Sandwell to acquire MBAC

Vancouver-Sandwell Mining Ltd. has agreed to acquire all of the issued and outstanding shares of MBAC Opportunities & Financing Inc. MBAC is a private Canadian company that is focused on becoming a significant integrated producer of phosphate and potash fertilizer in the Brazilian market. MBAC will be a wholly-owned subsidiary of Sandwell. Following completion of the transaction, Sandwell intends to change its name to MBAC Fertilizer Corp. Concurrent with the closing of the transaction, current Sandwell management and directors Edward Farrauto, Blair Murdoch, and Ryan King will resign from the board and as officers. The new board will consist of up to eight directors, each of which will be a nominee of MBAC. The new senior management team will consist of Antenor Silva, president and CEO; Anthony Cina, vice president, finance and CFO; Carlos Braga, vice president, operations; Luiz Bizzi, vice president, exploration; and Steve Burleton, vice president, corporate development. In October 2008, MBAC indirectly acquired all of the quotas of Itafos Mineracao Ltda, which holds a 100 percent interest in the Itafos phosphate mine and related infrastructure (Campos Belos Project), for approximately US$35 million, paid in cash and shares of MBAC. MBAC has also recently expanded its property portfolio in Brazil with the acquisition of two potash exploration projects and one additional phosphate exploration project. MBAC is continuing to search for additional fertilizer opportunities in the Brazilian and other Latin American markets. In 2007 and 2008, Itafos sold approximately 50,000 mt and 70,000 mt of phosphate rock, respectively. In order to maximize near-term cash flow, improvements are currently being made to increase the production of P2O5 to 100,000 mt/y of phosphate rock. Over the next couple of years, the mining of a lower grade ore (6 percent P2O5) will be concentrated to 29-30 percent P2O5 and used in the production of SSP. MBAC is evaluating the expansion of capacity of the facilities to 330,000 mt/y of phosphate concentrate, facilitating the production of approximately 550,000 mt/y of SSP for sale to local markets by the second half of 2012. MBAC expects to spend up to US$200 million over the next two years to upgrade the Campos Belos Project and build the required infrastructure needed to produce SSP. MBAC is targeting commercial production of SSP to begin in the first quarter of 2012, which is expected to significantly increase operating cash flows.