VANCOUVER, BRITISH COLUMBIA (TSX VENTURE: MAN). The Company is
pleased to announce that it has entered into an option agreement
(the "Option Agreement") pursuant to which the Company has been
granted the option (the "Elkhorn Potash Option") to earn up to a
100% interest in an exploration permit application for the Elkhorn
Potash Project, located within southwest Manitoba. The application
encompasses 12 townships, along the Manitoba-Saskatchewan border
covering approximately 110,592 hectares (approximately 276,480
acres).
Mantra CEO, Raj Chowdhry, comments, "We are very pleased to
announce the acquisition of the Elkhorn Potash Project. The
existing infrastructure in the Elkhorn Project area, together with
the close proximity to major producers, such as Potash Corp.'s
Rocanville Mine, will allow Mantra the opportunity to create
shareholder value. This significant land package, located in a
premier Potash mining district, with significant corporations such
as Agrium Inc. and BHP Billiton as neighbours, affords Mantra
shareholders a project with large blue sky potential while demand
for Potash increases significantly worldwide."
The Permit Area
The Elkhorn Potash Permit is enclosed both to the north and
south by land/permits held by Western Potash Corporation.
Additional land/permit holders within a short distance to the north
of Elkhorn Potash Project include: Agrium Inc. (TSX and NYSE: AGU),
and Manitoba Potash Corp., which is held 51% by BHP Billiton and
49% by the government of Manitoba. BHP has previously announced $15
million exploration program for the Russell-Binscarth deposit held
by Manitoba Potash Corp. Further, immediately west of the border in
Saskatchewan, Potash Corp. of Saskatchewan recently announced a
$1.8 billion expansion at the Rocanville Mine, increasing the
capacity to about 5 million tonnes annually, to meet the growing
world demand for potash.
The Elkhorn Potash Project was acquired to cover potential
extensions of the potash-rich members of the Prairie Evaporite,
which has been mined, according to Davies et al (1962 p. 178), for
over 50 years in Saskatchewan.
According to Davies et al (Bannatyne, Barry and McCabe -1962),
"Beds rich in potash salts occur in the upper part of the Devonian
Prairie Evaporite in a narrow area along the west edge of the
province from township 4 through to township 21. The potash occurs
at depths ranging from 2,560 feet (780 m) in the north to 4,400
feet (1,241 m) in the south. S.A.M. Explorations Ltd. drilled the
northern part of the area from 1956 to 1958, and their 3 wells
indicated a potash bed 6 to 8 feet thick, grading 25% K2O or
better..."
Terms of the Option Agreement with the arm's length
Optionors
The Elkhorn Potash Option entitles the Company to earn the sole
and exclusive right and option to acquire up to an undivided 100%
right, title and interest in and to the Permits in accordance with
the terms of the Option Agreement as follows:
1) Make cash payments of $500,000 to the Optionors as
follows:
(a) $25,000 on the date of signing of the Option Agreement (the
"Effective Date) - Paid;
(b) $100,000 within 5 business days from the Effective Date;
and
(c) $125,000 within 30 business days of the acceptance of the
Option Agreement by the TSX Venture Exchange (the "Approval
Date").
A total of $225,000 of the aforementioned payments are
refundable in certain circumstances, such as if the Permits are not
granted within a fixed period of time.
Further, subject to the Optionors receiving valid Permits from
the Manitoba Permit Authority and the Optionee receiving acceptance
of the Option Agreement from the Exchange make the following cash
payments.
(d) $100,000 on or before 6 months after the Approval Date;
and
(e) $150,000 on or before 14 months after the Approval Date.
2) Issue 6,000,000 Shares (the "Total Shares") to the Optionors
subject to the Optionors receiving Permits from the Manitoba Permit
Authority on at least 120,000 acres (Total Shares to be pro-rated
down based on 120,000 acres in the event the Permits cover less
than 120,000 acres) and the Optionee receiving acceptance of this
Agreement from the Exchange:
(a) 1,200,000 Shares within 12 months of the Approval Date;
(b) 1,800,000 Shares within 24 months after the Approval Date;
and
(c) 3,000,000 Shares on or before 36 months after the Approval
Date.
In addition, in the event certain resource, drilling, market
capitalization and financing milestones are met by the Company,
then 50% of all unissued Shares making the Total Shares will be
issued immediately to the Optionors, subject only to the Exchange
Approval.
3) Incur the following aggregate cumulative Expenditures of not
less than $3,000,000 on the Permits as follows:
(a) $500,000 within 14 months of the later of the date the
Optionors receive valid Permits from the Manitoba Permit Authority
and the Approval Date;
(b) $1,500,000 within 24 months of the later of the date the
Optionors receive valid Permits from the Manitoba Permit Authority
and the Approval Date; and
(c) $3,000,000 within 36 months of the later of the date the
Optionors receive valid Permits from the Manitoba Permit Authority
and the Approval Date.
Finder's Fee
The Company, subject to TSX Approval and various other
conditions, has agreed to pay a finder's fee (the "Finder's Fee")
of 240,000 shares.
Potash Outlook
RBC Capital analyst Fai Lee in the Financial Post article dated
Jan 22, 2008, although focused on Potash Corp., points out the
strong demand for Potash from Southeast Asia as a major catalyst in
the continuing surge in prices paid for Potash. The article also
references historic lows in both customer and distributor warehouse
inventories.
Involvement in Potash, the major component in the fertilizer
arena, at a time when the world's growing population's need for
food is subject to continued growth, especially in China, India and
rest of Asia provides Mantra a unique and highly promising position
to create shareholder value.
ON BEHALF OF THE BOARD OF DIRECTORS
Raj I. Chowdhry, C.A., President & CEO
Cautionary Notice: This release may contain forward-looking
statements regarding the Company's business or financial condition.
Actual results could differ materially from those described in this
news release as a result of factors, including, but not limited to
the following: additional drilling, sampling and resource
valuations, engineering and construction timetables, financial
arrangements, developments in world resource markets, political
developments in Canada, the timing of regulatory and environmental
approval and other factors. With respect to additional exploration,
actual events may differ from current expectations of the Company
or its joint-venture partners and other factors. The Company
cautions that these and similar statements involve risk and
uncertainties and are qualified by important factors, including
competitive pressures, unfavorable changes in regulatory
structures, and general risks associated with business, which could
cause actual results to differ materially from those in the forward
looking statement. Forward-looking statements are made in the
context of information available as of the date stated. The Company
undertakes no obligations to update or revise such statements to
reflect new circumstances or unanticipated events as they
occur.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this news
release.
Contacts: Mantra Mining Inc. Kelsey Chin (604) 267-2788 Email:
kchin@futuracapitalltd.com
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