Feb 19, 2010 07:51 ET
MagIndustries Receives Government Environmental and Social Approval for Mengo Potash Plant Construction
TORONTO, ONTARIO--(Marketwire - Feb. 19, 2010) - MagIndustries Corp. ("Mag" or the "Company") (TSX:MAA) is pleased to announce that it has received final approval of its Environmental and Social Impact Assessment study ("ESIA") for the construction of its Mengo potash project (the "Project") from the Ministry of Sustainable Development, Forest Economy and Environment ("MSDFE") of the Republic of Congo ("ROC").
On February 18, 2010, Minister Henri DJOMBO of MSDFE informed the Company it has been given approval to carry out activities that will lead to the exploitation of the potash at Mengo under authority of Ministerial Order n°883/MDDEFE/CAB. This authorization is valid for a period of three years and will be able to be renewed at the time the Project begins to operate.
MagIndustries President and CEO Bill Burton commented, "Receiving environmental and social approval from the Government of the Republic of Congo represents another major step in the Company's development and construction plans. Our positive relationship with the ROC, the improving global investment environment and increasing potash demand and pricing are all key factors as we work towards the goal of full construction start-up later this year. We would like to acknowledge the encouragement and support we have received for this project from the ROC Government."
The approval was granted based on the ESIA Study that was prepared and filed with MSDFE by the Company's subsidiary MagMinerals Potasses Congo SA ("MPC") and follows the temporary authorization which was granted on August 10, 2009 by the Ministry of Tourism and Environment. The documentation is available on the Company's website: http://www.magindustries.com/innerpage.aspx?pageid=167
Over the last year two years, the Company announced several key developments that have significantly advanced the Project towards the goal of construction start-up in November of 2010.
* Feasibility Study – In February 2008 SNC Lavalin completed the Feasibility Study
* Mining Permit – In April 2008 the Company was granted a 25 year mining permit for the Project
* Updated Reserve & Resource Estimate - In August 2008 MagMinerals Inc. filed a National Instrument 43-101 report for the Mengo Permit Area, prepared by ERCOSPLAN Ingenieurgesellschaft. The report was updated in June 2009.
* Potash Investment Agreement – In December 2008 the Company signed a comprehensive agreement with the government of the ROC, referred to as the Potash Investment Agreement ("PIA"). The PIA addresses all aspects of the Project, including key fiscal and development terms. The agreement is pending the final approval by the ROC Government.
* Gas Supply Agreement - In March 2009, the Company signed a gas supply agreement for the Project.
* Significant construction progress – The Company has focused on completing construction tasks key to keeping the construction time as short as possible. These have included:
o Completing the first 25 production wells, which represent half of the wells required for the start of solution mining operations to support the first phase 600,000 tonne/year potash plant.
o Installing 11.2 kilometers of 16" gas pipeline, representing 40% of the total pipeline distance required to bring gas to the Mengo plant to support both the processing and energy requirements of the potash plant.
o Basic engineering is 80% complete for the current design of the first phase.
* Key Financing Framework – In January 2010 the Company signed a financing framework with the China National Complete Plant Import & Export Company Limited ("COMPLANT"). This Framework details the steps and key business points of a $1.2 billion debt financing for the Project, as well as an option for COMPLANT or its nominee to acquire a 50.1% interest in MPC.
Once operational, the Project is expected to be the world's first new entrant into the potash industry with little new supply forecasted over the next five years. Additionally, the Project's feasibility study forecasts that the FOB potash costs will be amongst the lowest in the world.
About MagIndustries Corp.
MagIndustries is a Canadian company whose common shares are listed on the TSX and trades in Canadian currency under the symbol "MAA". The Company has 360,532,462 shares outstanding on an undiluted basis. MagIndustries' resource subsidiaries are operating and developing major industrial projects in the Republic of Congo and the Democratic Republic of Congo. More information on the Company is available at its website, www.magindustries.com
Except for historical information, this press release contains forward-looking statements, which reflect the Company's current expectation regarding future events. These forward-looking statements involve risks and uncertainties, which may cause actual results to differ materially from those statements. Those risks and uncertainties include, but are not limited to, changing market conditions, and other risks detailed from time-to-time in the Company's ongoing filings. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events in this press release might not occur.
good day for MAA