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SALE OF ASSETS OF A:

MAGNESIUM PLANTMAGNOLA METALLURGY INC. (“MAGNOLA”)

Danville, Quebec, Canada

Call for Tender Notice

PricewaterhouseCoopers Corporate Finance Inc. has been retained by Magnola Metallurgy Inc. as process coordinator for the sale of plant assets.

Your company has been identified as a prospective acquirer that could potentially benefit from this unique opportunity.

Assets for sale mainly include:

Diabon SGL Carbon HCL synthesisunitsHCL acid boiler500 m.t/h MgO storage and repulpingsystem and flocculation/coagulation system Chlorine storage and vaporizationMagnesium TECHMO trucksShunting trucksMagnesium furnaces and BROCHOT casting linesPANNAVIS Belt FiltersGEO Slurry pumpsUS FILTER, Press filtersSTEARLING Chlorine compressorsAir compressors and drying system

Diesel generator 800 W10 MW SOLAR Cogeneration unitsNatural gas compressor systemJOHNSON steam boilerRotary dryerBARMARC crusherVacuum cleaning systemSTEDMAN crusherPumping and evaporation system23 m.t/h Pneumatic conveyor system1500 m³ storage silos29 m.t/h Pneumatic conveyor systemVacuum systemGlycol heat exchangers 13 000kwChlorine gas scrubberCooling tower MARLEY

Serpentine handling equipmentDissolution equipmentBrine drying equipmentDistribute control systemElectric substation and equipmentMachine shop machineryTooling and equipmentHandling equipmentOffice furniture and equipment, computer equipmentBuildings to dismantleOverhead cranesParts and accessories

Important date:Tender offers must be received by 2:00 PM (EST) on Wednesday, February 4, 2009.

Call for tenders documents:The tender documents, including a description of asset lots for sale, are available on the following website: www.pwc.com/car-magnola.

Asset inspection:Plant visit for asset inspection will take place by appointment only at Magnola’s location in Danville, Quebec, Canada.

Data room:Access to a virtual data room containing more detailed information on assets for sale will be granted upon request. Additional technical documentation will be available on site during scheduled visits.

Offers considered:Assets have been grouped into lots and sublots and offers may be tabled for lots and/or sublots.

For more information, to schedule a visit or to obtain access to the virtual data room, please contact:

Bernard CormierTel.: (514) 205-5394Fax: (514) 205-5363

Email: [email protected]

CALL FOR TENDERS

PricewaterhouseCoopers Corporate Finance Inc. (“PwC CF”), acting as process coordinator for Magnola Metallurgy Inc. (“Magnola”), solicits offers to purchase or put up for sale (“tenders”) the assets listed below, under the conditions and reserves stated herein and in the document entitled “Terms and Conditions of Sale”: Description of Assets

Lot 1 – Magnesium production machinery 1.1 Diabon SGL Carbon HCL synthesis units 1.2 HCL acid boiler 1.3 500 m.t/h MgO storage and repulping system and flocculation/coagulation system 1.4 Chlorine storage and vaporization 1.5 Magnesium TECHMO trucks 1.6 Shunting trucks 1.7 Magnesium furnaces and BROCHOT casting lines Lot 2 – Plant machinery 2.1 PANNAVIS Belt Filters 2.2 GEO Slurry pumps 2.3 US FILTER, Press filters 2.4 STEARLING Chlorine compressors 2.5 Air compressors and drying system 2.6 Diesel generator 800 W 2.7 10 MW SOLAR Cogeneration units 2.8 Natural gas compressor system 2.9 JOHNSON steam boiler 2.10 Rotary dryer 2.11 BARMARC crusher 2.12 Vacuum cleaning system 2.13 STEDMAN crusher 2.14 Pumping and evaporation system 2.15 23 m.t/h Pneumatic conveyor system 2.16 1500 m³ storage silos 2.17 29 m.t/h Pneumatic conveyor system 2.18 Vacuum system 2.19 Glycol heat exchangers 13 000kw 2.20 Chlorine gas scrubber 2.23 Cooling tower MARLEY 2.34 Serpentine handling equipment

