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Press release from Marketwire

Migao Provides Update on Operations

Wednesday, December 28, 2011

Migao Provides Update on Operations08:28 EST Wednesday, December 28, 2011TORONTO, ONTARIO--(Marketwire - Dec. 28, 2011) - Migao Corporation (TSX:MGO), a leading producer of specialty potash fertilizers, is pleased to provide an operational update following a tour by independent Directors and senior management earlier in December of six of Migao's seven operating facilities. The selling prices of Migao's core specialty fertilizers: potassium sulphate (SOP) and potassium nitrate (NOP), remain healthy with SOP prices maintaining the previous quarter's price of approximately RMB 3,600 per tonne. NOP prices are currently RMB 6,000 per tonne. Hydrochloric acid (HCL) prices remain depressed and are expected to negatively impact overall gross margins for the core business. HCL prices are influenced by the demand and pricing strength of finished goods that use HCL as a raw material. Guangdong Migao and Sichuan Migao are operating at full production capacity to fulfill strong demand. The SQM joint venture is producing at full capacity in anticipation of increased demand in 2012. Changchun Migao's phase one 40,000 tonne per year SOP production is at full capacity. The new 40,000 tonne per year SOP expansion at Changchun is near completion with production testing scheduled to occur in early calendar 2012. Sichuan Migao's compound fertilizer business is performing well and at full capacity. Shanghai Migao continues to wait for the final permit to allow production to commence. The Shanghai facility is complete and all equipment has been successfully tested and raw materials are on site. Some demand for Shanghai's SOP is being met by deliveries from Guangdong Migao's SOP production. Zunyi Migao's compound facility has been upgraded to allow for 100,000 tonnes of annual production capacity. The equipment at Zunyi is being tested for mechanical operations without producing any product. The Company also announces the receipt of the final refund of US $35 million from Potash Export Company ('PEC') related to the US $100 million prepayment advanced earlier this year and described in Migao's press release of March 15, 2011. PEC previously agreed to refund the US $100 million prepayment on a schedule between August and December 2011, and with the first US $65 million already received, this now completes the full refund. The volume and price terms of the potash agreement will remain in effect; however Migao will negotiate financial prepayment terms on a date closer in time to the initial delivery, and in line with the Company's historical prepayment timelines with other potash suppliers. The initial deliveries of potash from PEC are expected to commence by January 2013. With the prepayment having been fully refunded, the agreement by Mr. Liu Guocai to pledge his shares of Migao against any potential default of the contract has been terminated. Migao Corporation, through its wholly owned subsidiaries, owns and operates fertilizer production plants in various strategic locations across China for the production and sale of potassium nitrate, potassium sulphate and specialty compound fertilizers to China's agricultural market. Migao Corporation is subject to, and complies with strict government regulations that govern safety, quality and environmental protection. Please visit www.migaocorp.com for further information.CAUTION REGARDING FORWARD-LOOKING STATEMENTS This news release may include forward-looking statements within the meaning of certain securities laws, including the "safe harbour" provisions of the Securities Act (Ontario) and other provincial securities laws in Canada. These forward-looking statements include, among others, statements with respect to our objectives and goals, and strategies to achieve those objectives and goals, as well as statements with respect to our beliefs, plans, objectives, expectations, anticipations, estimates and intentions. The words "may", "will", "could", "should", "would", "suspect", "outlook", "believe", "plan", "anticipate", "estimate", "expect", "intend", "forecast", "objective", and "continue" (or the negative or grammatical variations thereof), and words and expressions of similar meaning, are intended to identify forward-looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which give rise to the possibility that predictions, forecasts, projections and other forward-looking statements will not be achieved. Certain material factors or assumptions are applied in making forward-looking statements and actual results, performance or achievements may differ materially from those expressed or implied in such statements. We caution readers not to place undue reliance on forward-looking statements as a number of important factors, many of which are beyond our control, could cause actual results, performance or achievements to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in such forward-looking statements. These factors that relate to our company include, but are not limited to: risks related to raw materials including agreements with Potash Export Company; execution of the business plan; expansion plans; dependence on key personnel; key relationships; dependence on key customers; dependence on key suppliers; competition; market factors and volatility of commodity prices; environmental risks and hazards; operating risks; proprietary rights; infrastructure; future capital requirements; technical substitution; exchange rate fluctuations; insurance; foreign operations; tobacco industry considerations; weather conditions and natural disasters; control by management; seasonality; dividends; conflicts of interest; global financial conditions; and the implementation of the Labour Contract Law in the People's Republic of China in 2008. In addition to the foregoing risk factors, there are also risks related to doing business in China which include, but are not limited to: state ownership; government sector intervention; foreign investment; repatriation of profit and currency conversion; tax; shareholders' rights and enforcement of judgements; developing legal system; protection of intellectual property rights; permits and business licenses; appropriation; and availability of land. Should one or more of these factors materialize, or should our estimates or underlying assumptions prove incorrect, actual results, performance or achievements may vary materially from those described in forward-looking statements. We caution that the foregoing list of important factors that may affect our future results, performance or achievements is not exhaustive. When reviewing our forward-looking statements, readers should carefully consider the foregoing factors and other uncertainties and potential events. Additional information about factors that may cause actual results to differ materially from expectations, and about material factors or assumptions applied in making forward-looking statements, may be found under the "Risk Factors" sections in our Annual Information Form and annual MD&A and elsewhere in our filings with Canadian securities regulatory authorities. Except as required by Canadian securities laws, we do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf; such statements speak only as of the date made. We cannot assure readers that actual results, performance and achievements will be consistent with these forward-looking statements, and the differences may be material. The forward-looking statements included herein are expressly qualified in their entirety by this cautionary language.To be added to Migao's email distribution list for news releases or to be removed from the list, please send a request to info@migaocorp.com. FOR FURTHER INFORMATION PLEASE CONTACT: Jay HusseyMigao CorporationVice President Corporate Finance416-869-1108 ext. 104jay.hussey@migaocorp.comORRandall SmallboneMigao CorporationChief Financial Officer416-869-1108 ext. 103randall.smallbone@migaocorp.comwww.migaocorp.com