DGAP-News: Confederation Minerals Ltd. and Magna Resources Ltd. reorganize the ownership and financing of American Potash LLC
(firmenpresse) - DGAP-News: Confederation Minerals Ltd. / Key word(s): Transaction in
Own Shares
Confederation Minerals Ltd. and Magna Resources Ltd. reorganize the
ownership and financing of American Potash LLC
27.09.2011 / 14:38
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Confederation Minerals Ltd. (TSX-V: CFM) (Frankfurt: 070) and Magna
Resources Ltd. (CNSX:MNA) are pleased to announce agreement in principal
for a private placement of $2,000,000 by Confederation into Magna and the
sale of Confederation's 50% interest in American Potash LLC, a private
company, to Magna for shares (collectively the 'Transaction'). The
Transaction will increase Confederation's effective interest in American
Potash LLC. to over fifty six percent.
Prior to completion of the Transaction, Magna will complete a 2 for 1
subdivision (the 'Stock Split') of its outstanding common shares, resulting
in 22,420,000 common shares of Magna being issued and outstanding.
Thereafter, Confederation will subscribe for up to 6,666,666 Magna common
shares at $0.30 per share and transfer to Magna all shares of American
Potash owned by Confederation in exchange for an additional 22,420,000
common shares of Magna thereby receiving a total of 29,086,666 shares of
Magna (the 'Transaction Shares').
The number of shares to be issued to Confederation in exchange for its
stake in American Potash and the subscription price for the private
placement were determined by negotiation between the respective companies.
The directors of both companies believe the transaction to be fair and
reasonable since it consolidates the ownership of the American Potash
assets on substantially a par basis and provides funds to permit immediate
exploration of those assets.
Confederation will subsequently distribute the Transaction Shares to its
shareholders (the 'Spin-Out') at a date to be determined by the
Confederation board of directors in consultation with Magna. It is the
intention of all parties that the Spin-Out will be completed on a tax
deferred basis such that generally no taxable event will occur until a
Confederation shareholder disposes of the shares so received. It is
expected that the Transaction Shares will be first transferred to a newly
formed corporation ('Newco') in exchange for preferred shares of Newco
('Newco Preferreds'). It will also be necessary to complete a
reorganization of the shares of Confederation to provide each shareholder
of record with a preferred share ('Confederation Preferreds') that will be
transferred to Newco in exchange for common shares of Newco. Once such
transfer is completed, the Confederation Preferreds and the Newco
Preferreds will be redeemed leaving the Confederation shareholders as the
sole shareholders of Newco and Newco as the sole holder of the Transaction
Shares. The final step of the Spin Out will be the amalgamation (the
'Amalgamation') of Newco with Magna thereby cancelling the Transaction
Shares but providing the Confederation shareholders with a like number
shares in the amalgamated entity.
As part of the Transaction, Confederation will be entitled to nominate half
of the directors to the Magna board. Concurrent with the completion of the
Transaction, one of Magna's current directors will resign and the board
will appoint three individuals nominated by Confederation and acceptable to
Magna, acting reasonably.
The Transaction and the Spin Out is subject to the following conditions:
a) Negotiation and execution of a definitive purchase and sale agreement
reflecting the above terms;
b) All required regulatory approvals;
c) Approval of the Transaction, including the Stock Split, by special
resolution of Magna shareholders and, if determined by the Magna board to
be required, by a majority of Magna's disinterested shareholders;
d) Approval of the Spin Out by special resolution of the shareholders of
Confederation;
e) Approval of the Amalgamation of Newco and Magna by their respective
shareholders; and
f) Significant shareholders of Magna agree to pool those shares until the
Spin Out is completed.
Mr. Lawrence Dick, President of Confederation stated 'With the continuing
success of our exploration activities at our Newman Todd gold project in
Red Lake, Ontario, it makes sense to transfer our Potash interests to a
company dedicated to potash exploration. This will leave Confederation's
management to focus more intently on the accelerated development of Newman
Todd which we believe is the next major prospect to be developed in the Red
Lake gold camp. '
Rudy de Jonge also stated 'Currently potash is enjoying considerable demand
and investor attention. We are fortunate to have, in American Potash LLC,
an exciting prospect that consists of a considerable land package in a
productive potash area of the Paradox basin in Utah. With the consolidation
of the two interests in one company and the advantages of location and
solution mining, we expect to attract even more investor interest than
previously.'
On Behalf of the Board,
Confederation Minerals Ltd.
'Lawrence Dick'
Lawrence A.Dick, Ph.D., P.Geo
President, CEO, and Director
On Behalf of the Board,
Magna Resources Ltd.
'Rudy de Jonge'
Rudy de Jonge, President
CORPORATE INQUIRIES:
Confederation Minerals Ltd.
Suite 1980, 1075 West Georgia Street
Vancouver, B.C.
Leo Karabelas
+1-416-543-3120
leo(at)frontlineir.com
www.confederationmineralsltd.com
Magna Resources Ltd.
Rudy de Jonge
President
+1 (604) 782-4191
Forward-Looking Information
This release includes certain statements that may be deemed
'forward-looking statements'. All statements in this release, other than
statements of historical facts, that address events or developments that
the companies expect to occur, are forward-looking statements.
Forward-looking statements are statements that are not historical facts and
are generally, but not always, identified by the words 'expects', 'plans',
'anticipates', 'believes', 'intends', 'estimates', 'projects', 'potential'
and similar expressions, or that events or conditions 'will', 'would',
'may', 'could' or 'should' occur. Although the companies believe the
expectations expressed in such forward-looking statements are based on
reasonable assumptions, such statements are not guarantees of future
performance and actual results may differ materially from those in the
forward-looking statements. Factors that could cause the actual results to
differ materially from those in forward-looking statements include market
prices, exploitation and exploration successes, and continued availability
of capital and financing, and general economic, market or business
conditions. Investors are cautioned that any such statements are not
guarantees of future performance and actual results or developments may
differ materially from those projected in the forward-looking statements.
Forward-looking statements are based on the beliefs, estimates and opinions
of the companies' management on the date the statements are made. Except as
required by applicable securities laws, the companies undertake no
obligation to update these forward-looking statements in the event that
management's beliefs, estimates or opinions, or other factors, should
change.
End of Corporate News
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140476 27.09.2011
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Datum: 27.09.2011 - 14:38 Uhr
Sprache: Deutsch
News-ID 69621
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