TORONTO, ONTARIO--(Marketwired - July 10, 2013) - MagIndustries Corp. (MAA.TO) (the "Company" or "MagIndustries"). Further to its press release of March 18, 2013 indicating that a "Framework Agreement" had been entered with East China Engineering Science and Technology Co., Ltd. ("ECEC") MagIndustries, is pleased to report that a General Construction Contract (the "General Contract") was signed by the two parties yesterday. Under the General Contract ECEC will provide a range of services related to the planning, construction and performance of the Company's proposed 1.2 million tonnes per annum Mengo Potash Project in the Republic of Congo (the "Project"). The signing of the General Contract is a very important milestone for the Company toward achieving its ambitions to be a major potash producer for worldwide markets.
Terms and conditions in the General Contract
The main terms of the General Contract place responsibility on ECEC for overall planning, project management, design management and coordination; procurement, construction, installation, testing of equipment, materials and integrated systems and commissioning. ECEC will complete all work specified, be responsible for progress and quality of the Project plant and guarantee safe and effective completion of the Project while abiding by all applicable laws and regulations.
MagIndustries will provide technical documents and information, fulfill payment obligations and execute other work within its responsibilities while monitoring the implementation of the General Contract.
The General Contract comes into effect when the General Contractor has provided to the Company a performance guarantee registered with a bank which may be demanded by the Company in the event of non-performance of certain obligations specified in the General Contract.
Key Terms of the Mengo General Contract
|1. Contracting Parties||Owner - MagIndustries Corp. and /or MagMinerals Potasses Congo SA |
General contractor - East China Engineering Science and Technology Co., Ltd.
|2. Project||1.2 million tonnes per annum Mengo Potash Project in the Republic of Congo|
|3. Project Portfolio||This Project is composed of seven major modules, covering a total of thirty-eight (38) installations/systems. The major works are: brine extraction and transportation, processing plant, compaction plant, thermal power plant, office/living quarters, off-plant works and jetty.|
|4. Estimated Construction Period||Pre-construction commenced in March 10, 2013; completion and handover is planned for March 31, 2016 contingent on completion of a project finance package.|
|5. Scope of Work||The general contractor is responsible for the general implementation planning, general management of the whole Project, designing management and coordination, procurement of equipment and materials (procurement of some key pieces of equipment remains with the Company, while management responsibility shall be attributable to the General Contractor), construction, installation, solo test run, test running, organization of commissioning and provision of device performance guarantees. Exploration related activity, construction of the loading jetty and installation of related equipment; well work; construction of the owners' independent office and living area are not currently included in the General Contractor's scope of work, but might be assigned to it at a later stage.|
|6. Contract Price||This Contract Price includes both a fixed component, of approximately USD$497 million and a non-fixed component of approximately USD$24.5 million, as an incentive to the General Contractor for timely completion and quality of work. Progress payments will be made quarterly. The Contract Price will be adjusted if changes are made to the scope of work.|
About East China Engineering Science and Technology Co., Ltd.
Based in Beijing, Peoples Republic of China, ECEC is a modern scientific and technological engineering company with the former Third Design Institute of the Ministry of Chemical Industry as its principal initiator. It was the first joint-equity enterprise in the prospecting and engineering industries approved by the former State Economic and Trade Commission. It was listed on Shenzhen Stock Exchange in July, 2007.
ECEC specializes in technology research and development, consultation, engineering design, procurement, construction management, start-up training, supervision, project management contracting and general contracting, etc. in the domain of project construction. ECEC has a dozen state Class-A qualifications in the field of chemical industry, petrochemical industry, municipal works, architecture, environmental protection and other fields, as well as Class A qualification for general contracting of projects. It has qualifications for overseas contracting projects with import-export operation rights as well as QHSE management system certification of conformity. Over the past 50 years, ECEC (including its principal initiator) has completed more than 1,000 projects covering various large and medium-sized engineering design and turnkey project contracts, and has earned more than 200 ministerial/provincial and higher level awards such as the National Prize for Progress in Science and Technology, the Silver Key Prize for Turnkey Project Contracting, the Prize for Excellent Engineering Design, Outstanding Project Supervision Company, etc. In the meantime, ECEC has successively completed a number of overseas project construction mandates and accumulated rich experience in overseas project construction.
About MagIndustries Corp.
MagIndustries is a Canadian company whose common shares are listed on the TSX and trade in Canadian currency under the symbol "MAA". The Company has 755,942,674 common shares outstanding. 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.
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, country policy and political risks, currency exchange risk, changing market conditions, force majeure events, and other risks detailed from time-to-time in the Company's ongoing filings. Specifically, with respect to this press release there is a risk that, the remaining conditions to finalize the General Contract may not be met, or that having been met, that either party may fail to meet its obligations under the General Contract, or additionally that the project finance loans necessary for the Project to proceed may not be approved or may not be approved in a timeframe that allows the Project to proceed on the expected schedule. 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