MagIndustires
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Headline: MagIndustries Announces Updated Technical Report and Clarifies Previous Disclosure
Symbol: MAA
TORONTO, ONTARIO--(Marketwire - June 11, 2009) - MagIndustries Corp.(the "Company") (TSX VENTURE:MAA) is pleased to announce that it hasfiled an updated National Instrument 43-101 ("NI 43-101") complianttechnical report entitled "Updated Reserve and Resource Estimate forMagMinerals Kouilou Potash Project, Republic of Congo" dated June 10,2009 (the "2009 Technical Report") in respect of the property held byits wholly-owned subsidiary MagMinerals Potash Corp. The TechnicalReport updates the 43-101 technical report filed on December 1, 2008(the "2008 Technical Report").
The 2009 Technical Report updates a number of areas in the 2008 Technical Report including, but not limited to:
- A minor decrease in the total reserve and resource estimates as aresult of a change in the area available for the brinefield as a resultof the finalization of the land use and occupation survey.
- The 2009 Technical Report indicates proven and probable reserves of33.2 million tonnes of potash which can support a reserve life of morethan 54 years at a projected production rate of 600,000 tonnes peryear. The 2009 Technical Report estimates proven reserves of 151.2million tonnes of carnallitite, at a carnallite grade of 64.4% of oreand a KCl grade of 17.3% of ore, concluding with proven reserves of26.1 million tonnes of KCl. The 2009 Technical Report further estimatesprobable reserves of 40.3 million tonnes of carnallitite, at acarnallite grade of 65.7% of ore and a KCl grade of 17.6% of ore,concluding with probable reserves of 7.1 million tonnes of KCl.
- This compares to the 2008 Technical Report which indicated proven andprobable reserves of 33.5 million tonnes of potash which could supporta reserve life of more than 54 years at a projected production rate of600,000 tonnes per year. The 2008 Technical Report estimated provenreserves of 155.0 million tonnes of carnallitite, at a carnallite gradeof 64.2% of ore and a KCl grade of 17.2% of ore, concluding with provenreserves of 26.7 million tonnes of KCl. The 2008 Technical Reportfurther estimated probable reserves of 33.2 million tonnes ofcarnallitite, at a carnallite grade of 63.9% of ore and a KCl grade of17.2% of ore, concluding with probable reserves of 6.8 million tonnesof KCl.
- An increase in the estimated capital expenses of Phase 1 of theKouilou potash project from US$723 million to US$835 million due, inpart, to the inclusion of the 26 km gas pipeline between the Djeno gastreatment plant and the Kouilou project site, an increase in materialcosts (mainly an increase in the price of steel), and an increase inthe indirect costs.
- An increase in estimated operating expenses of Phase 1 of the Kouiloupotash project from US$83 per tonne of K60 to US$124 per tonne of K60resulting from, among other things, an increase in the cost of naturalgas, based on the finalization of a fixed-price (US$1.20/million BTU),13-year gas supply agreement.
- An increase in the assumption of the base potash price for 2012 ofUS$649 from US$464 net realized price per tonne of KCl (based oncurrent third-party potash price forecasts).
The overall recommendations of the authors of the 2009 Technical Reportremain unchanged and they conclude that, using the base case, theKouilou potash project's internal rate of return is estimated at 23%with the net present value estimated at US$914 million using a discountrate of 12%. Assuming total project costs of US$1.2 billion, pay backis achieved in approximately five years, assuming cumulative cash flowsfrom operations for the period 2012 to 2016.
Clarification
In connection with the review by the Ontario Securities Commission (the"OSC") of the Company's amended and restated preliminary prospectusfiled with the OSC and certain other provincial regulatory authoritieson June 2, 2009, the Company has been requested to issue a pressrelease in respect of certain of its previous disclosure relating tothe Kouilou potash project (the "Project").
Specifically, the OSC has noted that certain of the Company'spreviously filed continuous disclosure documents did not include thegrade information for each category of mineral resource and reserves inaccordance with Section 2.2(d) of NI 43-101. In particular, theinformation contained in news releases of the Company dated December29, 2008, March 26, 2009 and April 16, 2009, in the management'sdiscussion and analysis of financial results for the year endedDecember 31, 2008, in the annual information form for the year endedDecember 31, 2008 dated May 27, 2009 and on the Company's website,which disclosed potash resource and reserve estimates without alsostating the grade or quality and quantity for each category of themineral resource and mineral reserve and is expressly prohibited by NI43-101. Accordingly, such information should not be relied upon.
The Company hereby confirms that its current mineral resource andmineral reserve estimates at the Kouilou potash project are as set outin the following excerpt taken from the 2009 Technical Report filed onSEDAR at www.sedar.com on June 11, 2009.