2.35 Dissolution equipment 2.36 Brine drying equipment 2.37 Distribute control system

2

Lot 3 – Electric substation and equipment 3.50 Medium Average switchgear and 600 volts CCM (bldg 350) 3.51 Medium Average switchgear and 600 volts CCM (bldg 500) 3.52 Medium and low Average switchgear and 600 volts CCM (bldg 610) 3.53 Medium Average switchgear and 600 volts CCM (bldg 500H) 3.54 Medium Average switchgear and 600 volts CCM (bldg 710) 3.55 Medium Average switchgear and 600 volts CCM (bldg 620) 3.56 Medium Average switchgear and 600 volts CCM (bldg 800) 3.57 Medium Average switchgear and 600 volts CCM (bldg 910) 3.58 Medium Average switchgear and 600 volts CCM (bldg 213) 3.59 Electric power substation 230 KV Lot 4 – Machine shop machinery Lot 5 – Tooling and equipment Lot 6 – Handling equipment Lot 7 – Office furniture and equipment, computer equipment Lot 8 – Buildings to dismantle

8.221 Cogeneration (includes building 221) 8.213 Cooling tower building 8.350 Ore preparation (includes 340 and 350) 8.420 Leaching (includes 410 and 420) 8.500 Drying 8.710 Casting building 8.720 Warehouse for finished products 8.800 Hydrochloric acid synthesis 8.910 Office building 8.960 Laboratory 8.232 Substation building

Lot 9 – Overhead cranes Lot 10 – Parts and accessories

3

Tender Instructions 1. Assets may be inspected by appointment at the plant located in Danville, Quebec, Canada.

A non-refundable fee of CA$500 (plus taxes) is payable in order to be provided with access to all of the lots and sublots as well as the physical on site data room containing technical documentation.

To make an appointment, please contact Bernard Cormier at 514-205-5394. 2. Tenders must be accompanied by:

i) a deposit by way of a certified cheque or bank transfer payable to Magnola Metallurgy Inc. or by a bank standby letter of credit to its order payable on sight for a minimum of 30 days after the opening of tenders, for an amount representing no less than 10% of the amount of the tender (the "Deposit");

ii) the document entitled "Terms and Conditions of Sale" signed by the Tenderer. 3. PwC CF and Magnola reserve the right to waive compliance with one or more conditions

stated in this Call for tenders and the document entitled "Terms and Conditions of Sale". 4. PwC CF and Magnola are not required to accept the highest nor any other tender

whatsoever and reserve the right to dispose of the assets in any other manner. 5. Tenders shall be received until 2:00 PM (EST) on Wednesday, February 4, 2009, at the

following address:

PricewaterhouseCoopers Corporate Finance Inc. 1250 René-Lévesque Boulevard West, Suite 2800

Montréal, Quebec, Canada H3B 2G4 The envelope must clearly be marked "Tender - Magnola". Tenderers shall not be present at the opening of the tenders. 6. To obtain access to the virtual data room containing a description of assets for sale, please

contact Bernard Cormier at 514-205-5394. January 9, 2009 PricewaterhouseCoopers Corporate Finance Inc.

TERMS AND CONDITIONS OF SALE

TO: PricewaterhouseCoopers Corporate Finance Inc. acting on behalf of Métallurgie

Magnola Inc. (“MAGNOLA”), hereafter called “PwC CF”.

FROM:

Further to the PwC CF call for tenders, the Undersigned offers to purchase or to sell on

behalf of MAGNOLA, as stated in the attached tender (the “Tender”), the assets

described hereinafter, in compliance with the following terms and conditions:

1. INCORPORATION OF THE CALL FOR TENDERS

1.1 The content of the Call for Tenders and the defined terms therein are an

integral part of the present Conditions and Reserves.

