Canaf Group Inc.

Canaf Group Inc.

December 12, 2007 13:15 ET

Canaf to Complete Acquisition of Remaining 10% of Quantum Screening and Crushing (Pty.) Ltd.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 12, 2007) - Canaf Group Inc. (TSX VENTURE:CAF) ("Canaf") announced today that it has entered into an arms-length agreement to complete the acquisition of Quantum Screening and Crushing (Pty.) Ltd. (Quantum).

Canaf currently owns 90 percent of Quantum and, under the terms of this agreement, the company will acquire the remaining 10 percent of Quantum for a price of ZAR2,777,777 (CND$416,667). Half of this purchase price will be paid in cash while the remaining half will be paid for in shares for a total of 953,472 shares at a price of $0.20 per share. This agreement is subject to regulatory approval.

About Quantum

Quantum is a coal/anthracite processing company, based in South Africa that produces a low volatile calcine (carbon). The calcine is used as a reductant in the manufacture of steel and manganese. Quantum has been operating profitably for the last four years and last year Quantum's net annual income was US$814,000 (year end February 28, 2007). The two main clients of Quantum are Mittal Steel and BHP Billiton who currently purchase approximately 60 percent and 30 percent of the calcine product respectively.

Quantum currently supplies Mittal Steel with approximately 6,000 tonnes of the calcine product per month. Mittal Steel is currently testing this product at an additional plant. Once the assessment is complete, Mittal Steel may increase the total supply contract currently held with Canaf.

If the trials by Mittal Steel prove successful, Canaf plans to increase production from 9,000 tonnes per month to between 11,000 tonnes and 14,000 tonnes per month. This increase in production will require the construction of another calcining kiln. The estimated cost of construction is approximately US$1.5 million and will be bank funded in South Africa. Construction is estimated to begin eight to 12 months after the signing of a new contract with Mittal Steel.

David Way, President and CEO

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Canaf Group Inc.
    Christopher Way
    Head Office
    +44 (0) 1273 492100
    +44 (0) 1273 492175 (FAX)
    Ascenta Capital Partners Inc.
    Bryson Goodwin
    Investor Relations
    (604) 684-4743 ext. 239 or Toll Free: 1-866-684-4209
    (604) 939-1292 (FAX)