MPAC Industries Corporation
TSX VENTURE : MPN

MPAC Industries Corporation

October 22, 2007 11:20 ET

MPAC Industries Corporation: Corporate Update and Project Status at Soma Mine

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 22, 2007) - MPAC Industries Corp. (the "Company" or "MPAC") (TSX VENTURE:MPN) is pleased to advise its shareholders and the investment community of the following activities concerning the Soma coal mine (the "Coal Mine").

As previously reported, MPAC had taken possession of the property (the "Site") on the Coal Mine in late July of 2007 to establish there upon its intended coal refining process. In addition to this Site, MPAC has decided to enter into a lease arrangement for a second location in proximity to the Site in order to store the processed coal prior to its delivery to the industrial market. Coincidently, this leased site (the "Leased Site") is equipped with a sufficient water source and adequate power along with a two-step concrete foundation. Along with these features, this Leased Site is next to a highway as well as being close to a rail line and includes a building that can be used as an office and temporary staff housing.

Management has determined that certain components of the coal refining plant (the "Plant") should be set up on this Leased Site and be operated there until the main Site has been completed. This decision will allow the main Site to be completed without the disturbance of the Plant being installed around it. As the Plant has been designed in a modular fashion, it is not anticipated that there will be any significant additional costs in placing the Plant on the Leased Site and then moving it to the Site once that Site is complete. This decision will allow the Plant operating personnel to become familiar with the operation of the Plant and perform any additional pre-production testing on the Soma coal prior to the final installation on the Site later. Minimal electrical power and water supply upgrades are required on the Leased Site, thus allowing a comparatively rapid set-up of the Plant and therefore, the attainment of the anticipated pre-production timeline forecast and revenue generation for commencement of production at the Coal Mine.

The expected delivery date of the crushing equipment purchased by the Company to the Leased Site continues to be slated for the last week of October of 2007.

Once the foundations, power, and water upgrades have been completed on the Site, the Plant will be moved there from the Leased Site. In management's opinion, by designing and preparing the Site now and incorporating plans that allow for roughly twice the original capacity in the processing of raw coal into refined coal, the Company will be able to realize faster growth in 2008 and at the same time, not impact in any significant way, on the initial production capacity envisioned in 2008.

According to the Company's Business Plan, full commercial production at the Leased Site continues to be expected to ramp-up from late November of 2007, attaining targeted minimum daily and monthly tonnages by the end of December of 2007 or soon thereafter.

The adjustments made to allow for a two-stage installation of the Plant - first on the Leased Site, then moving to the Site - will enable the initial infrastructure design to incorporate, in much greater detail, most of the future expansion components, and build these into the early stage of the Site preparation - rather than concentrating mostly on the start-up date of Company's initial production at this phase of MPAC's development. Thus, at the appropriate future time of expansion, undue delays and production stoppages can be avoided or minimized and incremental revenue can be established more rapidly.

One of the factors that had influenced management to re-think the Site preparation and incorporating a more rapid expansion plan, was based on Turkey's current appetite for coal. Government statistics indicate that hard coal importation into Turkey has escalated from 6.2 million tonnes in 2001 at a cost of 333 million Euros, to 16.4 million tonnes in 2004 valued at 976 million Euros. Last month the Turkish Coal Importers held a meeting in Istanbul, amongst other things, to address the shortage of coal. From this meeting, it is apparent that in 2006 some 20 million tonnes of coal were imported into Turkey. Approximately 25% of the coal is directed to industrial use - which is the target market of the Company's Refined Coal. MPAC's management wishes to capitalize on the demand for its commodity through import substitution and take advantage of the economic growth within a country that requires energy to continue to expand its vibrant industrial base.

Barring any unforeseen eventualities, the Company's start-up phase and the initial timeline indicated for advancing into commercial production continues to fit within the schedule set by MPAC. Senior management will be traveling to Turkey within the next two to three weeks to review the progress at the Leased Site and the Site.

As well, the Company has taken steps to develop good corporate relations with the local community in Soma and was pleased to support, in part, the celebration culminating the end of this year's Ramadan. MPAC intends to be an active participant in the economic development of the Site area and looks forward to fostering a very positive relationship with the local population and their institutions.

This news release contains forward-looking statements, which are based on MPAC Industries' current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. The forward-looking statements are not guarantees of future performances and undue reliance should not be placed on them. Actual results may differ materially as a result of any number of factors and uncertainties, many of which factors are beyond the Company's control. MPAC Industries Corporation undertakes no obligation to revise any forward-looking statements except as required by applicable securities laws.

BY THE ORDER OF THE BOARD

Firoz Lakhani, President & CEO

The TSX Venture Exchange neither approved nor disapproved the contents of this news release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.

Contact Information

  • MPAC Industries Corporation
    J. Richard W. Hall
    Investor Relations
    (604) 644-2244
    Website: www.mpacindustries.com