The evaluation of the Makola Exploration Licence was subject to an exploration agreement that was signed on May 28, 1997 with the Government of ROC. The exploration agreement described plans for the technical and commercial evaluation of the extraction of magnesium (as metal), potassium (as potash), sodium (table salt) and other related salts. In July 2006 MagMinerals commissioned SNC-Lavalin International Inc. ("SNC") to complete a phase I full feasibility study on the potential plant, the results of which were published on February 29, 2008. In conjunction with the feasibility study, MagMinerals received a NI 43-101 compliant technical report titled Updated Reserve and Resource Estimate for MagMinerals Kouilou Potash Project, Republic of Congo (see section entitled “Technical Report”) which concluded that there are sufficient reserves within the study area to support a 600,000 tpy potash plant for 54 years. The project was granted a 25-year mining license (the “Mengo Exploitation Permit”) by the government of the ROC on April 3, 2008. The proposed plant site, near the village of Mengo, is located 25 km, by rail, east of the Atlantic port city of Pointe-Noire, Republic of Congo. Pointe-Noire is the economic capital of the country and is considered to be one of West Africa's best deep-water ports. It has successfully served as the operations base for major international oil companies for the past 35 years. The proposed plant site lies within the eucalyptus plantation operated by MagForestry. This provides MagMinerals access to the site and controls and limits access to the site by third parties. MagMinerals has signed off-take agreements appointing Ameropa AG of Switzerland for the marketing and sale of 100% of the first phase potash production as well as the second phase of potash production if and when that should occur. On December 22, 2008, the Company and its subsidiary, MagMinerals Potasses Congo S.A. (“MPC S.A.”), signed a comprehensive agreement with the government of Republic of Congo (“ROC”), referred to as the Potash Investment Agreement (“PIA”) or within the ROC as the Convention d’Exploitation Miniere. The PIA addresses all aspects of the Company’s planned Kouilou Potash Project in the Mengo area near the ROC port city of Pointe-Noire, including key fiscal and development terms. The PIA requires the constitution of a Congo company to be the operator of solution mining operations and the potash plant. During 2008 MagMinerals also incorporated MPC S.A. as the operating entity with respect to the project and, in accordance with the Congolese mining code, MPC S.A. is 10% owned by the government of the ROC. The PIA was signed by the Minister of Finance and the Minister of Mines and as such represents a binding document between the ROC and the Company. The PIA will proceed through a process of incorporation into a Law, which will need the approval of the ROC Parliament following its submission by the ROC Government and publication in the Official Gazette of the ROC. Until these processes are concluded the content of the PIA is subject to confidentiality terms. In March 2009, MPC S.A. contracted for the supply of gas from EniCongo S.A. which operates the onshore M’boundi oil field. EniCongo will supply the gas requirements for the project from its treatment plant to be located at Djeno, 25km southwest of the potash plant site. Additional gas quantities will also be made available to support the project’s back-up power facilities if electricity supplies fail. Reaching agreement for the supply of natural gas is considered to be the last significant agreement that the Company requires to continue to advance the project to construction. The first phase of operations has been designed as a 600,000 tpy, potash plant. The plant is based on a modular design and layout which will allow for the inclusion of an additional 600,000 tpy unit bringing the total production capacity to 1,200,000 tpy to more fully utilize the extensive resource base available. This added capacity is expected to have a lower capital cost than the first module as there is common infrastructure with the first plant. The operating costs per tonne are also expected to decrease with larger economies of scale at this production volume. The project proposes to use solution mining techniques to produce a brine which can be treated in a crystallization plant to produce granular potash fertilizers for export. The potash plant will utilize existing, commercially available technologies. One of the primary inputs for this crystallization process is natural gas which is currently flared as associated gas from nearby on-shore oil production.

MagMinerals Outlook MagMinerals continued production-well drilling in the first quarter and is conducting preconstruction design and engineering. In addition, MagMinerals has finalized site preparation tasks including the harvesting of the eucalyptus trees at the plant site and levelling of the ground for site works. MagMinerals is also commencing the construction of a natural gas supply line to its facility site. The Company also expects to conclude negotiations with the counterparty to the signed MOU, which will lead to an equity subscription sufficient to fund the equity requirements of the project. The Company has also had advanced discussions with lenders for the Kouliou project. Now that the material commercial agreements have been signed the Company expects this debt finance to be available. Upon reaching agreement on financial terms with lenders, the Company has targeted to achieve financial close by the second half of 2009. The financing is expected to amount to $800 million and to have a leverage ratio of 70:30 (Lenders:Company).