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MagIndustries Corp.: MagIndustries Reports Progress Toward Closing Investment by Sinohydro

^{Published on 2009-09-24 04:11:20 - Market Wire}
 

TORONTO, CANADA--(Marketwire - Sept. 24, 2009) - MagIndustries Corp. ("MagIndustries" or the "Company") (TSX VENTURE:MAA) is pleased to announce that the counterparty to the Memorandum of Understanding (the "MOU") signed and disclosed on June 12, 2009 is Sinohydro Corporation Limited ("Sinohydro" or the "Subscriber").

The MOU provides for a proposed purchase of 400 million common shares of MagIndustries by the Subscriber at a price of CDN$ 0.70 per common share (the "Investment"). Senior officers of MagIndustries and Sinohydro met this week in Beijing and have agreed to work toward the signing of all documentation in respect of the Investment by October 30, 2009. Closing of the Investment will then take place thereafter following receipt of all required approvals, including regulatory approval and approval of the Company's shareholders.

Bill Burton, MagIndustries' CEO said, "We are very pleased that such an internationally sophisticated and capable company as Sinohydro is interested in MagIndustries. We see their interest as a confirmation of the globally competitive quality of our potash resource and an endorsement of the host jurisdiction of our potash development, the Republic of Congo ("ROC"). Beyond potash, Sinohydro will be a uniquely synergistic partner for us as we pursue development opportunities in our MagEnergy division. Looking beyond our Phase 1 turbine rehabilitation project of the INGA II hydroelectric facility in the Democratic Republic of Congo, which we expect to complete in the coming months, we see significant further power development opportunities in Central and Sub-Saharan Africa which would become highly addressable with Sinohydro as a major shareholder."

Mr. Du Nan, Deputy Managing Director of Sinohydro, added, "Sinohydro sees a very clear alignment of its interests with MagIndustries and at a successful conclusion of our decision process would look forward to supporting the fulfillment of MagIndustries' potential."

Normal business processes in the People's Republic of China ("PRC") will be suspended for a 10 day period, beginning on October 1st, National Day, as China celebrates the 60th anniversary of the founding of the PRC. This delay plus the time required to complete the negotiation of various conditions precedent to the Investment, most notably Sinohydro supported debt arrangements as part of the financial plan for the construction of the Company's Kouilou Potash Project in the ROC, the timing of Sinohydro internal approval processes and PRC Government approval processes for a foreign investment are all factors in MagIndustries' decision to extend the exclusivity provided to Sinohydro under the MOU to October 30, 2009.

Mr. Burton stated further, "While we acknowledge the frustration of our shareholders that we have not been able to announce a completion of the Investment on the previously announced timeline, we are impressed and encouraged by the commitment and energy demonstrated by all parties as we work through the complex Sinohydro and PRC investment decision processes."

Sinohydro is one of the world's leading companies in the water conservation and hydropower industries. Its strength is comprised of a group of 10 holdings companies, and a network of seventeen wholly-owned subsidiaries. Sinohydro also has an international network of 42 overseas branch companies and representative offices.

Sinohydro, one of the world's largest builders and operators of power generation facilities, has developed into a large diversified group based on its leadership in excavation, earthmoving, underground structures, dredging and reclamation projects which promote the "SINOHYDRO" brand in the global construction market. With operations worldwide, it holds a leading position in building, civil infrastructure, mechanical and electrical plant manufacturing and installation. Today, the Group ranks 50th in the Top 225 International Contractors listing by the Engineering News Record and stands in 4th place among Chinese contractors in term of overseas revenues. Sinohydro's diversified company interests extend to mineral resources, including potash, managed by its Sinohydro Mineral Resource Group. Sinohydro reported US$9 billion in revenue in 2008.

About MagIndustries Corp.

MagIndustries is a Canadian company whose common shares are listed on the TSX-Venture Exchange and trades in Canadian currency under the symbol "MAA". The Company has 359,852,462 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. More information on the Company is available at 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, 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.

"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.

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