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MagIndustries Corp. (TSX:MAA) and COMPLANT had agreed on material commercial terms under which COMPLANT would acquire a controlling interest in the Company’s Mengo Potash Project in the Republic of Congo. The parties have proceeded with the drafting of a Project Development Agreement reflecting these terms. The PDA was scheduled to be signed by both parties in Toronto by the end of August 2010, subject to the completion and results of final due diligence and technical evaluation by COMPLANT and receipt of authorizations by the boards of directors of each party.
Meetings took place between senior managers of the two companies in Toronto but the expected approval from COMPLANT’s controlling shareholder, State Development and Investment Commission (“SDIC”) (a Chinese State Owned Enterprise) to sign the PDA is still pending. MagIndustries understands that COMPLANT has forwarded technical and financial feasibility studies to SDIC recommending the transaction, subject to the completion and results of final due diligence and technical evaluation. The SDIC review of this recommendation is ongoing. Pending the results of SDIC and other Chinese governmental approval processes MagIndustries continues in active dialogue with COMPLANT, however on a non-exclusive basis and is re-assessing other options in light of the dramatic changes occurring in the industry. Overall the Potash supply industry is facing a fundamental re-shaping with BHP Billiton PLC’s $38.6-billion (U.S.) takeover offer for Potash Corp. of Saskatchewan Inc (a valuation which requires higher potash prices in the future to provide a satisfactory financial return) and aggressive efforts underway to consolidate the Russian and Former Soviet Union producers. The implications of these pending changes are potentially negative for potash importing nations such as China, given the prospects of higher future potash prices and greater concentration of producers. These developments, in the Company’s view, highlight the expected advantages of its Mengo Potash Project of relatively low capital cost per tonne of production, low production costs and scalability based on abundant reserves. 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 418,362,462 shares outstanding on an undiluted basis. MagIndustries is focused on the development of its potash assets in the Republic of Congo. More information on the Company is available on its website, www.magindustries.com. |