2. PRECEDENCE

2.1 The present conditions and Reserves have precedence over any

inconsistent provision of the Tender, unless the Undersigned offers a price in

compliance with such conditions and reserves and a different price

according to other conditions and reserves stated in the Tender.

3. ASSETS

3.1 The Tender covers the whole of the assets which are part of the lots(s)

mentioned in the Tender as described in the inventory prepared by

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MAGNOLA (the “Assets”) and which was reviewed by the Undersigned (the

“Inventory”);

3.2 The Assets include only those items that are owned by MAGNOLA,

notwithstanding any inclusion to the contrary in the Inventory;

3.3 It is acknowledged by the Undersigned that the quantities stated in the

Inventory are provided for illustrative purposes without guarantee and the

Undersigned is responsible for checking the content and quantity of the

Assets.

4. AMOUNT

4.1 The amount indicated in the Tender shall prevail, and is payable cash of

guaranteed by the issuance of a standby letter of credit at Closing, as

hereinafter defined;

4.2 Any tax, assessment, contribution and any right whatsoever, inherent or

consequential to the acceptance of the purchase offer or to the transfer of

the assets are payable by the Tenderer in addition to the amount indicated in

the Tender;

4.3 The Undersigned agrees not to request any adjustments to the amount

tendered.

5. WARRANTY

5.1 The Undersigned hereby declares that he has inspected the Assets and that

he shall rely entirely on his examination and investigation and acknowledges

that the Assets are being sold without guarantee, whether legal or

contractual, other than the capacity of the vendor to sell, at the

Undersigned’s own risk;

5.2 The Undersigned acknowledges that MAGNOLA and PwC CF are making

no representation and are giving no warranty, either express or implied, as to

their conformity to the description thereof in the Inventory, as to their

compliance with any standard whatsoever (including an environmental

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standard) in force from time to time with regard to the Assets, as to their

merchantability and as to their fitness for the purpose for which they are

intended. The Undersigned renounces to any claim whatsoever that could

arise from any such representation or warranty;

5.3 It is further acknowledged by the Undersigned that neither MAGNOLA nor

PwC CF may be held liable for any potential claim and/or lawsuit, including

those related to government obligations of any type, regardless of the date of

occurrence of the facts alleged in support of such claim and/or lawsuit;

5.4 The Undersigned may claim no compensation of any type form any person

involved in the call for tender process for any costs and/or damages of any

type;

5.5 In submitting the Tender, the Undersigned irrevocably acknowledges that

MAGNOLA is not a professional vendor;

5.6 Any information provided by MAGNOLA and PwC CF with respect to the

Assets is provided for the convenience of the Undersigned without

representation or warranty as to the accuracy, completeness or preciseness

of said information and the information provided by MAGNOLA and/or PwC

CF is not part of the present Conditions and Reserves or the Tender.

6. WITHDRAWAL, ACCEPTANCE OR REFUSAL OF A TENDER

6.1 Where a Tenderer withdraws its Tender during the 48-hour period prior to

the time set for the opening of the tenders until he is notified of the results of

the tenders, the Deposit shall be cashed and kept by MAGNOLA as

liquidated damages;

6.2 Notwithstanding any indication to the contrary in the Tender, MAGNOLA

shall be entitled to accept or reject the Tender until the expiry of the fifteenth

(15th) business day following the opening of the Tenders;

6.3 In the event the Tender is retained, PwC CF shall notify the Undersigned by

faxing, mailing or emailing to the Undersigned a notice to this effect at the

address stated on the Tender;

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6.4 In the event the Tender is rejected, the Undersigned shall be notified by PwC

CF by mail, and the Deposit enclosed.

