MagMinerals Potash Updates a Group of International Development Banks and Export Credit Agencies and Signs Contracts to Further its Potash Project in the Republic of Congoadmin
MagMinerals Potash Corp, a subsidiary of MagIndustries report that on October 9-10th it engaged in two days of meetings organized by its debt funding financial adviser, BNP Paribas, to update a group of international lenders with respect to its planned Kouilou Potash mining and processing plant (the “Project”) in the Republic of Congo (“ROC”). The ten banks in attendance, all sovereign supported Development Finance Institutions (DFI’s) and Export Credit Agencies (ECA’s), have been relatively untouched by global credit issues and continue to pursue their mandates which include support of economic development in Africa and/or their national exporters, who expect to have involvement in the Kouilou Project. These banks continue to commit resources to the financial structuring of the Project in support of the concept of debt funding 70% of capital requirements.
The Project is located 25km from the port city of Pointe Noire, ROC. The Project is intended to be built in two phases, Phase 1 and Phase 2, with each module specified at 600,000 tonnes per year (tpy) for a total capacity of 1.2 million tpy of potash.
On October 10, 2008, MagMinerals signed a Euros12 million contract with Foraco International S.A., a global drilling services company based in France. The twenty-four month contract is for the drilling of the first of 50 production wells required for the development of solution mining caverns to feed potash rich brine to the Project. Two drilling platforms and all related equipment are scheduled to arrive in Pointe Noire on November 12, 2008 and to commence operations on November 29, 2008. All the permits, licenses and approvals for the drilling program have been obtained from the government of the ROC.
MagPotash also reports that it signed two contracts on October 24, 2008 with the ROC based construction company, Socofran S.A., totaling CDN $8 million. Under these contracts Socofran will demolish two existing warehouses on MagPotash’s leased area in the port of Pointe Noire and build two new structures in their place. Additionally, Socofran will remove eucalyptus stumps and a layer of surface sand from the proposed site of the proposed Kouilou Potash processing plant.
On October 17, 2008, MagPotash signed an umbrella agreement with Panalpina, one of the world’s leading providers of freight forwarding and logistics services to manage the importation of materials and equipment into Pointe Noire.
About the Project:
A previously released technical report prepared by Ercosplan Ingenieurgesellschaft Geotechnik und Bergbau mbH (“Ercosplan”) and announced on August 21, 2008, indicated a NI 43-101 compliant estimate of proven and probable reserves of 33.5 million tones of KCl which are sufficient to support 28 years of production at a rate of 600,000 tonnes of K60 potassium chloride (KCl) for the first two years of production and 1,200,000 tonnes of K60 KCl per year for the remaining 26 years. At a production rate of 600,000 tonnes of K60 per year the KCl reserves are adequate for a Project lifetime of 54 years. At a production rate of 1,200,000 tonnes of K60 per year the KCl reserves are adequate for a Project lifetime of 27 years. These reserves lie within a 25 square kilometer (sq km) portion of the 136 sq km Mengo Exploitation Permit which was granted in March 2008. The study area represents approximately 18% of MagPotash’s Mengo Exploitation Permit area of 136 sq km. MagPotash retains exclusive rights to a further 1,472 sq km of potentially developable area through the Makola Exploration Permit. The Ercosplan report is available on SEDAR at www.sedar.com.
MagPotash currently holds in excess of CDN$100 million in cash.
As announced in its press release of September 29, 2008 MagIndustries is reviewing equity financing strategies for MagPotash and has retained Morgan Stanley as financial advisor to assist with this process. MagIndustries effectively holds 68.7% interest in MagPotash.
About MagIndustries Corp.:
MagIndustries Corp. is a Canadian company whose common shares are listed on the TSX-V Exchange and trades in Canadian currency under the symbol “MAA”. The Company has 197,514,016 shares outstanding on an undiluted basis. MagIndustries’ wholly owned resource subsidiaries are operating and developing major industrial projects in the Republic of Congo (ROC) and the Democratic Republic of Congo (DRC).