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Message: Announces 2008 Year End Results
| April 16, 2009 |
| MagIndustries Corp. Announces 2008 Year End Results |
| TORONTO, ONTARIO--(Marketwire - April 16, 2009) - MagIndustries Corp. (TSX VENTURE:MAA) ("MagIndustries" or the "Company") is pleased to provide shareholders with the results of its operations for the year ended December 31, 2008 and with an update on corporate developments. 2008 was a pivotal year for MagIndustries as a number of key milestones were achieved that position the Company to capitalize on our portfolio of major resource assets in Africa. Looking ahead, we intend to build on this solid momentum to generate real value for our shareholders over the long term. The management discussion and analysis and financial statements can be viewed on SEDAR at www.sedar.com, and shareholders or interested parties are encouraged to review the complete financial statements for further details. A summary of key financial and operating results for the year follows. Key milestones 2008 was a transformational period for the Company as a number of important milestones were achieved in all of our targeted businesses. We are very proud of the significant progress made during the year, and we look to build on this momentum during 2009 and further into the future. - MagMinerals Potasses Congo S.A. signed a comprehensive agreement with the government of Republic of Congo ("ROC"), referred to as the Potash Investment Agreement ("PIA"). The PIA addresses all aspects of the Company's planned Kouilou potash project in the Mengo area near the ROC port city of Pointe-Noire, including key fiscal and development terms. - MagMinerals Potash Corp. completed private placements of subscription receipts raising gross proceeds of CAD$182 million to advance the development of the Kouilou potash project. - The Company increased its Kouilou potash project estimated proven and probable reserves to 33.5 million (previously 21.0 million) tonnes of KCl which are sufficient to support 28 years of production at a rate of 600,000 tonnes of K60 potassium chloride (KCl) per year for the first two years of production and 1,200,000 tonnes of K60 KCl per year for the remaining 26 years. - Subsequent to the year end, in March 2009, MagMinerals signed a gas supply agreement for the Kouilou potash project. The agreement represented the last significant cornerstone contract required for the full development of the project. - MagForestry commissioned a new, state-of-the-art wood chip plant in July and transitioned the division from the supply of round logs to higher margin wood chip production. - MagEnergy completed approximately 90% of the work necessary to refurbish turbine G23, the first contract at the INGA hydro plant (Phase I). - MagMetals acquired and successfully evaluated the application of the commercially proven Norsk Hydro magnesium electrolytic extraction technology. Financial results MagIndustries recorded total revenue of US$ 30.2 million and cash and cash equivalents of US$ 91.5 million at December 31, 2008. Net earnings were negative US$ 55.8 million for the 2008, compared to negative US$ 18.4 million for 2007. The lower net earnings are largely due to: - Non-cash stock based compensation expense of US$ 15.4 million relating to the fair value of the stock options vested during the year. - the appreciation of the US dollar relative to the Euro and Canadian dollar which negatively affected earnings by US$ 9.8 million; - Write offs of US$ 7.7 million of project evaluation and development expenditures that were previously deferred; - Additional costs associated with MagForestry's conversion from shipping whole logs to constructing a chip plant and selling wood chips; - Expenses related to advancing the Company's projects which were not capitalized, and; - Interest expense of US$ 1.8 million where interest expense was not incurred in the prior year. A Promising Future: Clearly, MagIndustries has made significant progress in 2008 as the Company moved forward with programs to generate value from our resource assets. Despite the challenging business and credit conditions currently existing worldwide, we remain confident in our ability to build on this momentum and execute on our programs and strategies over both the short and long term. - The Company is continuing to advance and develop its Kouilou potash project. To finance the necessary expenditures for this development, the Company is expecting to utilize cash on-hand, debt financing and/ or joint venture participation, or a combination thereof, depending upon prevailing market conditions at the time. The potash plant is projected to produce potash fertilizers principally to supply growing agricultural demand in South America, South Africa and other parts of the world. - MagForestry will benefit from a full year of chip production, and will examine ways to enhance the operating efficiency of both the forestry and wood chip operations. With improving economics in the international market for wood chips the Company is confident that steadily enhanced returns on investment can be achieved. Finally, additional expansions of the area under forestry cultivation are planned to maximize available capacity at the chip production facility. - MagEnergy is close to completing its initial Phase I refurbishment project and the sale of the energy generated from that project will make a solid contribution to the Company's results. Revenues from the sale of 84MW, representing 50% of the fully restored 168MW capacity, will potentially be generated by late 2009. - MagMetals plans to begin a feasibility study for the establishment of a magnesium plant adjacent to the MagMinerals potash facility. MagMetals envisions being in production by the end of 2014 at a planned production rate of approximately 60,000 tonnes annually, meeting growing demand from the global automotive, aluminum and steel industries. Conference call A conference call for shareholders, analysts and other members of the investment community has been scheduled for Friday April 17, 2009 at 10:00 a.m. Eastern Time to discuss the financial results and provide updates on operations. To participate in the conference please call the numbers listed below approximately five minutes prior to the scheduled start of the call. - Toll-free within North America: 1-888-396-8049 - For local and overseas calling: 1-416-764-8685 A recording of the call will be available through April 21. Please dial 1-877-674-6060 (Toll-free) or 1-416-764-8691 (Local) and enter the PIN number 98385 followed by the number sign to listen to the playback. |
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