MPAC Industries Corporation
TSX VENTURE : MPN

MPAC Industries Corporation

January 22, 2008 08:58 ET

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

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 22, 2008) - 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 refining plant (the "Plant") on the leased site (the "Leased Site") located in the western region of Turkey close to the City of Izmir (the third largest Turkish city).

As discussed in the Company's News Release of December 6, 2007, one Company Executive and the Contractor ("Canadian Contractor") left for Turkey on December 26, 2007. That Executive has since returned to Canada after attending the Leased Site, meeting with members of the business community, and reviewing other coal deposits. The Contractor remained in Turkey to address the Plant start-up process. The Contractor has been engaged under contract with MPAC for a period of six (6) months with an option to extend the agreement upon mutually agreed upon terms. Incidentally, this particular Contractor has over twenty-five (25) years of experience in various mining and mineral processing plants around the world.

The loading and storage areas for the raw and refined coal have been inspected; the crushing and conveyor circuits have been tested and interlocked; the initial number of tailings and concentrate ponds have been constructed; the commissioning of the coal refining technology has now been completed; and the first test quantities of run-of-mine coal ("ROM Coal") have been processed through the Plant.

The ROM Coal was not introduced into the system until the required parameters had been set by the Contractor and had been fully tested. In addition, in order to test the efficiency of the Plant to its maximum level, the Company requested that the Mine Owner supply coal from a seam with a higher ash content. The ROM test Coal, with twenty-six hundred (2,600) kilocalories and an ash content of forty percent (40%) was then introduced into the Plant. A number of samples of the resulting refined coal ("Refined Coal") have now been sent to a laboratory in Turkey. The Company expects the certified results of these tests within the next few days.

However, from the initial results that are being communicated to the Company as of today, it is apparent that the Plant is operating according to MPAC's expectations. These preliminary results indicate that the calorific value was increased from twenty-six hundred (2,600) to forty-eight hundred (4,800), an increase of about forty five percent (45%). Ash and sulphur content reductions will be reported once the final test results are known.

Meanwhile, a number of ancillary equipment and Plant performance issues were identified during the commissioning and testing phase. These issues will be addressed in the next few weeks. Once completed, these adjustments will allow the Plant to be prepared for commercial production. The Turkish contractors are expected to be at the Plant later in the week to fine-tune their portion of the Plant to harmonize with the properties of the input commodity. For the balance of the current month, the Plant could undergo further test runs and process further quantities of coal.

The resulting Refined Coal, after the test results have been certified, will be delivered to the Mine Owner, and the Company will be credited with this delivery in accordance with the Coal Refining Agreement. All of the coal processed at the Plant will be treated in the same manner.

Barring any unforeseen circumstances, MPAC is forecasting its February 2008 Refined Coal production at 25,000 tonnes. Production target figures for March and April 2008 will be announced at a later date based upon the performance of the Plant in February.

With the results obtained to date from the Plant, MPAC is not in a position to comment on the coal input / output ratios (tonnage and efficiency). Once the Plant has processed sufficient quantities of ROM Coal, the Company will be in a better position to analyze the data and make further comment.

The Company is proceeding with the construction of additional concentrate and tailings ponds on the Leased Site in order to prepare for the forecast annual production of a minimum of 400,000 tonnes of Refined Coal from the Leased Site.

Fortuitously, the property immediately adjacent to the Leased Site recently became available and MPAC has entered into a lease with the owner to convert that second leased property into a storage area for the Refined Coal produced. As this second adjacent property has leasehold improvements already, including a roof to shelter the finished product from the elements, the Company has capitalized early on this future expansion opportunity.

The Company recognizes that it has tested the patience of the investors in the time it has taken in arriving at this stage in its development. However, there are extenuating circumstances that should be considered: working in a new country that has a very different set of business practices and procedures; delays caused by a four-day religious holiday in Turkey; the Christmas and New Years holidays; inclement weather; and the limited local availability of specialized equipment necessary to complete the Plant circuit. Despite the delays to date, the Company is very satisfied with the achievement of commissioning the various components of the Plant circuit and the initial testing of the completed integrated circuit.

The Company continues to look forward to positive returns from this project according to the projections contained in the Business Plan.

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