magnesium international is not down and out...

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    HOMEX - Sydney

    Magnesium International Limited (MIL) has received an expression of
    interest from a major Japanese magnesium sheet user to purchase
    magnesium sheet metal to be produced by the MIL/CSIRO venture
    (MagSheet). This venture was announced on 22 April 2003 with details
    also included in MIL's recent prospectus for its current rights
    issue. A copy of the prospectus can be found on MIL's website

    The company is a major Japanese company specialising in the
    production of high quality metal products for the electronics,
    automotive and construction industries, with 20,000 employees
    worldwide and a turnover in excess of US$3 billion. One of its wholly
    owned subsidiaries manufactures magnesium products using its
    proprietary process technology. Major customers include Japanese
    consumer-electronics giants. The company has recently been awarded
    the International Magnesium Association prize for the most innovative
    new product, which was produced from magnesium sheet.

    The company has advised that it is seeking to develop a long term
    supply arrangement with MagSheet, including the purchase of, if
    possible, all of the magnesium sheet metal produced by the venture
    during Phase 1 (next 12 months). The MagSheet venture is targeting up
    to 3 tonnes per month for the last three consecutive months of Phase
    1. This expression of interest is subject to quality, price and
    supply. The current price of magnesium sheet is US$30-40 per kg and
    availability is limited.

    In making this expression of interest, the Japanese company notes
    that it has already completed extensive testing and prototyping of
    MagSheet product over the past six months and believes MagSheet
    product has properties at least equivalent to currently available
    products. The company has been looking for a new source of supply of
    magnesium sheet for some time and estimates it could purchase more
    than the quantity discussed in this expression of interest, if more
    high quality MagSheet product becomes available at the right price in
    the future.

    Phase 2 of the MagSheet venture is expected to produce up to 30
    tonnes per month during 2004/5 and the Japanese company has indicated
    it would attempt to purchase increased quantities at that time.

    MIL Managing Director, Mr Gordon Galt said "This is a very positive
    endorsement for the new MIL/CSIRO magnesium sheet venture and it
    augurs well for the future of this business. There is strong and
    increasing market demand for magnesium sheet metal, subject to
    quality and pricing. The CSIRO developed technology appears to
    produce magnesium sheet metal of a high quality and at a competitive
    price. We look forward to converting this expression of interest
    into a firm order as soon as the MIL/ CSIRO magnesium sheet venture
    is formally established. We expect this milestone to be achieved
    within the next four weeks".

    MIL is currently undertaking a rights issue to raise $8.3 million to
    fund MIL's participation with CSIRO in the magnesium sheet metal
    venture and to further the development of the SAMAG magnesium smelter
    project in Port Pirie.

    For more information please contact Gordon Galt, MANAGING DIRECTOR

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