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MagEnergy Concludes INGA II Rehabilitation Agreement
Tuesday May 31, 9:27 am ET
HALIFAX, Canada--(BUSINESS WIRE)--May 31, 2005--MagEnergy Inc., a wholly owned subsidiary of MagIndustries Corp. (TSX VENTURE:MAA.U - News) is pleased to announce the signing of an Agreement with Societe Nationale d'Electricite (SNEL), the owner and manager of the INGA Hydro-electric facility in the Democratic Republic of Congo.
This definitive Agreement describes the investment and operating procedure under which MagEnergy will initiate the project by rehabilitating four turbines currently installed at the Inga II Hydroelectric Station on the Congo River in the Democratic Republic of Congo (DRC).
MagEnergy's primary endeavour of the Rehabilitation Agreement will be to generate returns from sales of electrical power into existing national and international grids and to allocate part of the electricity generated for MagMetals Inc's magnesium smelter to be located 200km west of Inga at the deep-water port city of Pointe-Noire in the Republic of Congo.
The Agreement is exclusive to MagEnergy and represents the first and only agreement of its kind that SNEL has ever entered into. The Agreement has received all authorizations as prescribed by the DRC regulations and specifically has been approved by SNEL's Management Committee, the Minister of Energy and the Minister of Public Enterprises.
His Excellency, the Minister Energy for the DRC Mr. Pierre Muzyiumba, said in Kinshasa; "This Rehabilitation Agreement marks a crucial step in the expansion of our energy production to meet the growing needs of Congo and those of the Central and Southern African region" The President of SNEL, Vika Di Panzu, also remarked about the Agreement saying, "We are very pleased that after many years of discussions we can now plan on the successful rehabilitation of our country's most important energy installation. We look forward to working with MagEnergy to maximize the utilization of Inga and the delivery of electricity to MagMetals, an important new industrial consumer in our region."
The President of MagEnergy, Mr. Stephane Rigny also remarked, "This is a business development milestone for our company which will set the foundations for a long and successful future."
Mr. Di Panzu explained that "Inga is the largest single hydropower initiative in the world with a potential to reach 50,000 megawatts (MW) of electricity. Today Inga currently consists of two stations, Inga I (6 turbines of 52 MW each) and Inga II (8 turbines of 178 MW each), for a total installed potential of 1774 MW. Due to years of low demand and low maintenance budgets Inga I and II currently produce only about 700 MW. Rapidly expanding energy demands, both nationally and internationally, have lead to the conclusion of this important Rehabilitation Agreement but have also lead to plans for the development of Inga III (3,500 MW) and an initial stage of the "Grand Inga" (29,000 MW). The INGA site can be expanded at a relatively low cost and without any significant environmental impact due to consistently high water volumes and the "run-of-river" type of installation."
MagEnergy has already begun a technical program which will precede a Bankable Feasibility Study and that includes the review of an extensive number of previously completed technical studies and reports involving Inga. MagEnergy envisions a rehabilitation program which may include the preliminary start-up of one turbine followed by the sequential rehabilitation of the three other turbines. MagEnergy plans to have first energy revenues in 2006 and to have all four turbines, totalling 720 MW, in full production by 2009.
Initial funding for the Inga Rehabilitation has been allocated from the parent company, MagIndustries, while full project funding is under discussion with several interested investor groups and banks. MagEnergy is now in the process of opening offices in Kinshasa from which to direct the Inga Rehabilitation Program.
To facilitate energy transmission to MagMetals Kouilou Magnesium plant site MagEnergy entered into a consortium agreement last year whereby CTEI (Consortium pour le Transport d'Energy d'INGA) would construct a new electrical transmission line to connect INGA with Pointe-Noire. This agreement was signed between MagEnergy, Investec Bank, Trans Africa Projects ("TAP"), and the PEAC (Pool Energetique de l'Afrique Centrale or Central African Power Pool). PEAC is a regional body empowered by its member countries to facilitate cross-border transmission projects. The agreement identifies MagEnergy as lead sponsor of the project, Investec Bank as exclusive lead arranger and TAP as the engineering, procurement, and construction contractor and operator of the Transmission Project. TAP is 50% owned by Eskom (the South African state electrical utility) and 50% owned by Fluor Ltd.
About MagIndustries Corp.:
MagIndustries' three wholly owned subsidiaries are proceeding with the development of major industrial projects in the Republic of Congo (ROC) and the Democratic Republic of Congo (DRC). MagEnergy Inc. is a leading participant in the rehabilitation of the Inga Hydro-electric station on the Congo River in the DRC. MagMinerals Inc. plans to develop a 300,000tpy potash (fertilizer) plant at Pointe-Noire which may also include the production of salt and calcium chloride. MagMetals Inc. is planning the development of a 60,000tpy magnesium smelter adjacent to the potash plant for the production of magnesium alloys for the global automotive industry. The raw materials for the MagMinerals and MagMetals plants will be sourced from MagIndustries' 100% owned magnesium and potash salt deposits near Pointe-Noire in the ROC.
MagIndustries Corp. is a Canadian company whose common shares are listed on the TSX Venture Exchange and are traded in U.S. currency under the symbol "MAA.U". The Company has 90,040,248 shares outstanding on an undiluted basis. 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.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
MagIndustries Corp. (TSX VENTURE:MAA.U - News)
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