The estimated resources of each category for Horizon 1, Horizon 2,Horizon 3 and Horizon 4 are presented in the table below. Alreadyexcluded from these resources are areas with geological and technicalexclusion zones (approx. 35 % reduction) and mining losses assuming theuse of a solution mining method have also been accounted for.
The authors of the Technical Report, Dr. Henry Rauche and Dr.Sebastiaan van der Klauw, are the qualified persons with respect to thetechnical reporting and have reviewed and approved the contents of thispress release.
About MagIndustries Corp.
MagIndustries Corp. is a Canadian company whose common shares arelisted on the TSX-V Exchange and trades in Canadian currency under thesymbol "MAA". The Company has approximately 288,079,962 sharesoutstanding on an undiluted basis. MagIndustries' resource subsidiariesare operating and developing major industrial projects in the Republicof Congo and the Democratic Republic of Congo.
Except for historical information, this press release containsforward-looking statements, which reflect the Company's currentexpectation regarding future events. These forward-looking statementsinvolve risks and uncertainties, which may cause actual results todiffer materially from those statements. Those risks and uncertaintiesinclude, but are not limited to, changing market conditions, and otherrisks detailed from time-to-time in the Company's ongoing filings. Weundertake no obligation to publicly update or revise anyforward-looking statements, whether as a result of new information,future events or otherwise. In light of these risks, uncertainties andassumptions, the forward-looking events in this press release might notoccur.
Cusip: 55917T 102
Neither TSX Venture Exchange nor its Regulation Services Provider (asthat term is defined in the policies of the TSX Venture Exchange)accepts responsibility for the adequacy or accuracy of this release.
The 2009 Technical Report updates a number of areas in the 2008 Technical Report including, but not limited to:
- A minor decrease in the total reserve and resource estimates as aresult of a change in the area available for the brinefield as a resultof the finalization of the land use and occupation survey.
- The 2009 Technical Report indicates proven and probable reserves of33.2 million tonnes of potash which can support a reserve life of morethan 54 years at a projected production rate of 600,000 tonnes peryear. The 2009 Technical Report estimates proven reserves of 151.2million tonnes of carnallitite, at a carnallite grade of 64.4% of oreand a KCl grade of 17.3% of ore, concluding with proven reserves of26.1 million tonnes of KCl. The 2009 Technical Report further estimatesprobable reserves of 40.3 million tonnes of carnallitite, at acarnallite grade of 65.7% of ore and a KCl grade of 17.6% of ore,concluding with probable reserves of 7.1 million tonnes of KCl.
- This compares to the 2008 Technical Report which indicated proven andprobable reserves of 33.5 million tonnes of potash which could supporta reserve life of more than 54 years at a projected production rate of600,000 tonnes per year. The 2008 Technical Report estimated provenreserves of 155.0 million tonnes of carnallitite, at a carnallite gradeof 64.2% of ore and a KCl grade of 17.2% of ore, concluding with provenreserves of 26.7 million tonnes of KCl. The 2008 Technical Reportfurther estimated probable reserves of 33.2 million tonnes ofcarnallitite, at a carnallite grade of 63.9% of ore and a KCl grade of17.2% of ore, concluding with probable reserves of 6.8 million tonnesof KCl.
- An increase in the estimated capital expenses of Phase 1 of theKouilou potash project from US$723 million to US$835 million due, inpart, to the inclusion of the 26 km gas pipeline between the Djeno gastreatment plant and the Kouilou project site, an increase in materialcosts (mainly an increase in the price of steel), and an increase inthe indirect costs.
- An increase in estimated operating expenses of Phase 1 of the Kouiloupotash project from US$83 per tonne of K60 to US$124 per tonne of K60resulting from, among other things, an increase in the cost of naturalgas, based on the finalization of a fixed-price (US$1.20/million BTU),13-year gas supply agreement.
- An increase in the assumption of the base potash price for 2012 ofUS$649 from US$464 net realized price per tonne of KCl (based oncurrent third-party potash price forecasts).
The overall recommendations of the authors of the 2009 Technical Reportremain unchanged and they conclude that, using the base case, theKouilou potash project's internal rate of return is estimated at 23%with the net present value estimated at US$914 million using a discountrate of 12%. Assuming total project costs of US$1.2 billion, pay backis achieved in approximately five years, assuming cumulative cash flowsfrom operations for the period 2012 to 2016.
Clarification
In connection with the review by the Ontario Securities Commission (the"OSC") of the Company's amended and restated preliminary prospectusfiled with the OSC and certain other provincial regulatory authoritieson June 2, 2009, the Company has been requested to issue a pressrelease in respect of certain of its previous disclosure relating tothe Kouilou potash project (the "Project").
