Spokane, Wash.-Marifil Mines Ltd. has announced that it has signed a letter of intent to vend the company’s K-2 potash property to Oxbow Holdings Corp., a new, private Canadian corporation. The K-2 property comprises 99,964 hectares in the company’s recently acquired, 100 percent owned, property in the Neuquén Basin, Argentina. Marifil says the analyses of gamma ray and electric logs from four abandoned oil wells confirm the presence of potash in the property over an area of more than 200 square kilometers. Marifil says the property is highly accessible and can be worked year round. Under the terms of the agreement Marifil will receive 13,500,000 shares of Oxbow, representing 67.5 percent of the total issued shares of the company. The company will also receive anti-dilution rights enabling Marifil to retain a minimum fifty percent equity interest in Oxbow by participating in any private equity offerings for 12 months following the closing, or for up to 24 months for any public offerings. Marifil will also receive $750,000 in cash, payable as to $50,000 within five days of signing the letter of intent, $200,000 within 30 days after signing a definitive sales agreement on 18 August (the closing date), $250,000 within six months of the closing, and $250,000 within 12 months of the closing. In addition to the $750,000 payments described above, Marifil will also receive further payments of $150,000 annually, beginning on the second anniversary of the closing and continuing until the first milestone payment is made after which the annual payments will cease. Marifil will receive a further $10,000,000 in milestone payments as certain conditions are met. Marifil will retain a four percent royalty on sales of potash from the property. Oxbow agrees to spend a minimum of $1,000,000 on the property during the first 12 months of this agreement and $2,000,000 during the second 12 months of this agreement.
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