liability corporation owned 50% by each of Magna and Confederation Minerals Ltd. (“Confederation”) (TSX-V: CFM), has entered into an option agreement with Sweetwater River Resources LLC, John Glasscock and Kent Ausburn (together, the Optionors) to acquire pending applications to the United States Bureau of Land Management and the State of Arizona for exploration permits (the Permits), together with all permits and other rights issued pursuant to the applications, to allow the exploration of certain potash prospects located in Utah and Arizona.
The option agreement entitles American Potash to acquire a 100% interest in the Permits, subject to a 2% royalty to the Optionors which may be bought back for $2, 000, 000(US). The option may be exercised by Magna and Confederation each paying a total of $135, 000(US) and each issuing in aggregate 1, 000, 000 shares to the Optionors, as follows: $35, 000(US) on signing of the option agreement; 100, 000 shares upon grant of the Permits representing not less than 25, 000 acres; $25, 000(US) cash and 300, 000 shares on or before the first, second and third anniversaries of the grant of the Permits; and a final $25, 000(US) cash on or before the fourth anniversary.
The Utah prospects consist of 31 US-BLM (US Bureau of Land Management) potash exploration permit applications covering approximately 63, 000 acres (25, 500 hectares) of USBLM federal land in southeast Utah, USA. The potash prospects are located approximately 30 miles (48km) west of Moab, Utah and 20 miles (32km) from Intrepid Resources Cane Creek solution potash mine.
BLM potash exploration permits when granted will provide American Potash with exclusive rights to explore potash deposits within the permit areas. The application area is located in the large (laterally extensive and deep) Pennsylvanian-age (~300-million years old) Paradox Sedimentary Basin, which extends from southeast Utah into northwest Colorado. There are 10 known potash salt (KCI) layers (cycles) in the Paradox Sedimentary Basin. The most important documented potash salt cycle of interest beneath the Utah prospects is potash salt cycle 13, although cycle 5 and probably cycle 9 are likely potash-bearing in this location as well.
On behalf of MAGNA RESOURCES LTD.
Per: “Rudy de Jonge “Rudy de Jonge
President and Chief Executive Officer
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