Magnus International Resources plans to become a major participant in China "s titanium dioxide market.

The company has acquired an option to buy 30% of what is potentially one of China "s largest high-quality titanium properties, at  Xixia in Henan Province .

Although Magnus has not received sufficiently qualified reports, the company is confident, based on other Chinese reports and existing data, that the property contains titanium mineralization of significant value.

The 30% interest will include all mining, extraction, processing, mineral sales rights and all other rights to this potentially world-class titanium property.

The Xixia titanium dioxide property lies within Henan Province in central China , and comprises a 34sqkm mineralization zone approximately 18km long and 1 to 2km wide. Titanium occurs at Xixia as the mineral rutile.

Compared to other mineral forms of titanium, the mineral rutile commands a higher price per tonne, can be used for a wider range of end products, and is cleaner to process environmentally. Based on the geologic characteristics of the mineralized system, the titanium-bearing rutile at the Xixia property has a good chance of being high purity and capable of producing a high-value end product. Previous smaller scale mining and milling activity on the property support this assessment.

A non-qualifying report by the Tiandiren Geological and Mineral Products Company of China , has documented mineralization of 923 million tonnes containing 2.4% titanium dioxide as rutile. Much of the rutile resource occurs at and near surface in easily mineable soils and weathered rock. The report was completed in 2004, and the findings require confirmation in compliance with Guide 7 ( United States ) and National Instrument 43-101 ( Canada ) resource estimation protocols. It is anticipated that a Guide 7 and NI 43-101 compliant resource estimation work program will be undertaken by Magnus as part of the property exploration and evaluation.

According to available documents (which are non-compliant to Guide 7 and NI 43-101), the property is reported to contain as much as 22 million tonnes of titanium dioxide containing 13.2 million tones of titanium metal. Titanium sponge metal has been selling recently at about US$24/kg, or US$24,000 per tonne. Mineral recoveries, mining costs, processing and refining costs, and other costs all need to be established for the project, but the property likely represents a significant titanium asset that can be of considerable value, and can supply titanium to China 's rapidly expanding economy.

China is the world's fastest-growing titanium dioxide market and the second largest country for total titanium dioxide consumption. It is currently consuming approximately 650,000 tonnes per year of titanium, and is a net importer of titanium dioxide. In line with the anticipated massive expansion in titanium dioxide consumption, DuPont recently announced plans for a world-class titanium dioxide plant for the city of Donying in China , to have an annual capacity of 200,000 tons. DuPont's total investment will exceed US$1 billion.

Global rutile production is expected to increase by about 50% from 2005 through 2007. Rutile titanium dioxide processing in China is expected to increase significantly as more modern and environmentally cleaner chloride processing technology becomes available.

Approximately 93% of the world's titanium mineral production is used in the making of titanium dioxide pigment, a white powder with high opacity and brilliant whiteness. It is an essential ingredient for paints, plastics, paper, inks and fabrics. The remaining 7% of global production is used for aerospace applications, surgical equipment, sporting goods and welding fluxes.

Magnus International Resources' expansion in China

Magnus is already well-established in China 's gold mining industry. The company owns 90% of the Huidong part of the Boka-Huidong trend in western China , just north of the same trend where Southwestern Resources has made major discoveries. Mining securities analysts' gold resource projections have reached as high as 14 million ounces of gold at Southwestern's Boka project. Magnus holds an 83sqkm section on this same trend, just to the north-west. More than 17,000 soil samples have already been collected and more than 10,000 tested, confirming gold concentrations similar to those found in Southwestern's share of the Boka trend. Magnus is also earning a 90% interest in the 113sqkm Mangshi property in western Yunnan province. Previous results indicate a similar style of gold mineralization to Nevada 's Carlin Trend.