American Potash LLC, a corporate joint venture owned equally by Confederation Minerals Ltd. and Magna Resources Ltd. announced the signing of a Memorandum of Understanding ("MOU") between American Potash LLC and the Utah State Office of the United States Bureau of Land Management ("BLM") for the purpose of facilitating exploration activities on Federal land containing potash rights applied for or owned by American Potash LLC.

The MOU is a significant milestone for American Potash LLC in its efforts to move forward on the exploration of its Federal potash applications and State potash leases in Utah. American Potash LLC has over 63,000 acres of Federal Potash Prospecting Permit Applications ("PPAs") and over 6,000 acres of State potash leases in the Paradox Basin in southeast Utah. These areas are believed to host significant amounts of potash based upon gamma log geophysical surveys of historical oil and gas drilling and reports prepared by R.J. Hite for the US Geological Survey.

The PPAs were filed with the BLM on June 26, 2008, by Sweetwater River Resources. In 2009, American Potash LLC purchased the rights to these PPAs and has been working with the BLM in Utah to advance plans for potash exploration on lands outside the BLM proposed "10-Mile Known Potash Leasing Area" ("KPLA"). The "10-Mile KPLA" has yet to be officially designated by BLM and would be an expansion of an existing KPLA. The MOU includes PPA's on approximately 39,000 acres while the PPA's on the remaining 24,000 acres are within the proposed KPLA expansion and are not covered by the MOU.

The proposed KPLA boundaries are under review by the BLM and once it is finalized, the BLM would offer lands within the KPLA in a competitive lease sale that will not affect the lands subject to the MOU. The objective of the MOU for American Potash LLC is to gain timely approval of the PPA's in order to conduct potash exploration outside the proposed "10-Mile KPLA". The objective of the MOU for the BLM is to separate approval of exploration from leasing and firmly establish the proper scope of environmental analysis required to consider approval of the PPAs.

Under the terms of this MOU, the BLM acknowledges that once exploration is underway and environmental studies necessary to authorize leasing and development are completed, a decision by the BLM on leasing lands outside of the KPLA will be made in a timely manner. Should the BLM determine that leasing of potash lands for development is appropriate within the area of the American Potash LLC PPA's, the decision will be to issue preference rights leases to American Potash LLC. Any decision to grant preference rights leases to American Potash LLC will be subject to environmental standards developed through the NEPA process and economic and workability requirements.

Should the BLM ultimately decide not to lease these lands, the MOU does not preclude or diminish the rights of American Potash LLC to pursue administrative rights to seek a decision favourable to its position.

Dr. Lawrence Dick, CEO of Confederation Minerals Ltd., stated, "The MOU is a significant step forward for American Potash LLC and by extension, Confederation Minerals and Magna Resources."