MPAC Industries Corporation
NEX BOARD : MPN.H
TSX VENTURE : MPN

MPAC Industries Corporation

October 04, 2005 16:00 ET

MPAC Industries Corp.: Reinstatement of Shares for Trading and Change of Business

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 4, 2005) - MPAC Industries Corp. (the "Company or "MPAC") (NEX BOARD:MPN.H) is pleased to announce that its shares will be reinstated for trading on NEX on October 5, 2005, pending completion of the Company's proposed change of business and graduation to Tier 2 of the TSX Venture Exchange (the "Reactivation").

The Reactivation involves the Company entering into the coal refining business in Turkey (see below) and the completion of a 6,000,000 unit private placement at $0.11 per unit (the "Private Placement"). Each unit will consist of one share and 1/2 of a warrant, with one full warrant entitling the holder to purchase one additional share for $0.20 per share for one year from closing.

As previously disclosed in the Company's news release of July 20, 2005, Blackmont Capital Inc., formerly First Associates Investments Inc. ("Blackmont"), is acting as sponsor and agent in connection with the Reactivation and Private Placement.

Since 2003, the Company has been negotiating an agreement to beneficiate coal in Turkey. On August 20, 2005 the Company entered into an agreement (the "Agreement") with Ibrice Maden Isletmeleri Ltd. ("Ibrice") and Rila A.S. ("Rila") to beneficiate coal produced from the Ibrice coal mine (the "Coal Mine") located in Takirdag (outside of Istanbul), Turkey. Ibrice is the owner of the Coal Mine and Rila has production rights to the Coal Mine. Both Ibrice and Rila are at arm's length to the Company.

The Coal Mine is currently producing 170,000 tons per annum of low-grade coal. Under the Agreement, the production will be increased to an annual minimum rate of 400,000 tons of refined coal over the first year of the Agreement. MPAC will use existing technology sourced in Canada, to refine and upgrade the coal.

The following is a brief summary of the salient terms of the Agreement.

1. Supply of Coal - Ibrice is responsible to deliver to MPAC at the Coal Mine sufficient unrefined coal so that MPAC will be able to produce at least 400,000 tons of refined coal per year. Ibrice has represented that it has at least thirty (30) million tons of unrefined coal available for treatment.

2. Title, Price and Term - All of the coal will remain the property of Ibrice. The term of the agreement is sixty (60) years, or until the Coal Mine is exhausted, or MPAC determines that it is uneconomic to refine the coal. During the first five years of the term Ibrice will pay a refining charge of US$53/ton of refined coal. For the balance of the term, the refining charge will be adjusted based on a formula that is tied to the spot price of coal.

3. Plant Site and Equipment - MPAC is responsible for the supply, installation and operation of a coal processing plant at the Coal Mine. It is anticipated that the plant and equipment will be purchased through lease-to-purchase arrangements, which have been negotiated.

4. Royalty - A royalty of fourteen percent (14%) of net operating revenues generated by MPAC under the Agreement before allowing for taxes, amortization and depreciation is payable to an arm's length third party.

The Company believes that the net proceeds of the Private Placement will be sufficient to enable it to commence commercial refining operations under the Agreement.

The Company has completed preliminary efficiency tests on two of the production methods it may use to refine the coal and is satisfied that it will be able to refine the coal on commercially favorable terms.

The Company anticipates that it will reach the full production rate of a minimum of 400,000 tons per annum within fifteen (15) months following closing.

In addition to the Ibrice Coal Mine the Company intends to pursue other coal deposits in Turkey for refining opportunities for delivery to the domestic industrial sector, particularly the cement and the sugar industries.

MPAC currently has 9,128,694 common shares issued and outstanding. In addition to the Private Placement, there is a pending settlement for shares for debt in the amount of 500,000 common shares ($55,000 at $0.11 per share), which has been previously approved by the shareholders, but not yet issued. Allowing for the issuance of shares under the Private Placement (excluding shares issuable on the exercise of warrants) and the shares for debt, the Company will have 15,628,694 common shares issued and outstanding at the time of closing of the transactions.

Some of the statements contained in this release are forward-looking statements, such as estimates and statements that describe the corporation's future plans, objectives or goals, including words to the effect that the corporation or management expects a stated condition to exist or occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ from those currently anticipated in such statements by reason of factors such as, but not limited to, changes in general economic and market conditions.

BY THE ORDER OF THE BOARD

Firoz Lakhani, President & CEO

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange Acceptance. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in MPAC's disclosure record on SEDAR, any information released or received with respect to the change of business may not be accurate or complete and should not be relied upon. Trading in the securities of MPAC should be considered highly speculative.

Blackmont Capital Inc., subject to completion of satisfactory due diligence, has agreed to act as sponsor to MPAC in connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.


The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved of the contents of this press release.

Contact Information

  • MPAC Industries Corp.
    Firoz Lakhani
    President & CEO
    (604) 551-7697