Engineering Study On Kouilou Magnesium Project Elevated to Full Feasibility

18 May 1999

Engineering Study On Kouilou Magnesium Project Elevated to Full Feasibility Status/New Directors Appointed

    TORONTO, ONTARIO--May 17, 1999--Magnesium Alloy Corporation ("MAC" or "the Company") (MGAC.U - CDN) is pleased to report that Salzgitter Anlagenbau GmbH (SAB) of Germany has agreed to elevate their current independent engineering study of the Kouilou magnesium project to full feasibility status.
    SAB, a leading international general and engineering firm, is the primary contractor for the study together with Kavernen Bau-und Betriebs (KBB), a world leader in all phases of solution mining including; modeling of reserves, brine extraction and transport. The Russian National Aluminum and Magnesium Institute (VAMI) and Ukrainian Titanium Institute (UTI) are providing the proven magnesium extraction technology under the direction of SAB.
    Concurrent with the SAB study, SNC-Lavalin Inc. (SNC) has prepared a pre-feasibility study for the establishment of a hydroelectric facility at MAC's Kouilou hydroelectric site on the nearby Kouilou River. This facility would supply electric requirements to MAC's proposed magnesium facility as well as for regional consumption. The results of the SAB feasibility study and the SNC pre-feasibility will be disseminated before the end of May.
    The Kouilou project is located near Pointe Noire, the industrial port city of the Republic of Congo. The Company proposes solution mining of extensive magnesium salt deposits located within its license area and the subsequent extraction of magnesium metal, utilizing proven technologies and the abundant energy resources of the area. MAC believes that the combination of low-cost solution mining, advanced extraction technology and low-cost energy could result in the Kouilou project being a low-cost magnesium producer. The Government of the Republic of Congo continues to fully support MAC's development plans.
    MAC is also pleased to announce the appointment of Mr. Bryan Benitz, Mr. James Obi, and Dr. Nataliya Hearn to the Board of Directors of the Company. Mr. Benitz is Chairman of Benitz & Partners Limited a London based investment firm specializing in corporate finance advice and raising risk capital for companies in the natural resource industry.
    Mr. Obi is well known in the insurance industry having built and managed one of the largest insurance agencies in the United States over a twenty-three year period. In June 1987 Mr. Obi was elected Chairman of the Board of Crescent Investment Group Inc., a New York based global asset management firm specializing in the use of quantitative modeling techniques to manage currency and interest rate risks. Mr. Obi is also a director of TLC Beatrice Foods Inc., The Jackie Robinson Scholarship Foundation, The American Mental Health Association Inc., and the Forum for World Affairs.
    Dr. Nataliya Hearn received her Ph.D. in civil engineering from the University of Cambridge, United Kingdom, and is currently Assistant Professor, Department of Civil and Environmental Engineering at the University of Windsor and Adjunct Professor, Department of Civil and Environmental Engineering at the University of Toronto. Dr. Hearn has been involved in numerous technology and resource projects in North America, Russia and Ukraine including her current position as Director of Research and Development at Link-Pipe Inc. She is fluent in Russian and is well acquainted with VAMI.
    Magnesium Alloy Corporation is a Canadian company quoted on the Canadian Dealing Network (CDN) in Toronto and is traded in U.S. currency under the symbol "MGAC.U". MAC 18,568,595 shares outstanding on an undiluted basis. More information on the project is available on our web site www.magnesiumalloy.ca or by contacting us by phone, 416-360-4646 or Toll-free 1-877-647-3117 or by fax at 416-360-8669; or by email info@magnesiumalloy.ca.

ON BEHALF OF THE BOARD

William B. Burton President & Chief Executive Officer

    MAGNESIUM ALLOY CORPORATION 121 King Street West, Suite 850,
    Toronto, Ontario, Canada, M5H 3T9