MagIndustries Corp. (the "Company") (TSX VENTURE: MAA) is pleased
to announce that it has filed an updated National Instrument 43-101
("NI 43-101") compliant technical report entitled "Updated Reserve
and Resource Estimate for MagMinerals Kouilou Potash Project,
Republic of Congo" dated June 10, 2009 (the "2009 Technical
Report") in respect of the property held by its wholly-owned
subsidiary MagMinerals Potash Corp. The Technical Report updates
the 43-101 technical report filed on December 1, 2008 (the "2008
Technical Report").
The 2009 Technical Report updates a number of areas in the 2008
Technical Report including, but not limited to:
- A minor decrease in the total reserve and resource estimates
as a result of a change in the area available for the brinefield as
a result of the finalization of the land use and occupation
survey.
- The 2009 Technical Report indicates proven and probable
reserves of 33.2 million tonnes of potash which can support a
reserve life of more than 54 years at a projected production rate
of 600,000 tonnes per year. The 2009 Technical Report estimates
proven reserves of 151.2 million tonnes of carnallitite, at a
carnallite grade of 64.4% of ore and a KCl grade of 17.3% of ore,
concluding with proven reserves of 26.1 million tonnes of KCl. The
2009 Technical Report further estimates probable reserves of 40.3
million tonnes of carnallitite, at a carnallite grade of 65.7% of
ore and a KCl grade of 17.6% of ore, concluding with probable
reserves of 7.1 million tonnes of KCl.
- This compares to the 2008 Technical Report which indicated
proven and probable reserves of 33.5 million tonnes of potash which
could support a reserve life of more than 54 years at a projected
production rate of 600,000 tonnes per year. The 2008 Technical
Report estimated proven reserves of 155.0 million tonnes of
carnallitite, at a carnallite grade of 64.2% of ore and a KCl grade
of 17.2% of ore, concluding with proven reserves of 26.7 million
tonnes of KCl. The 2008 Technical Report further estimated probable
reserves of 33.2 million tonnes of carnallitite, at a carnallite
grade of 63.9% of ore and a KCl grade of 17.2% of ore, concluding
with probable reserves of 6.8 million tonnes of KCl.
- An increase in the estimated capital expenses of Phase 1 of
the Kouilou potash project from US$723 million to US$835 million
due, in part, to the inclusion of the 26 km gas pipeline between
the Djeno gas treatment plant and the Kouilou project site, an
increase in material costs (mainly an increase in the price of
steel), and an increase in the indirect costs.
- An increase in estimated operating expenses of Phase 1 of the
Kouilou potash project from US$83 per tonne of K60 to US$124 per
tonne of K60 resulting from, among other things, an increase in the
cost of natural gas, based on the finalization of a fixed-price
(US$1.20/million BTU), 13-year gas supply agreement.
- An increase in the assumption of the base potash price for
2012 of US$649 from US$464 net realized price per tonne of KCl
(based on current third-party potash price forecasts).
The overall recommendations of the authors of the 2009 Technical
Report remain unchanged and they conclude that, using the base
case, the Kouilou potash project's internal rate of return is
estimated at 23% with the net present value estimated at US$914
million using a discount rate of 12%. Assuming total project costs
of US$1.2 billion, pay back is achieved in approximately five
years, assuming cumulative cash flows from operations for the
period 2012 to 2016.
Clarification
In connection with the review by the Ontario Securities
Commission (the "OSC") of the Company's amended and restated
preliminary prospectus filed with the OSC and certain other
provincial regulatory authorities on June 2, 2009, the Company has
been requested to issue a press release in respect of certain of
its previous disclosure relating to the Kouilou potash project (the
"Project").
