Friday, November 6th, 2009
MagIndustries to acquires Congolese concern in cash and royalties deal
TORONTO - MagIndustries Corp. (TSX:MAA) announced Friday it plans to acquire a Congolese company, Potasse du Congo, through a subsidiary in a transaction involving both cash and royalties.
MagMinerals Potash Corp. will acquire the shares of PdC for US$500,000 in cash, with the vendor retaining a royalty interest of 10 per cent in the exploration permits being acquired.
The value of the permits have been capped at US$9.5 million, with MagMinerals agreeing to pay US$3.5 million to reduce this royalty interest to six per cent.
"The acquisition of PdC re-establishes and extends MagMinerals' historic position as the largest mineral permit holder in the potash-rich Kouilou region of the Republic of Congo, ensuring that MagMinerals will control future potash developments within the permit areas," the company said in a news release.
Meanwhile, MagMinerals is holding talks with others interested in participating in exploration activities on the exploration permit areas gained through the PdC acquisition.
PdC holds three mineral exploration licences in the Kouilou region totalling 2,056 square kilometres and including the former underground potash mine at Holle.
MagIndustries shares were up two cents at 61 cents on volume of almost 1.7 million shares in early afternoon trading Friday on the Toronto Stock Exchange.