Specifically, the OSC has noted that certain of the Company'spreviously filed continuous disclosure documents did not include thegrade information for each category of mineral resource and reserves inaccordance with Section 2.2(d) of NI 43-101. In particular, theinformation contained in news releases of the Company dated December29, 2008, March 26, 2009 and April 16, 2009, in the management'sdiscussion and analysis of financial results for the year endedDecember 31, 2008, in the annual information form for the year endedDecember 31, 2008 dated May 27, 2009 and on the Company's website,which disclosed potash resource and reserve estimates without alsostating the grade or quality and quantity for each category of themineral resource and mineral reserve and is expressly prohibited by NI43-101. Accordingly, such information should not be relied upon.
The Company hereby confirms that its current mineral resource andmineral reserve estimates at the Kouilou potash project are as set outin the following excerpt taken from the 2009 Technical Report filed onSEDAR at www.sedar.com on June 11, 2009.
The estimated resources of each category for Horizon 1, Horizon 2,Horizon 3 and Horizon 4 are presented in the table below. Alreadyexcluded from these resources are areas with geological and technicalexclusion zones (approx. 35 % reduction) and mining losses assuming theuse of a solution mining method have also been accounted for.
-----------------------------------------------------------------------
Horizon 1 Horizon 2 Horizon 3 Horizon 4 Total
-----------------------------------------------------------------------
Measured resources
Million tonnes of
carnallitite - 38.1 22.4 86.2 146.7
Carnallite grade of
ore (%) - 44.2 90.0 67.4 64.9
KCl grade of ore (%) - 11.8 24.1 18.1 17.4
Million tonnes of KCl - 4.5 5.4 15.6 25.5
-----------------------------------------------------------------------
Indicated resources
Million tonnes of
carnallitite - 9.2 5.4 24.9 39.5
Carnallite grade of
ore (%) - 44.8 89.3 68.9 66.1
KCl grade of ore (%) - 12.0 23.9 18.5 17.7
Million tonnes of KCl - 1.1 1.3 4.6 7.0
-----------------------------------------------------------------------
Inferred resources
Million tonnes of
carnallitite 427.6 191.9 113.7 482.5 1215.7
Carnallite grade of
ore (%) 63.6 44.1 90.0 66.3 64.1
KCl grade of ore (%) 17.1 11.8 24.1 17.8 17.2
Million tonnes of KCl 73.0 22.7 27.5 85.8 209.0
-----------------------------------------------------------------------
The estimated reserves of each category for Horizon 2, Horizon 3 and
Horizon 4 are presented in the table below.
-----------------------------------------------------------------------
Horizon 2 Horizon 3 Horizon 4 Total
-----------------------------------------------------------------------
Proven reserves
Million tonnes of
carnallitite 39.3 22.4 89.5 151.2
Carnallite grade of
ore (%) 44.2 90.0 67.1 64.4
KCl grade of ore (%) 11.8 24.1 18.0 17.3
Million tonnes of KCl 4.6 5.4 16.1 26.1
-----------------------------------------------------------------------
Probable reserves
Million tonnes of
carnallitite 9.2 5.4 25.7 40.3
Carnallite grade of
ore (%) 44.5 89.4 68.2 65.7
KCl grade of ore (%) 11.9 24.0 18.3 17.6
Million tonnes of KCl 1.1 1.3 4.7 7.1
-----------------------------------------------------------------------
The authors of the Technical Report, Dr. Henry Rauche and Dr.Sebastiaan van der Klauw, are the qualified persons with respect to thetechnical reporting and have reviewed and approved the contents of thispress release.
About MagIndustries Corp.
MagIndustries Corp. is a Canadian company whose common shares arelisted on the TSX-V Exchange and trades in Canadian currency under thesymbol "MAA". The Company has approximately 288,079,962 sharesoutstanding on an undiluted basis. MagIndustries' resource subsidiariesare operating and developing major industrial projects in the Republicof Congo and the Democratic Republic of Congo.
Except for historical information, this press release containsforward-looking statements, which reflect the Company's currentexpectation regarding future events. These forward-looking statementsinvolve risks and uncertainties, which may cause actual results todiffer materially from those statements. Those risks and uncertaintiesinclude, but are not limited to, changing market conditions, and otherrisks detailed from time-to-time in the Company's ongoing filings. Weundertake no obligation to publicly update or revise anyforward-looking statements, whether as a result of new information,future events or otherwise. In light of these risks, uncertainties andassumptions, the forward-looking events in this press release might notoccur.
Cusip: 55917T 102
Neither TSX Venture Exchange nor its Regulation Services Provider (asthat term is defined in the policies of the TSX Venture Exchange)accepts responsibility for the adequacy or accuracy of this release.
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elmacanuck
City
Rank
Treasurer
Activity Points
253
Rating
Your Rating
Date Joined
09/12/2008
MagIndustires
Symbol
MAA
Exchange
TSX
Shares
418,242,462
Industry
Metals & Minerals
Website