Vulcan Minerals Inc.
TSX VENTURE : VUL

Vulcan Minerals Inc.

August 09, 2011 13:03 ET

Vulcan Minerals to Spinout Red Moon Potash Inc.

ST. JOHN'S, NEWFOUNDLAND AND LABRADOR--(Marketwire - Aug. 9, 2011) - Vulcan Minerals Inc. (the "Company")(TSX VENTURE:VUL) is pleased to announce that the annual and special meeting of shareholders will take place on Wednesday, August 31, 2011 in St. John's, Newfoundland at which time a special resolution will be voted upon to spinout certain of the Company's mineral property assets into a new corporation pursuant to a plan of arrangement. The details of the plan of arrangement are contained in the management information circular and meeting materials currently being mailed to shareholders of record. Under the arrangement, the Company proposes to transfer certain mineral property assets in western Newfoundland with specific prospectivity for potash and salt to a new subsidiary corporation, Red Moon Potash Inc. ("Red Moon"). Shareholders of the Company will receive one Red Moon share for every 3.812 shares of the Company they own on the relevant distribution record date which will be determined and announced upon acquisition of the required approvals of the plan of arrangement. Upon completion of the transaction and prior to any financing, Red Moon will have 20,500,000 common shares outstanding of which Vulcan will own 5,500,000 shares and Vulcan shareholders will receive the balance of the Red Moon shares (15,000,000) by way of a distribution. The board of directors and management of Vulcan have accepted similar roles and responsibilities in Red Moon. It is the intention of Red Moon to apply for a listing on the TSX Venture Exchange concurrent with a private placement to obtain the working capital necessary to carry out its exploration program.

A National Instrument 43-101 compliant report entitled "Bay St. George, Newfoundland and Labrador, Salt and Potash Resource Assessment" by Hy-Grade Geoscience Ltd. has been prepared for the Company and will be filed on www.sedar.com. It provides an independent assessment of the salt and potash prospectivity of the Company's mineral rights in the Bay St. George area. It does not calculate any mineral resource or reserves as the property is at an early exploration stage. However, given the potash and salt discovery made by the Company in the Captain Cook area and the historical salt and potash intersections in the basin, a staged exploration drilling program and budget up to $6,000,000.00 is recommended.

The Bay St. George basin in western Newfoundland is part of the regional Maritimes basin which contains the Potash Corporation of Saskatchewan's (PCS) potash and salt mine (in operation since 1983) near Sussex New Brunswick. PCS is currently expanding its mine capacity to 2,000,000 tonnes of potash per year. The Company has discovered a potash intersection in the Captain Cook area of the Bay St. George basin with varying potassium oxide grades (K20) up to 20.40% over a 5 metre gross interval at a depth of 287 metres. This discovery has not been delineated and will be the primary focus of Red Moon's exploration strategy. Access to infrastructure is excellent. Two deepwater ports are available within 6 kilometres and 20 kilometres respectively. An airport is located within 20 kilometres and theTrans Canada Highway and high voltage power grids cross the property. The transactions contemplated herein are subject to final approvals by the TSX Venture Exchange.

Vulcan is a diversified junior exploration company focused on petroleum exploration in the under-explored Bay St. George basin in western Newfoundland and also holds mineral interests in areas strategic to its operations in Newfoundland and Labrador.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. The statements made in this News Release may contain certain forward-looking statements. Actual events or results may differ from the Company's expectations. Certain risk factors may also affect the actual results achieved by the Company.

There can be no assurance that forward-looking information will prove to be accurate. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from any conclusions, forecasts or projections described in the forward-looking information. Accordingly, readers are advised not to place undue reliance on forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new information, future events or otherwise.

Shares Issued: 57,176,129

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