MOU Signed with Siemens To Assist in the Development of Kouilou Magnesium Project

    HALIFAX, Nova Scotia--May 30, 2001--Magnesium Alloy Corporation ("MagAlloy" or "Company") (YMY.U - CDNX) is pleased to announce the signing of a Memorandum of Understanding ('MOU') with Siemens Aktiengesellschaft, Power Transmission and Distribution Division, ('Siemens') of Germany. The MOU identifies several areas of cooperation between MagAlloy and Siemens for the development of the Company's Kouilou Magnesium Project ('the Project') located in the Republic of Congo (Brazzaville). MagAlloy and Siemens anticipate the conclusion of formal contractual agreements in the coming months.
    The Kouilou Project proposes the solution mining of the Company's extensive magnesium salt deposits and the subsequent extraction of magnesium metal utilizing proven technologies and the abundant low cost energy resources in the region. An independent feasibility study completed by Salzgitter Anlagenbau GmbH (SAB) a division of Babcock Borsig, indicates that the Kouilou Project could be one of the world's lowest cost producer of magnesium metal and magnesium alloys.
    MagAlloy and Siemens have identified synergies that will be defined and coordinated to facilitate the development of the Project. Some of the key issues identified in the MOU are power supply and delivery to the magnesium plant, electrical equipment, technical services and financing if required. MagAlloy and Siemens have both recently undertaken investigations into the supply of electrical power from the Inga hydro-electric facility on the Congo River. Initial indications suggest that power could be delivered at costs below those assumed in the feasibility study for the Kouilou Project.
    The Republic of Congo is determined to take advantage of currently strong energy prices to improve the economic infrastructure of the country. Pointe-Noire, the country's main industrial city is witnessing increased economic activity, particularly in the oil sector. Chevron, Exxon Mobil, TotalFinaELF, and Agip have all announced new exploration and development projects. In fact the total offshore Congo/Cabinda oil production primarily serviced from Pointe-Noire, now accounts for 10% of all U.S. oil imports.
    The world magnesium market continues to show exceptional growth with first quarter 2001 shipments up 7.5% over the last quarter of 2000. Growth is particularly strong in the use of high purity magnesium alloys for automotive parts. Major automotive firms, in their strategy to decrease vehicle weight, improve fuel efficiency and thus meet government emission targets, expect the magnesium content of each vehicle to increase from 5 pounds to as much as 300 pounds over the next 15 years.
    MagAlloy currently plans to begin production at the Kouilou Project by 2005 at a rate of 60,000 tonnes per year of magnesium metal and high purity magnesium alloys. MagAlloy is a Canadian company, whose shares are listed on the Canadian Venture Exchange (CDNX) under the symbol YMY.U. The Company has 19,585,817 shares outstanding on an undiluted basis. More information on the project is available on our web site www.magnesiumalloy.ca.

    ON BEHALF OF THE BOARD

    William B. Burton (signed) President

    The Canadian Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

    Magnesium Alloy Corporation 900 Marlborough Woods, Halifax, Nova Scotia, Canada, B3H 1H9 Phone (902) 425-6995 Fax (902) 484-6397 Toll free 1-877-647-3117 Email: info@magnesiumalloy.ca Web-site: www.magnesiumalloy.ca