(the Company or Magna) Vancouver, B.C., is pleased to issue the following corporate commentary on the Companys prominent Green River Potash Project (the Project) in the renowned Paradox Basin, Utah, USA.
- The Project exhibits exceptionally compelling attributes that compare favorably with any other pre-development stage potash project around the world;
- The Project is reported to contain an estimated 600 million to 1 billion tonne Exploration Target* according to the Companys NI43-101 technical report;
- Seismic surveys demonstrate non-faulted lateral continuity of the potash Exploration Target*;
- The Company is fully permitted** to complete an aggressive 18-24 month exploration plan designed to produce a mineral resource estimate and preliminary economic assessment encompassing the extensive Exploration Target;
- In the immediate area there is an existing low capital and operational cost solar evaporation solution mining operation, Intrepid Potashs Moab facility;
- Many other strategic location advantages contribute critical and significant potential operational benefits;
- The potash market has stabilised with reports of increased sales and improved outlook; and
- Management and Insiders hold a majority vested interest in the Company.
Green River Potash Project
Management has a high level of confidence in the potential of the Green River Potash Project for the following reasons.
A respected international engineering firm estimated a 600 million to 1 billion tonne Exploration Target grading between 19 and 29% eKCl* underlying the Project. This was accomplished through modeling of 33 regional historic oil and gas wells to determine the average grade, thickness and mineralogy in conjunction with Project-wide seismic surveys that demonstrate the non-faulted strong lateral continuity of the targeted potash horizon.
In the immediate area there is an existing, successful and longstanding potash solar evaporation solution mining operation, the Moab facility currently owned by Intrepid Potash. Magna holds over 5 times Intrepids neighbouring project area and is targeting the exact same potash horizon that has supported solution mining at that operation for over 40 years.
Highlighting managements capabilities to execute and advance a project was the recently announced approval of the Companys Exploration Plan and granting of Federal Potash Prospecting Permits (Permits)**, only the second set of Permits to be conferred in the region in the last 25 years.
The Companys execution of the Exploration Plan will involve significant activity over the next 18-24 months. This activity will comprise the drilling of eight holes with the objective to delineate and upgrade the 600 million 1 billion tonne Exploration Target into a mineral resource estimate and to subsequently produce a preliminary economic assessment. The project advancement through this period is anticipated to significantly impact the Companys and Projects valuation.
The Company also continues to stress the numerous strategic location advantages that will assist the potential development of an operation in this area:
1.) The arid climate with 300 days of sunshine a year supports solar evaporation ponds for mineral concentration and separation; a low capital expenditure, low operating cost method of processing. In addition, the utilization of solution mining teamed with evaporation ponds is a highly scalable operation through the ramp-up period, thus beneficially spreading the low total capital expenditure over a multi-year period;
2.) The Project area is proximal to the main U.S. agricultural market providing a clear transportation advantage that traditionally translates into a significantly higher realized sales price over more distal and international competition;
3.) The U.S. is a major global scale importer of potash (i.e. the US imported 85% of their potash requirements in 2012) that represents a pronounced imbalance and supply opportunity in a large and consistent local-demand market;
4.) The Project area hosts excellent infrastructure and access (proximal to townsite, rail, highway, power and water);
5.) The flat terrain provides ample space for development planning of solar evaporation ponds, plant and operations;
6.) Solar evaporation solution mining operations have low environmental impact; and
7.) Solution mining operations utilize simple, straightforward and well known technology.
Following the past nine months of weak guidance in the potash sector, there is now the general consensus of an identified bottom, restored stability, increasing sales volumes and a positive outlook.
This situation provides a potential rare opportunity for investors willing to take advantage of a previously depressed market now expressing tangible indications of a substantial rebound and definite market lead-indicator gains in the major potash producers over the last couple of months.
