MagIndustries shares down on Congo project financing delay

Aug 31 (BestGrowthStock) – Shares of Canada’s MagIndustries Corp
(MAA.TO: ) fell as much as 19 percent Tuesday, a day after the
company said it was re-assessing options for its Congo potash
mine.

On Monday, MagIndustries had said China’s Complant
(000151.SZ: ), which had agreed to buy a majority stake in the
Mengo project, was yet to get approval from its controlling
shareholder, State Development and Investment Commission, for
the deal. [ID:nSGE67T0LJ]

The company had originally planned to sign the deal with
Complant — China National Complete Plant Import and Export Co
Ltd — by the end of July, with construction beginning in
November. But later the signing was delayed by a month.

“Given the similar delays encountered in attempting to
negotiate a similar agreement with the prior proposed partner
(Sinohydro Corp Ltd), we believe the response to this update
may be negative,” said Jennings Capital analyst Russell
Stanley.

Last November, the company had said Sinohydro would no
longer have an exclusive rights to buy 400 million common
shares of MagIndustries, after the extension provided to it
expired.

The analyst, who has a “speculative buy” rating on the
stock, said “this represents another potential delay in
obtaining financing for the potash project.”

The company had also said that its negotiations with
Complant will continue but it is re-assessing its options in
light of industry events.

BHP Billiton’s (BHP.AX: ) $39 billion bid for the world’s
largest potash producer, Potash Corp (POT.TO: ), has brought
small and mid-sized potash explorers into focus.

Shares of Canada-listed potash exploration companies have
risen on average more than 20 percent in the last two months,
as interest in the fertilizer sector has spiraled to levels
reached in mid-2008, when share prices peaked at the height of
the commodity boom. [ID:[ID:nN23128720]

Toronto, Ontario-based MagIndustries shares, which have
risen 13 percent in the last one month, were down 12.5 percent
at 35 Canadian cents in morning trade on the Toronto Stock
Exchange. Earlier in the session, they touched a low of 32.5
Canadian cents.
(Reporting by Aftab Ahmed in Bangalore; Editing by Maju
Samuel)
([email protected]; within U.S. +1 646 223 8780;
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MagIndustries shares down on Congo project financing delay