MPAC Industries Corporation
TSX VENTURE : MPN

MPAC Industries Corporation

May 06, 2008 00:08 ET

MPAC Industries Corporation: Corporate Update and Announcement of Non-Brokered Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 6, 2008) - MPAC Industries Corporation ("MPAC" or the "Company") (TSX VENTURE:MPN) is pleased to provide its shareholders and the investment community an update regarding the coal refining pilot plant (the "Plant") located in the City of Soma in Turkey.

Having just completed and filed our annual Audited Financial Statements and Management Discussion & Analysis ("MD&A") for the period ended December 31, 2007, management would like to take this opportunity to look back over the past four years and discuss the progress made to date. Those shareholders and analysts who have been involved with the Company since that time will be familiar with our journey. In its Corporate News Release of March 14, 2004, the Company laid out a specific road map of how it intended to proceed. The Company's subsequent News Releases of January 22, January 29, February 14, March 11, and April 4, 2008 track both the progress and the challenges over this period.

As the aforementioned News Releases indicate, the Company has recently reached a new milestone in the development of its Coal Refining Project for Turkey. Some five years ago, MPAC embarked upon a project to refine coal in Turkey adapting a Canadian technology - hitherto untested for coal.

Numerous laboratory tests were carried out to prove the integrity and validity of the envisaged adaptation of the technology and further refinements of the technology selected by the Company for the start up business model.

The stages involved in bringing any new process into production in the commercial arena involve at least the following steps:

(1) The conceptualization of the production process;

(2) Laboratory testing of the main components of a plant;

(3) Building out of the technological components into a pilot process;

(4) The refinement of the pilot process into a commercial plant;

(5) Testing of the commercial plant; and

(6) The refinement of the commercial plant into a producing plant that is further developed to bring forth higher efficiency.

During 2007 and the first part of 2008, the Company commenced the testing of the Plant and, once set-up in Soma, implemented a number of minor adjustments and refinements, based on the limited production runs of coal through the Plant.

There being no other such Plant known to MPAC, many if not all of the issues that arose during the testing period had to be solved in-house. This has resulted in a significant amount of Plant downtime. The Company continued with limited production and refinement to the Plant until the identified issues were reduced to just a few that continued to occur on a repeated basis.

It must be noted that, during the testing stage, the integrity of the Canadian technology was further proved out. Every tonne of coal processed through the technology has resulted in substantial upgrading. What is even more impressive is that the refined coal to tailings ratio is much more favorable than what we had factored into the initial start-up corporate business plan.

The Company is now at a stage where it has identified that, in order to move into the stage of meaningful commercial production, two areas of the Plant need additional work.

The first is the screening component where the raw coal feedstock and the initial fluidization occurs to feed the Canadian technology. It has become apparent that a different screening processing is required. The Company is currently in discussions with the Turkish manufacturer of the existing screening unit, which is not performing to specification on Turkish coal, to remove this particular unit and replace it with a different screening component. As previously discussed, MPAC purchased a "turn-key" coal processing circuit from this manufacturer. The Company continues to work with this manufacturer to jointly solve this issue to our mutual satisfaction.

The second issue is the dewatering unit that is designed to receive both the refined coal and the tailings flow. The Company has advised the Turkish manufacturer that the dewatering unit that was previously built and installed in our circuit does not meet the original needs of the Plant and, accordingly, that particular unit will need to be removed. The Company is very pleased to report that an alternate dewatering system has been identified and negotiations are proceeding to have this dewatering system installed on a trial basis to test its efficacy.

In order to accommodate this equipment replacement, the Plant has been temporarily shut down once again. Basic maintenance will be performed to insure the continued Plant integrity while waiting for the new screening unit and dewatering system to arrive and be installed. The Canadian technician, who has been overseeing the Plant in Turkey through this testing process, has returned to Vancouver to report first hand to MPAC management on the various Plant issues and participate in the going forward decisions. This technician will return to the Plant in the coming weeks to incorporate the aforementioned changes and gear up for the anticipated commercial production.

In the interim, it is very important to note that the Canadian technology has been performing as expected, and at times, even better than expected. The challenge is to now complete the seamless integration of the refining component into the overall Plant circuit in order to move from this stage of limited production into generating the projected forecast production rates and corresponding profits.

The Company anticipates that with the installation of the new screening unit and dewatering equipment, daily production can be achieved which will result in a respectable positive cash flow to the Company, thus enabling the Company to not only plan for future expansion, but to record profits from the Soma Plant operations.

As always, the Company very much appreciates the ongoing patience and support of its shareholders as it progresses from an academic visionary to a full-scale coal refining producer.

The Company is also pleased to announce that it has concluded negotiations for a non-brokered private placement of a maximum of 3,500,000 units (the "Offering") at a price of eight cents ($0.08) per unit.

Each unit (a "Unit") is comprised of one (1) common share of the Company (the "Share") and one (1) non-transferable, one year, share purchase warrant (the "Warrant"). Each Warrant entitles the holder thereof to purchase one (1) additional Share of the Company at a purchase price of twelve cents ($0.12).

The Offering is on a non-brokered basis, and the proceeds from the Offering will be used for general working capital and to advance the Company's proposed coal refining activity in Turkey. The Company may, in appropriate circumstances, pay up to a ten percent (10%) finder's fee in cash or Shares.

Subject to interest from outside placees, the insiders, management, and/or consultants may subscribe for more than twenty-five percent (25%) of the Offering and may subscribe for up to one hundred percent (100%) of the Offering.

The Offering is subject to acceptance by the securities regulatory authorities.

This News Release contains forward-looking statements, which are based on MPAC Industries Corporation current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. The forward-looking statements are not guarantees of future performances and undue reliance should not be placed on them. Actual results may differ materially as a result of any number of factors and uncertainties, many of which factors are beyond the Company's control. MPAC Industries Corporation undertakes no obligation to revise any forward-looking statements except as required by applicable securities laws.

BY THE ORDER OF THE BOARD

Firoz Lakhani, President & CEO

The TSX Venture Exchange neither approved nor disapproved the contents of this news release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.

Contact Information

  • MPAC Industries Corporation
    J. Richard W. Hall
    Investor Relations
    (604) 644-2244
    Website: www.mpacindustries.com