EDITOR: | July 2nd, 2014

MagIndustries Corp.: Update of the NI 43-101 Technical Report for MagMineral’s Mengo Permit Area, Kouilou Region, Republic of Congo

| July 02, 2014 | No Comments
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July 2, 2014 (Source: Marketwired) — MagIndustries Corp. (“MagIndustries” or the “Company”) (TSX:MAA) today announced that it has filed an update to its National Instrument 43-101 Technical Report entitled Update of the NI 43-101 Technical Report for MagMineral’s Mengo Permit Area, Kouilou Region, Republic of Congo (the “Technical Report”) in respect of the property owned by its 90% owned subsidiary MagMinerals Potasses Congo SA. (“MPC”), previously described in the Company’s press release of November 14, 2013. The Technical Report relates to the geology and development of the Company’s proposed 1.2 million tonnes K60 product per annum Mengo Potash Project in the Republic of Congo (the “Project”). The authors of the Technical Report are EurGeol Dr. Henry Rauche, EurGeol Dr. Sebastiaan van der Klauw, and EUR ING Ralf Linsenbarth of ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH (collectively “ERCOSPLAN”).

The update announced today arises because during the preparation of the original technical report incorrect information was provided to ERCOSPLAN with respect to energy costs, a key input to calculating operating costs and therefore a material factor in determining the economic merits of the Project. Specifically, energy costs were overstated in the original technical report announced on November 14, 2013 because of a double counting of the natural gas requirement for process heat and on-site co-generation of electricity. On the basis of the data then available operating costs before sustaining capital expenditures were estimated to be US$109.81 per tonne of production. On the basis of the corrected data operating costs are estimated to be US$75.97 per tonne.

Estimated Operating Expenditures

As reported in the Company’s press release dated November 14, 2013, the annual operating expenditures (“OPEX”) for full production had been previously estimated at US$131.8 million annually for the production of 1.2 mtpy of a K60 product. The corrected estimate of OPEX for full production is US$91.16 million annually for the production of 1.2 mtpy of a K60 product. This equates to approximately US$76/tonne of KCl. These operating costs include estimates for labour, maintenance, power and steam generation, consumables, diesel, product transport to port and indirect OPEX. Sustaining capital expenditures have been estimated for the operation at US$4.6 million annually or approximately US$3.83/tonne.

Assuming a nominal discount rate of 10%, the economic analysis based on the corrected OPEX estimate yielded a pre-tax Net Present Value (NPV) of US$1.607 billion; an after-tax project NPV of US$1.303 billion with an Internal Rate of Return (IRR) of 24.4% before tax and 23.5% after tax; and a payback period within 9 years of project start (or Year 8 of production), based on potash prices of US$380/tonne FOB. These metrics were previously reported as an NPV of US$1.263 billion before tax and US$1.002 billion after tax; and an IRR of 21.6% before tax and 20.6% after tax; with payback achieved within year 10 of the Project considering discounted cash flows.

The Technical Report has been filed on www.sedar.com under the Company’s profile. Other than the information referred to above the Technical Report remains unchanged from that which was announced in the Company’s November 14, 2013 press release. This press release provides only a summary of the information set forth in the Technical Report and readers should review the full Technical Report for additional information.

The authors of the Technical Report, EurGeol Dr. Henry Rauche, EurGeol Dr. Sebastiaan van der Klauw, and EUR ING Ralf Linsenbarth of ERCOSPLAN are the Qualified Perons with respect to the Technical Report and have reviewed and approved the contents of this press release.

About MagIndustries Corp.

MagIndustries is a Canadian company whose common shares are listed on the TSX and trade in Canadian currency under the symbol “MAA”. The Company has 755,942,674 common shares outstanding. MagIndustries is focused on the development of its potash assets in the Republic of Congo. More information on the Company is available on 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, country policy and political risks, currency exchange risk, changing market conditions, force majeure events, and other risks detailed from time-to-time in the Company’s ongoing filings. The “Update of the NI 43-101 Technical Report for MagMineral’s Mengo Permit Area, Kouilou Region, Republic of Congo” referred to in this press release includes certain statements and information that contain forward-looking information within the meaning of applicable Canadian securities laws. All statements, other than statements of historical facts, including the requirements and potential output of the Project, the likelihood of commercial mining, the likelihood of securing a strategic partner and the ability to fund future mine development are forward-looking statements and include forward-looking information. Such forward-looking statements and forward-looking information specifically include, but are not limited to, statements concerning: the Company’s plans at the Project; the Company’s ability to fund the Project; the timing of granting of key permits; approval of the Environmental Impact Statement (EIS); the estimated potash production and the timing thereto; economic analyses; capital and operating costs; mine development programs; future potash prices; cash flow estimates; and economic indicators derived from the foregoing.

Forward-looking statements are based on the opinions and estimates set out in the Technical Report as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements or forward-looking information, including: the receipt of all necessary approvals; the ability to conclude a transaction; uncertainty of future production; capital expenditures and other costs; financing and additional capital requirements; the receipt in a timely fashion of any further permitting for the Project; legislative, political, social or economic developments in the jurisdictions in which the Company carries on business; operating or technical difficulties in connection with mining or development activities; and the risks normally involved in the exploration, development and mining business.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required under the Company’s continuous disclosure obligations. In light of these risks, uncertainties and assumptions, the forward-looking events in this press release might not occur.


Raj Shah

Editor:

Raj Shah has professional experience working for over a half a dozen years at financial firms such as Merrill Lynch and First Allied Securities Inc., ... <Read more about Raj Shah>


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