7. DELIVERY, TAKING POSSESSION OF THE ASSETS AND OCCUPATION OF THE PREMISES

7.1 The Undersigned and MAGNOLA shall execute all of the appropriate

documentation required by MAGNOLA in order to particularize and

implement the accepted offer, the Deposit shall be applied in payment for

much of the purchase price and the Undersigned shall pay the balance, or

shall secure its payment to the satisfaction of MAGNOLA (the whole of the

foregoing being the “Closing”) no later than then (10) business days after the

acceptance of the Tender, or such further delay agreed to by both parties;

7.2 Acceptance of the Tender means that MAGNOLA agrees that the

Undersigned shall take possession of the Assets after the Closing in

accordance with the timetable proposed by the Tenderer and accepted by

MAGNOLA and/or PwC CF (hereafter the “Timetable”). The Timetable shall

be determined to maximize the Assets delivery process under each Tender

that is accepted;

7.3 The Undersigned accepts and agrees that the taking possession, removing

and/or dismantling the Assets may be delayed or subjected to certain

conditions required for the orderly dismantling of the whole plant;

7.4 The Undersigned shall take possession of the Assets and become owner

thereof at the Danville Plant at a time agreed to by MAGNOLA and PwC CF

and shall be evidenced by a receipt prepared for this purpose by a

representative of MAGNOLA and remitted by the Undersigned;

arrangements may be entered into with MAGNOLA with respect to the time

period required for the removal of the Assets from the plant. The Tender

must indicate the time period suggested, as the case may be;

7.5 The Undersigned shall take possession of all the Assets include in the lot(s)

covered by the Tender, without exception. If some of the Assets contain or

constitute contaminants or dangerous waste or products, the Undersigned

Page 5

shall dispose of them in compliance with the laws and regulations relating to

their transportation and disposal;

7.6 Subject to MAGNOLA’s prior agreement, the Undersigned shall occupy the

premises in compliance with all relevant laws and regulations and shall

preserve the cleanliness and safety of the premises;

7.7 The Undersigned is responsible for any loss or deterioration to the premises

and property located therein caused by the staff of the Undersigned or by

third parties he will admit on the premises to take possession, remove or

dismantle the Assets, and the Undersigned shall hold MAGNOLA and PwC

CF harmless from any claim for damages to the property;

7.8 The Undersigned shall take possession of the Assets in their current state

and location, at his own expense and MAGNOLA and PwC CF have no

responsibility in this regard. The Undersigned is responsible for all work to

dismantle or move the Assets in order to take possession of them and must

comply with current standards and applicable laws and regulations;

7.9 If the Undersigned fails to take possession of the Assets, or fails to meet all

of the terms and conditions set out in its Tender, the Undersigned authorizes

MAGNOLA to cancel the acceptance of its Tender and to keep the Deposit,

or, as the case may be, the purchase price by way of liquidated damages.

8. DEFAULT

8.1 In the event the Undersigned fails to comply with any one of his obligations

hereunder, he shall indemnify MAGNOLA and PwC CF for any damage

incurred by them now or in the future as a result of such default, without

prejudice to any other right and recourse of MAGNOLA and PwC CF;

8.2 In particular, the Undersigned shall, upon request, reimburse MAGNOLA

and PwC CF for any expenses incurred by MAGNOLA following the

Undersigned’s failure to take possession of the Assets within the prescribed

time limit, in addition to the confiscation of the Deposit, as the case may be;

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8.3 The Undersigned agrees that any amount payable to MAGNOLA and PwC

CF under the present agreement shall bear interest at a rate of 12% per year

starting on the due date of such amount.

9. MISCELLANEOUS

9.1 In the event that, for whatever reason, MAGNOLA is unable to deliver to the

Undersigned all Assets or a significant portion thereof, MAGNOLA may

cancel its acceptance of the Tender and the Undersigned shall recover the

Deposit, without further recourse by either party;

9.2 MAGNOLA and PwC CF shall only provide to the Undersigned the

documents that are available in the virtual and physical data rooms.

