McChip Resources Inc.
TSX VENTURE : MCS

September 17, 2008 11:34 ET

McChip Resources Announces Signing Potash Royalty Agreement

TORONTO, ONTARIO--(Marketwire - Sept. 17, 2008) - McChip Resources Inc. (TSX VENTURE:MCS) ("McChip or the "company") is pleased to announce signing of a lease agreement effective September 17, 2008, with Potash Corporation of Saskatchewan (PCS-T) ("PCS") granting PCS the right to mine potash from lands leased from the company in the Rocanville area of Saskatchewan.

Upon signing PCS is obligated to pay the company $250,000.00 including a non refundable option payment and fees for historical technical data provided to PCS by the company.

Under the terms of and upon execution of the lease agreement an additional advance of $100,000.00 shall be payable to McChip by PCS, after the execution of a unit agreement, each year thereafter until the year in which PCS reaches commercial production on the lands specified in the lease. These advance payments will be recouped by PCS from actual royalties due McChip. From the date of commercial production the company will earn a royalty on Potash Ore produced from the leased property, at a rate equivalent to the royalty rate payable to the Crown calculated on Potash Ore from time to time pursuant to the provision of the regulations provided under The Crown Minerals Act of the Province of Saskatchewan.

Richard McCloskey, President of the company said that "the extensive capital required to develop and mine potash combined with the discontinuous leases held by McChip would make it highly unlikely that the company would or could develop the property on its own. This agreement enables us to benefit financially from the long held leases without incurring additional capital risk."

Statements in this press release other than purely historical information, including statements relating to the Company's future plans and objectives or expected results, constitute forward looking statements. Forward looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the business of the Company, including risks inherent in resource development. As a result, actual results may vary materially from those described in the forward-looking statement.

THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.

Contact Information

  • McChip Resources Inc.
    Edward G. Dumond
    Secretary Treasurer
    (416) 364-2173
    (416) 364-0193 (FAX)