MagIndustries Corp.

MagIndustries Corp.

November 14, 2006 08:00 ET

MagForestry Starts Chip Mill Construction

TORONTO, ONTARIO--(CCNMatthews - Nov. 14, 2006) - MagIndustries Corp. (the "Company") (TSX VENTURE:MAA) announced today that its wholly owned forestry division, MagForestry Inc., has begun the construction of a 500,000 tonne per year wood chipping plant on its harbour-side lands located in the Atlantic port city of Pointe-Noire in the Republic of Congo.

MagForestry controls and operates a 68,000 hectare eucalyptus forestry plantation all of which lies within a 40 kilometer radius of Pointe-Noire creating one of the World's most accessible sources of wood fiber. Previously developed by Shell Oil as a renewable and sustainable source of bio-mass, the plantation is based on extremely fast growing clones of eucalyptus. During a seven year cycle from planting to harvesting the trees reach heights of 25 meters (80 feet). Since acquiring the plantation in 2005 MagForestry has re-established commercial operations based on the sale of eucalyptus logs to the pulp and paper and fiberboard industries in Europe.

MagForestry commissioned a feasibility study for a log-chipping plant in early 2006. Results of the study indicated a robust project with an IRR of about 35%, a capital cost of US$25 million (including some ancillary infrastructure) and a 4 year payback. MagForestry has an agreement in principle with a major South African bank whereby 70% of the capital cost will be financed using a structured debt facility.

SiVEST of South Africa has been appointed as contractors to build the chip plant and site work has begun. Construction and plant start-up are expected to be complete by the end of 2007. Annual production capacity is 500,000 tonnes of eucalyptus wood chips based on 2 shifts per day. Purchase contracts are currently being negotiated for 100% of capacity. Annual revenues from chip sales are expected to be US$30 million which in addition to log sales could bring MagForestry's annual sales to about US$40 million in 2008.

MagForestry is planning to increase the production capacity of the chip mill to 1 million tones per year following the increased mechanization of its forest harvesting equipment. Additional future steps for MagForestry include producing wood-fuel pellets which are in increasing demand in Europe. Longer term, as the plantation reaches a production rate of 1.6 million tonnes per year, the potential exists to add either an MDF fiberboard plant or a pulp and paper plant.

About MagIndustries Corp.:

MagIndustries' resource subsidiaries are operating and developing major industrial projects in the Republic of Congo (ROC) and the Democratic Republic of Congo (DRC).

- MagEnergy, a wholly owned subsidiary, is the leading participant in the refurbishment (Phase I) and rehabilitation (Phase 2) of the generating capacity at the 1440MW Inga II Hydroelectric station on the Congo River in the DRC. The Industrial Development Corporation of South Africa holds a 30% interest in Phase I and a 15% interest in Phase 2. MagEnergy is also evaluating the development of the 300 MW Busanga hydro-electric site in the Katanga region of the DRC.

- MagForestry, a wholly owned subsidiary of MagIndustries, controls 100% of Eucalyptus Fibre Congo, an operating, 68,000 hectare eucalyptus forest plantation which overlies MagIndustries Makola Mineral License near Pointe-Noire, ROC.

- MagMinerals, a wholly owned subsidiary, is completing a bankable feasibility study for the development of a 600,000 tonne per year potash (fertilizer) plant near Pointe-Noire, ROC.

- MagMetals, a wholly owned subsidiary, is planning the development of a 72,000tpy magnesium smelter adjacent to MagMinerals' potash plant for the production of magnesium alloys for the global automotive industry. The raw materials for the MagMinerals and MagMetals plants will be sourced by solution mining MagIndustries' 100% owned carnallite (magnesium and potash salt) deposits which underlie the Makola Mineral License near Pointe-Noire.

MagIndustries Corp. is a Canadian company whose common shares are listed on the TSX Venture Exchange and trades in Canadian currency under the symbol "MAA". The Company has 170,718,384 shares outstanding on an undiluted basis, More information on the Company is available at its website,

Except for historical information, this press release contains forward-looking statements, which reflect the Company's current expectation regarding future events. These forward-looking statements involve risks and uncertainties, which may cause actual results to differ materially from those statements. Those risks and uncertainties include, but are not limited to, changing market conditions, and other risks detailed from time-to-time in the Company's ongoing filings. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events in this press release might not occur.

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

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