MagIndustries Corp.
TSX : MAA

MagIndustries Corp.

October 24, 2006 08:00 ET

MagMinerals Prepares to Develop Kouilou Potash Project

TORONTO, ONTARIO--(CCNMatthews - Oct. 23, 2006) - MagIndustries Corp. (the "Company") (TSX VENTURE:MAA) announced today that its wholly owned minerals division, MagMinerals Inc., is now preparing for the development of the Kouilou Potash Project (the "Project") located near the Atlantic port city of Pointe-Noire in the Republic of Congo.

Following the release of the results of the Phase I Feasibility Report in March 2006, MagMinerals contracted SNC Lavalin International Inc. to perform the Phase II "Bankable" feasibility study (BFS). Phase II which is now well underway, involves the coordination of final process flow sheets, selection of a crystallization technology supplier and other key vendor packages, final social and environmental impact assessment and the determination of detailed capital and operating costs. MagMinerals anticipates that the final phase of the BFS, when completed in the second quarter of 2007, will be sufficiently detailed and coordinated with project financing efforts to allow for the project to move quickly and smoothly into the construction phase.

MagMinerals has appointed BNP Paribas as Financial Advisors for the financing for the Kouilou Project. BNP Paribas have excellent credentials to undertake this mandate and they will be soliciting the interest of international debt providers in the coming months. BNP are also assisting with the coordination of all the required legal documents.

A key marketing step has been concluded with the signing of a preliminary potash marketing agreement with Ameropa AG of Switzerland for the sale of 100% of the potash production. The final terms of the marketing agreement are expected to support the final Project financing. Ameropa, a leading distributor of fertilizers worldwide, has also indicated their interest to acquire an equity stake in the project.

The Kouilou Potash Project is based on the application of solution mining technologies to exploit MagIndustries' 100% owned carnallite deposits, which underlie the majority of the 2200 km2 Makola license. Previous exploration and development has indicated that the potash resources are in the billions of tonnes. The license area previously supported commercial conventional underground potash production in the 1970's that was abandoned due to uncontrollable water incursion, which will not be a problem for solution mining. MagMinerals is currently drilling and installing commercial scale solution mining wells at the Mengo development site. The conclusion of this drilling phase is expected to result in a National Policy 43-101 compliant reserve estimation in the first quarter of 2007.

In addition to the extensive mineral resources, this project also benefits from its excellent location near tide water as well as very low energy costs due to the abundant natural gas which is being flared by local oil producers. The Phase I Report identified a capital cost of approximately US$412 million for a production rate of 580,000 tonnes per year. It is envisioned that this would be the first production level with additional modules considered thereafter as the resource base could support commercial production for well over 50 years.

The production process can co-produce magnesium chloride brine which could be sold as flakes or further processed, in a later stage, to magnesium alloys and pure magnesium when MagMetals' magnesium smelter has been constructed.

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 350 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, 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.

Cusip: 55917T 102

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

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