TORONTO, ONTARIO--(Marketwire - Sept. 2, 2010) - On December 29, 2008, MagIndustries Corp. ("MagIndustries" or the "Company")(TSX:MAA) reported that it and its subsidiary, MagMinerals Potasses Congo S.A. ("MPC"), signed a comprehensive agreement with the government of Republic of Congo ("ROC"), referred to as the Potash Investment Agreement ("PIA") (also referred to within the ROC as the Convention d'Exploitation Miniere). The PIA addresses all aspects of the Company's planned Mengo Potash Project (the "Project") near the ROC port city of Pointe-Noire, including key fiscal and development terms. MagIndustries is pleased to report that it has now received verbal communication from ROC government officials that the PIA was passed into law by the National Assembly and the Senate of the ROC on August 30, 2010. The Company expects to receive written confirmation imminently of the parliamentary act voting the PIA into law, which will be followed by an official publication in the "Journal Officiel", the gazette published by the ROC government containing all governmental decisions and announcements.
When the Company entered into the PIA, the PIA was a binding legal agreement between the Company and the government of the ROC. Having the PIA confirmed as law provides MagIndustries with additional assurance that the benefits and features conferred by the PIA will be maintained through the life of the Project and will have a status equal to other legislation governing the development and value creation from Congolese resources. The passage of the PIA into law is a unique step in the history of the ROC confirming the importance it places on the Project and confirming to the Company the ROC's merits as a country for resource investment.
The PIA is an umbrella agreement that covers a series of understandings and agreements between the parties in respect of a number of operational aspects of the Project. The PIA addresses the following needs of the Project:
- Access to water - The solution mining process to be used by the Project will require a significant volume of water and the PIA grants access to sufficient quantities of water from rivers, streams and aquifers located within the boundaries of the Mengo Exploitation Permit.
- Rail/track access - The Project will require the use of a portion of the rail and track owned and operated by a third party for the shipment of product from the plant site to the port of Pointe-Noire. The PIA guarantees access to this railway. In January 2009, an access agreement was executed with the owner/operator of the railway which allows for the transportation of potash and all products manufactured by the Project between the Project site and the port for a period of 25 years and which is renewable by mutual agreement of the parties.
- Port infrastructure and shipping - The Project will require storage space at the port as well as bulk loading facilities and docking rights for shipping of potash. The PIA includes access to all necessary port facilities and/or the right to construct the necessary facilities.
- Gas supply - The Project is expected to require a significant supply of gas for process heat and generation of electricity. The gas is the property of the government of the ROC and is flared as there is currently no market realizable value. MPC has entered into the Gas Supply Agreement with Eni Congo S.A. for the supply of gas to the Project. The agreement is based on a contracted supply of associated gas from Eni Congo S.A. which operates the on-shore M'boundi oil field. Eni Congo S.A. will supply the gas from its treatment plant to be located in Djeno, approximately 25km southwest of the Project. The gas supply is expected to support all of the requirements of the potash processing plant. Additional gas quantities will also be made available to support the Project's back-up power facilities if the electricity supply fails.
- Rights of way for construction of the Project - The PIA provides the necessary permitting for construction of the solution mine, process plant and the natural gas and water supply pipelines and the spent brine pipeline.
- Fiscal conditions - The PIA sets out the fiscal terms for the Project's operation in the ROC including the ROC government's share of the ownership in MPC, the length of holidays on both the royalty and corporate taxes, and other fiscal conditions for import, export and in-country levies. It also addresses repatriation of profits and duty exemptions.
The PIA also includes the environmental and social impact study which has been ratified by the government of the ROC and sets out the on-going obligations of the Project with respect to environmental and social monitoring and actions during the construction, operation and eventual closure of the Project.
The PIA includes the necessary licenses and permits for the construction of the Project, the exploitation of the mine and operation of the process plant. The PIA provides the rights to establish operating companies in-country, and allows MPC to take any action it deems necessary to design, build and establish operations in-country, as well as addressing procedures, processes, documentation, permitting systems and administration requirements in-country.
The PIA further outlines the terms in respect of export of final product, commercialization of the production on the open markets and allows MPC to execute any agreement with third parties it deems necessary for the good execution and operations of the Project including labour agreements and freedom to hire internationally, subject to implementation of training programs for and priority placement of qualified and competent Congolese nationals or residents. The PIA also provides MPC the freedom to establish all communications, security and other modalities deemed necessary for safe and economic operation in the ROC.
About MagIndustries Corp.
MagIndustries is a Canadian company whose common shares are listed on the TSX and trades in Canadian currency under the symbol "MAA". The Company has 418,362,462 shares outstanding on an undiluted basis. 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.

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