Over the next 18-24 months, Magna is planning one of the most exciting periods for the Company, which is the delineation drill program towards an initial mineral resource estimate. In addition, there are very few potash companies entering a similar accretionary stage in their valuation thereby uniquely positioning Magna as a potential standout in the field.
So the potential exists to realize two benefits, namely the forecast improvement in the Potash Sector and the simultaneous advancement of Magnas Green River Potash Project. Both factors, when combined, make for one compelling opportunity.
For additional details regarding the Company and the Green River Potash Project please visit the Companys website at www.americanpotashcorp.com.
* Refer to the Companys technical report entitled, NI 43-101 Technical Report on the Green River Potash Project, Grand County, Utah, USA, dated October 10, 2012 with an effective date of June 27, 2012, filed on SEDAR that classifies the potash Cycle 5 horizon as a NI 43-101 exploration target. It should be noted that Exploration Targets are conceptual in nature and there has been insufficient exploration to define them as Mineral Resources, and, while reasonable potential may exist, it is uncertain whether further exploration will result in the determination of a Mineral Resource under NI 43-101. The Exploration Target stated in the Report is not being reported as part of any Mineral Resource or Mineral Reserve.
The Report was prepared by Vanessa Santos, Chief Geologist with Agapito Associates Inc. and a Licensed Professional Geologist in the State of South Carolina and Georgia, and Leo J. Gilbride, Vice President with Agapito Associates Inc. and a licensed Professional Engineer in the State of Colorado, each of which are Registered Members of the Society for Mining, Metallurgy, and Exploration and qualified persons as defined by and independent of the Company for the purposes of National Instrument 43-101; and have reviewed the related scientific and technical information presented in this press release.
The prefix e in eKCl indicates that the grade was estimated utilizing the response from the gamma ray log surveys and was not measured from chemical analysis of the core.
** The U.S. Bureau of Land Management granted to the Company 14 Federal Potash Prospecting Permits (Permits), effective as of March 01, 2014, that enables the Company to initiate and complete an approved Exploration Plan consisting of four drill holes on Federal land and four drill holes on Utah State land in order to satisfactorily characterize and quantify the Cycle 5 potash horizon underlying most to all of approximately 35, 000 acres (14, 150 hectares) of the northern portion of the Project area in preparation of applying for preferential mining leases.
About the Company
Magna Resources Ltd. is dedicated to the acquisition and development of potash mineral deposits in the USA and elsewhere. The Company, through a wholly owned subsidiary, American Potash LLC, a Nevada limited liability corporation, holds 11 State potash leases, 2 Federal Potash Prospecting Permits and an option to acquire 100% interest in 12 Federal potash Prospecting Permits and 11 federal Potash Prospecting Permit applications in the State of Utah comprising 20, 620 hectares (50, 950 acres) that constitute the Green River Potash Project, host to a significant potash Exploration Target.
On behalf of the Board of Directors“Mike Sieb” Mike Sieb, President Rudy De Jonge Rudy De Jonge, CEO
Neither the OTCQX nor the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.
Statements in this press release other than purely historical information, including statements relating to the Companys future plans and objectives or expected results, are “Forward-Looking Statements” within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended and Canadian securities laws. Forward Looking Statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Companys business, including risks inherent in resource exploration and development. As a result, actual results may vary materially from those described in the Forward Looking Statements.
Key assumptions upon which the Companys forward-looking statements and information are based include: the price of potash will rise and not fall significantly; the Companys ability to secure new financing to continue its exploration and development activities; there being no significant changes in the ability of the Company to comply with environmental, safety and other regulatory requirements; the Companys ability to obtain regulatory approvals in a timely manner; and the Companys ability to achieve its growth strategy. These assumptions should be considered carefully by readers. Readers are further cautioned that the foregoing list of assumptions is not exhaustive. Although the Company believes that the assumptions on which the forward-looking statements or information are made are reasonable, based on the information available to the Company on the date such statements were made, no assurances can be given as to whether these assumptions will prove to be correct.