MagIndustries Corp.

MagIndustries Corp.

August 23, 2011 09:01 ET

MagIndustries Announces Financing and Appointment of Additional Officers

TORONTO, ONTARIO--(Marketwire - Aug. 23, 2011) - MagIndustries Corp. (TSX:MAA) (the "Company") is pleased to announce that it has entered into an agreement with Evergreen Resources Holdings (BVI) Ltd. ("Evergreen"), the Company's controlling shareholder, to provide the Company with a C$50,000,000 principal amount term loan and that bears interest at a rate of 10.5% per annum calculated daily and compounded monthly, which interest, if unpaid, will be capitalized and added to the outstanding principal balance (the "Loan").

Approximately C$34 million of the Loan will be used to fund the redemption of its 11% secured notes that are subject to redemption offers issued on August 8, 2011 (see press release dated August 9, 2011). The remainder will be used to fund ongoing operations.

Subject to the approval of disinterested shareholders (which approval will be sought at a special meeting of shareholders of the Company) and receipt of regulatory approval, the Loan will be convertible, in whole or in part, at the option of Evergreen, into common shares of the Company on the basis of a conversion price per share that is equal to the volume average trading price of the common shares of the Company on the Toronto Stock Exchange for the five trading days immediately prior to date of the Loan, less a discount of 20% (the "Conversion Feature").

In the event that the disinterested shareholders of the Company approve the Conversion Feature, the Loan will become interest free, as from the date of such approval. The Loan will mature on December 28, 2011 unless the disinterested shareholders of the Company approve the Conversion Feature, in which case the maturity date may be extended to a date to be agreed between the Company and Evergreen, but not later than the first anniversary of the Loan.

Given Evergreen's shareholding in the Company, the Loan constitutes a related party transaction pursuant to applicable securities laws. The entering into of the Loan is exempt from the minority approval requirements that would otherwise be applicable under such laws on the basis that it is based on reasonable commercial terms. As indicated above, the Conversion Feature of the Loan is subject to disinterested shareholder approval. In the event that the Loan is fully advanced, the disinterested shareholders approve the Conversion Feature and Evergreen exercises the Conversion Feature in full, its share ownership of the Company would increase from approximately 77% to approximately 84% on an undiluted basis (assuming that the five day volume weighted average trading price of the Company's common shares at the date o f exercise of the Conversion Feature is C$0.215).

Appointment of Officers

In addition, the Board of Directors of the Company has appointed Longbo CHEN as Co-Chief Executive Officer, Ren ZHAO as Co-Chief Financial Officer and Qingsheng WANG as Chief Engineer. These appointments are a complement to, not a replacement of, the existing management team of Rich MORROW, Chief Executive Officer, Stephane RIGNY, President, Will BURTON, Chief Financial Officer and Vice President, Finance, and Richard PRATT, General Counsel, Corporate Secretary and Vice President, Administration.

About MagIndustries Corp.

MagIndustries is a Canadian company whose common shares are listed on the TSX and trades in Canadian currency under the symbol "MAA". MagIndustries is focused on the development of its potash assets in the Republic of Congo. More information on the Company is available on 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.

Cusip: 55917T 102

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