Documents are made available to Tenderers without representation or

warranty by MAGNOLA or PwC CF as to what is included or not. The

Undersigned has prepared the Tender on the basis of his own review, does

not assume knowledge by MAGNOLA and/or PwC CF and does not have

any recourse against MAGNOLA and/or PwC CF for inaccurate, incomplete

or missing information;

9.3 The Undersigned agrees that the information available in the data rooms is

sufficient and that his Tender will not be subject to additional verification

and/or validation after the deadline for filing Tenders, notwithstanding any

provision to the contrary in the Tender. Accordingly, no price adjustment

based on such verification or validation will be considered;

9.4 As the case may be, the Undersigned must be able to justify his ability to

carry out all of the terms and conditions of his Tender within five (5) business

days following a request to that effect;

9.5 It is acknowledged by the Undersigned that, if any property in a lot is claimed

by another Tenderer, the dispute shall be resolved by MAGNOLA, subject to

the Undersigned’s right to ask for third party arbitration at his expense.

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10. ADDITIONAL CONDITIONS AND RESERVES APPLICABLE TO OFFERS TO SELL THE ASSETS FOR THE ACCOUNT OF MAGNOLA

10.1 No offer to sell the Assets for the account of MAGNOLA will be considered

unless it provides for the payment of minimum net proceeds of sale to

MAGNOLA and a method of calculation of the net proceeds of sale beyond

that amount;

10.2 At Closing, the Undersigned shall remit to MAGNOLA a standby letter of

credit payable on sight for a minimum period of one hundred and eighty

(180) days, for an amount equal to 115% of the minimum amount the

Undersigned has agreed to remit to MAGNOLA, which letter shall be issued

by a recognized financial institution and the wording of which shall be

consistent with the rules and standard practices of the International Chamber

of Commerce and, upon receipt of this letter by MAGNOLA, the Deposit shall

be returned to the Undersigned. If the Undersigned fails to remit the said

standby letter of credit to MAGNOLA within the stated delay, MAGNOLA

may, in addition to its other rights and remedies, cancel its acceptance of the

Tender and keep the Deposit that accompanied the Tender as liquidated

damages;

10.3 The Undersigned shall inform PwC CF in writing, within ten (10) business

days of acceptance of his Tender, of the terms and conditions of sale of the

Assets (the “Plan”), how long the premises are to be occupied, the estimated

sales costs;

10.4 The Undersigned shall pay to MAGNOLA the amounts due and shall submit

a written report each month including the items sold, the sale price and all

costs incurred during the month. This report should be submitted not later

than the 10th of the following month;

10.5 In the event the Undersigned fails to submit the written report or make the

payment provided in paragraph 10.4, MAGNOLA shall demand payment of

the standby letter of credit, without prejudice to its right to require the

Undersigned to submit the monthly reports and pay any other amounts due

to MAGNOLA;

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10.6 In the event the Undersigned fails to take possession of the Assets within the

prescribed time limit or to follow the Plan, MAGNOLA shall, in addition to its

other rights and remedies, cancel its acceptance of the Tender and demand

payment of the standby letter of credit by way of liquidated damages.

11. ADDITIONAL CONDITIONS AND RESERVES APPLICABLE TO OFFERS TO PURCHASE ALL OR SUBSTANTIALLY ALL OF THE LOTS, DISMANTLE THE PLANT AND RESTORE THE SITE

11.1 The Buyer shall be responsible for all costs of whatever nature from the date

of Closing;

11.2 The Undersigned shall agree, with MAGNOLA and PwC CF, to a specific

timetable to dismantle the plant and restore the site, which shall not last

more than eighteen (18) months from the date of acceptance of the Tender;

11.3 At Closing, the Undersigned shall remit a standby letter of credit payable on

sight or nineteen (19) months or a performance bond for $2.5 million to

guarantee the performance of all of the work within the specified period;

11.4 The Undersigned shall lease the site from MAGNOLA for the term of the

above-mentioned specific timetable (see 11.2) for $1. The lease shall be

executed as part of the Closing;

11.5 The work shall be performed under the full responsibility of the Undersigned

in compliance with all statutes and regulations applicable from time to time

with respect to construction, labour, health and safety and in a manner that

avoids the occurrence of any safety and environmental risk;

11.6 It is acknowledged by the Undersigned that the post-restoration state of the

site shall be consistent with the specifications received by the Undersigned

from MAGNOLA and shall be consistent with environmental requirements as

stated, in particular, in the Environment Quality Act. (R.S.Q., c. Q-2) and

regulations applicable to land used for industrial purposes, class “C” and the

Undersigned undertakes to deliver the sight leveled and clean. The

specifications may be obtained, on request, starting on April 14, 2008.

