MagIndustries Corp.
TSX : MAA

MagIndustries Corp.

June 12, 2009 13:19 ET

MagIndustries Corp. Announces it Has Signed a Memorandum of Understanding With a Strategic Party

TORONTO, ONTARIO--(Marketwire - June 12, 2009) - MagIndustries Corp. (the "Company") (TSX VENTURE:MAA) is pleased to announce that it has signed a Memorandum of Understanding ("MOU") with a strategic party (the "Subscriber") that intends to subscribe for 400 million MagIndustries shares at a price of Cdn$0.70.

Closing of the transaction contemplated by the MOU is subject to a number of conditions and approvals which include approval of the transaction by MagIndustries' Board of Directors, approval by a majority of MagIndustries shareholders at a special meeting of shareholders, all relevant regulators and government authorities and satisfactory completion of due diligence. The share subscription is also conditional on the Subscriber arranging substantially all of the debt financing required for the completion of Phase I of the Company's Kouilou Potash Project in the Republic of Congo (the "Project") as an alternative to debt financing that might be available to the Company from other sources.

The Company would be in a fully funded position with respect to the Project if the transaction contemplated by the MOU is completed.

The MOU outlines the intentions and principal terms of investment in anticipation of finalizing and executing definitive documentation. Upon conclusion of the investment, the Subscriber would hold approximately 52.7% of the Company's common shares outstanding (after giving effect to MagIndustries' recently announced equity financing, assuming the full exercise of the over-allotment option). Further details relating to the transaction will be provided in a future press release.

About MagIndustries Corp.

MagIndustries 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 288,079,962 shares outstanding on an undiluted basis. MagIndustries' resource subsidiaries are operating and developing major industrial projects in the Republic of Congo and the Democratic Republic of Congo. More information on the Company is available at its website, www.magindustries.com.

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.

"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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