Mr. Foster Wilson reports
MESA SIGNS LETTER OF INTENT TO ACQUIRE POTASH PROJECT
Mesa Uranium Corp. has signed a letter of intent to acquire the Pine Valley potash project located in southwestern Utah. The project totals 5,227 acres consisting of state of Utah leases and federal potash prospecting permits.
The deposit has an in situ mineral inventory (non-NI 43-101 compliant) of 82.7 million tons averaging 35.5 per cent alunite (19.5 million tons indicated and 63.2 million tons inferred). This resource is historical in nature and was calculated using U.S. Bureau of Mines protocols which was the industry standard prior to NI 43-101 standards. Investors are cautioned not to use this information in making investment decisions.
The commercial products from alunite are potash, as sulphate of potassium, sulfuric acid and alumina. The resource could theoretically support an operation producing 104,000 tons of sulphaate of potassium, 200,000 tons of alumina and 184,000 tons of sulfuric acid per year for more than 25 years. The deposit is shallow and would be mined by low-cost surface mining methods. The area is accessed by well-maintained gravel roads, supports year-round work and is 15 miles from a main line siding of the Union Pacific Railroad.
Under the letter of intent, Mesa will acquire a 100-per-cent interest in the project by paying the owner $25,000 upon signing a definitive agreement, $25,000 and 800,000 Mesa shares on Jan. 1, 2011, thereafter payments of $10,000 annually. The owner will retain a 1-per-cent net smelter return royalty which Mesa has the option to purchase one-half for $500,000 (U.S.). Closing of the transaction is expected on or before Oct. 4, 2010. The transaction is subject to completion of final due diligence by Mesa, execution of a binding definitive agreement and regulatory approval.
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