Page 9

TENDER(S)

(THE TENDERER MUST SUBMIT ITS BID(S) IN THE TABLE BELOW)

Lot # Description Tender Amount (in Canadian dollars)

Deposit (10%) (in Canadian dollars)

The 10% deposit must be denominated in Canadian currency and payable to Magnola Metallurgy Inc. Comments (if applicable): ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ _________________________ ________________________ Tenderer’s signature Date Name: Title: Tendering company:

MAGNOLA VIRTUAL DATA ROOM INDEX

Note: All documents included in this index are also available for consultation at Magnola’s plant located in Danville, Quebec, Canada. The following documents are only available on site at the plant:

• inventory of assets included in sublots 2.20, 2.34, 2.35 and 2.36; • information on buildings included in lot 8; • inventory of assets included in lot 10; and • additional technical documents related to the assets.

2

Lot 1 – Magnesium production machinery 3 Lot 2 – Plant machinery 4 Lot 3 – Electric substation and equipment 6 Lot 4 – Machine shop machinery 8 Lot 5 – Tooling and equipment 8 Lot 6 – Handling equipment 8 Lot 7 – Office furniture and equipment, computer

equipment 8 Lot 9 – Overhead cranes 8

3ID # - virtual data room

Information / Documents On site reference #

1 Magnesium production machinery

1.1 Diabon SGL Carbon HCL synthesis units

5

1.1.1 Asset description (English)

1.1.2 Asset description (French)

1.2 HCL acid boiler

8



1.3 500 m.t/h MgO storage and repulping system and flocculation/coagulation system

15



1.4 Chlorine storage and vaporization

16



1.5 Magnesium TECHMO trucks

22



1.6 Shunting trucks

25



1.7 Magnesium furnaces and BROCHOT casting lines

26





2 Plant machinery

2.1 PANNAVIS Belt Filters

1



2.2 GEO Slurry pumps

2



2.3 US FILTER, Press filters

3



2.4 STEARLING Chlorine compressors

4



2.5 Air compressors and drying system

6



2.6 Diesel generator 800 W

7



2.7 10 MW SOLAR Cogeneration units

9





2.8 Natural gas compressor system

10



2.9 JOHNSON steam boiler

11



2.10 Rotary dryer

12



2.11 BARMARC crusher

13



2.12 Vacuum cleaning system

14



2.13 STEDMAN crusher

17



2.14 Pumping and evaporation system

18



2.15 23 m.t/h Pneumatic conveyor system

19





2.16 1500 m³ storage silos

20



2.17 29 m.t/h Pneumatic conveyor system

21



2.18 Vacuum system

23



2.19 Glycol heat exchangers 13 000kw

24



2.23 Cooling tower MARLEY

32



2.37 Distribute control system

60



3 Electric substation and equipment

3.50 Medium Average switchgear and 600 volts CCM (bldg 350)

50






51



3.52 Medium and low Average switchgear and 600 volts CCM (bldg 610)

52



3.53 Medium Average switchgear and 600 volts CCM (bldg 500H)

53




54




55




56




57



3.58 Medium Average switchgear and 600 volts CCM (bldg 213-214)

58





3.59 Electric power substation 230 KV – Power transformers and rectifiers

59



4 Machine shop machinery

n/a

4.1 Asset inventory

5 Tooling and equipment

n/a

5.1 Asset inventory

6 Handling equipment

n/a

6.1 Asset inventory

7 Office furniture and equipment, computer equipment

n/a

7.1 Asset inventory

9 Overhead cranes

n/a

9.1 Asset inventory