Confederation Minerals Ltd. and Magna Resources Ltd. reorganize the ownership and financing of American Potash LLC

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Confederation Minerals Ltd. and Magna Resources Ltd. reorganize the ownership and financing of American Potash LLC (via Thenewswire.ca) Confederation Minerals Ltd. (TSX-V: CFM) (www.confederationmineralltd.com) 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...

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