SOURCE: MagneGas Corp.

MagneGas Corp.

May 19, 2010 09:00 ET

MagneGas Confirms China Partner Is Finalizing Phase II Option

Negotiations Underway to Proceed With $2.0 MM Equity Investment and 20% Joint Venture Ownership of China Company

TAMPA, FL--(Marketwire - May 19, 2010) -  MagneGas Corporation ("MagneGas" or the "Company") (OTCBB: MNGA), a producer of a metal working fuel and natural gas alternative made from liquid waste, announced today that Beijing-based DDI Industry International ("DDI") has exercised its option to proceed with Phase II of the MagneGas China initiative and has submitted an agreement to formalize the partnership and trigger formational next steps. In Phase I, DDI signed a Purchase Agreement for a 200kw Refinery at a price of $1.9 million and paid $950,000 to the Company as down-payment. In Phase II, DDI would acquire the exclusive MagneGas™ Technology and manufacturing rights for the Greater China market. As compensation DDI would directly invest $2.0 MM in MagneGas Corp. DDI would create a new China-based Joint Venture company ("MagneGas China") to house and administer the rights; DDI would seek to take this Joint Venture company public in the Asian market in the future. DDI would grant to MagneGas Corp. 20% of MagneGas China, giving the Company and its investors a significant and perpetual share of China market operations. MagneGas CEO Dr. Ruggero Santilli or his assignee would receive a full voting seat on the MagneGas China Board of Directors.

MagneGas recently met with senior members of DDI during its New York trip and made significant progress in defining final terms agreeable to both parties. DDI further demonstrated its commitment to the partnership by accompanying MagneGas to its UN speaking opportunity, presenting a unified front to this vital international audience.

"We have found in DDI a partner not only of substantial resources, but one equally passionate about the MagneGas™ Technology and its potential benefits to both the environment and the fiscal bottom line," stated MagneGas President Richard Connelly. "Negotiations on specific terms are underway, and we are both pleased and encouraged by the progress we have mutually made in the last week. We look forward to reaching a final agreement favorable to both parties and their constituents -- and to MagneGas investors in particular."

MagneGas management cannot offer any assurance as to the ultimate outcome of these negotiations. The goal by both parties is to finalize all agreements within 60 days.

To be added to the MagneGas investor email list, please email justin.davis@cirrusfc.com with MNGA in the subject line.

About MagneGas Corporation (www.magnegas.com)

Founded in 2007, Tampa-based MagneGas Corporation (OTCBB: MNGA) is the producer of MagneGas™, a natural gas alternative and metal working fuel made from liquid waste such as sewage, sludge, manure and certain industrial and oil based liquid wastes. The Company's patented Plasma Arc Flow™ process gasifies liquid waste, creating a clean burning fuel that is essentially interchangeable with natural gas, but with lower green house gas emissions. MagneGas™ can be used for metal cutting, cooking, heating or powering bi fuel automobiles.

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