Specifically, the OSC has noted that certain of the Company's
previously filed continuous disclosure documents did not include
the grade information for each category of mineral resource and
reserves in accordance with Section 2.2(d) of NI 43-101. In
particular, the information contained in news releases of the
Company dated December 29, 2008, March 26, 2009 and April 16, 2009,
in the management's discussion and analysis of financial results
for the year ended December 31, 2008, in the annual information
form for the year ended December 31, 2008 dated May 27, 2009 and on
the Company's website, which disclosed potash resource and reserve
estimates without also stating the grade or quality and quantity
for each category of the mineral resource and mineral reserve and
is expressly prohibited by NI 43-101. Accordingly, such information
should not be relied upon.
The Company hereby confirms that its current mineral resource
and mineral reserve estimates at the Kouilou potash project are as
set out in the following excerpt taken from the 2009 Technical
Report filed on SEDAR at www.sedar.com on June 11, 2009.
The estimated resources of each category for Horizon 1, Horizon
2, Horizon 3 and Horizon 4 are presented in the table below.
Already excluded from these resources are areas with geological and
technical exclusion zones (approx. 35 % reduction) and mining
losses assuming the use of a solution mining method have also been
accounted for.
-----------------------------------------------------------------------
Horizon 1 Horizon 2 Horizon 3 Horizon 4 Total
-----------------------------------------------------------------------
Measured resources
Million tonnes of
carnallitite - 38.1 22.4 86.2 146.7
Carnallite grade of
ore (%) - 44.2 90.0 67.4 64.9
KCl grade of ore (%) - 11.8 24.1 18.1 17.4
Million tonnes of KCl - 4.5 5.4 15.6 25.5
-----------------------------------------------------------------------
Indicated resources
Million tonnes of
carnallitite - 9.2 5.4 24.9 39.5
Carnallite grade of
ore (%) - 44.8 89.3 68.9 66.1
KCl grade of ore (%) - 12.0 23.9 18.5 17.7
Million tonnes of KCl - 1.1 1.3 4.6 7.0
-----------------------------------------------------------------------
Inferred resources
Million tonnes of
carnallitite 427.6 191.9 113.7 482.5 1215.7
Carnallite grade of
ore (%) 63.6 44.1 90.0 66.3 64.1
KCl grade of ore (%) 17.1 11.8 24.1 17.8 17.2
Million tonnes of KCl 73.0 22.7 27.5 85.8 209.0
-----------------------------------------------------------------------
The estimated reserves of each category for Horizon 2, Horizon 3 and
Horizon 4 are presented in the table below.
-----------------------------------------------------------------------
Horizon 2 Horizon 3 Horizon 4 Total
-----------------------------------------------------------------------
Proven reserves
Million tonnes of
carnallitite 39.3 22.4 89.5 151.2
Carnallite grade of
ore (%) 44.2 90.0 67.1 64.4
KCl grade of ore (%) 11.8 24.1 18.0 17.3
Million tonnes of KCl 4.6 5.4 16.1 26.1
-----------------------------------------------------------------------
Probable reserves
Million tonnes of
carnallitite 9.2 5.4 25.7 40.3
Carnallite grade of
ore (%) 44.5 89.4 68.2 65.7
KCl grade of ore (%) 11.9 24.0 18.3 17.6
Million tonnes of KCl 1.1 1.3 4.7 7.1
-----------------------------------------------------------------------
The authors of the Technical Report, Dr. Henry Rauche and Dr.
Sebastiaan van der Klauw, are the qualified persons with respect to
the technical reporting and have reviewed and approved the contents
of this press release.
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 approximately 288,079,962
shares outstanding on an undiluted basis. MagIndustries' resource
subsidiaries are operating and developing major industrial projects
in the Republic of Congo and the Democratic Republic of Congo.
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, changing market
conditions, and other risks detailed from time-to-time in the
Company's ongoing filings. We undertake no obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. In light of
these risks, uncertainties and assumptions, the forward-looking
events in this press release might not occur.
Cusip: 55917T 102
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: MagIndustries Corp. Mr. Rich Morrow Executive
Vice-President 416-368-7911 rmorrow@magindustries.com MagIndustries
Corp. Mr. William Burton President and Chief Executive Officer
416-368-7911 bburton@magindustries.com
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