SASKATOON, SK, July 16 /CNW/ - Athabasca Potash Inc. ("API" or the "Company") (TSX:API) today provided an update on its discussions with third parties regarding a potential strategic alliance to develop the Company's Burr Project in Saskatchewan as a low cost conventional potash mine. These discussions were first described in the Company's March 30, 2009 press release, and progress was updated in API's 2009 Q1 MD & A and May 15, 2009 press release.

The Company has established a Special Committee consisting of Messrs. John King Burns (Chair), Leo Bingleman, CA and Ms. Dawn Zhou. The Special Committee will consider and evaluate proposals resulting from these discussions.

The Company has retained CIBC World Markets and Genuity Capital Markets as financial advisors in connection with these discussions.

To date the Company has broadly solicited expressions of interest from qualified third parties in respect of a strategic alliance to develop the Burr Project and has held in-depth discussions and meetings with many of these parties to advance a possible alliance. API has executed confidentiality agreements with a number of these parties and provided them with access to an extensive electronic data room and the opportunity to conduct a thorough due diligence process on the Burr Project.

In response to initial indications of interest received from these parties, the Company has expanded the scope of transactions it is considering from joint ventures and other forms of direct participation in the development and financing of the Burr Project to include potential mergers or potential acquisitions of all or a portion of the Company or its business.

API will carefully consider its discussions with various parties and the Board of Directors will make its recommendations to shareholders in due course upon receipt of a binding offer.

"We are committed to delivering value to our shareholders in the most efficient way possible," said John King Burns, Special Committee Chairman. "With the definition of a measured and indicated mineral resource of 425 million tonnes at the Burr Project and the advancement of work on our upcoming pre-feasibility study, API believes it is well-positioned to actively seek out a strategic alliance with an established, global industry player to support development of the Burr Project. During our efforts to advance an alliance, however, it also became clear that we might need to consider a broader range of transactional structures that were being presented to us and which might provide value to our shareholders."

"API has a number of potential opportunities arising during its search for a potential strategic alliance which need to be advanced. I am fully committed to working in the best interest of API and its shareholders," said Ms.