Toronto-MagMinerals Potash Corp. (Mag) has agreed to acquire the Congolese company Potasse du Congo (PdC) through an arms-length transaction. The company said the deal re-establishes and extends MagMinerals’ position as the largest mineral permit holder in the potash-rich Kouilou region of the Republic of Congo, ensuring that Mag will control future potash developments within the permit areas. Mag is currently in discussions with third parties interested in joint participation exploration activities on the exploration permit areas gained through the PdC acquisition. Prior to the deal, in compliance with provisions of the Republic of Congo Mining Code, Mag’s land holdings had been reduced to a 100 percent interest in the 136 square kilometer Mengo Exploitation Permit. Mag says this mining license, together with the potash investment agreement signed with the Government of the Republic of Congo in late 2008, gives Mag the full authority to construct, commission, and operate a potash mine near the village of Mengo for 25 years, plus options for extension. PdC holds three mineral exploration licenses in the Kouilou region surrounding the Mengo Exploitation Permit. PdC’s licenses total 2056 square kilometers, which surround the Mengo Exploitation Permit and include the former underground potash mine at Holle. The shares of PdC were purchased for a consideration of US$500,000; the vendor retains a royalty interest in the exploration permits, the value of which is capped at US$9.5million. Mag has agreed to reduce this royalty interest from 10 percent to 6 percent by the payment of US$3.5 million.
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