Ms. Sophy Cesar reports

ARGEX TITANIUM AWARDS TECNICAS REUNIDAS EPC CONTRACT

Argex Titanium Inc.'s newly formed, wholly owned subsidiary, Argex Canada Inc., has awarded an engineering, procurement and construction contract to the Tecnicas Reunidas Group (TR) for Argex's first industrial-scale 50,000-tonne-per-annum titanium dioxide (TiO2) plant, which will be located in Salaberry-de-Valleyfield, Canada.

The EPC contract will be performed in two phases. The first phase is the front-end engineering design completion (FEED/FEL3) work and the second phase will be for the detailed design and construction portion of the project. The FEED/FEL3 will be undertaken at TR's headquarters in Madrid based on Argex's basic design process package for an expected cost of $10-million (U.S.). The work on the FEED/FEL3 will only commence upon the issuance of a limited notice to proceed (LNTP) to be issued once Argex receives the financing for the FEED/FEL3. If such LNTP is not issued by Argex Canada by June 29, 2015, TR may elect to terminate the EPC contract. Upon completion of the FEED/FEL3, the parties will agree on a guaranteed target contract price (GTCP) for the construction portion of the work.

The GTCP will be based on a 50/50 shared-cost savings/overrun approach between Argex Canada and TR. The GTCP's expected value will be determined during the initial period but the overall value of the EPC contract (including the FEED/FEL3 portion) is currently estimated at approximately $200-million (U.S.).

"The finalization of the EPC contract represents an important step in the realization of our project," stated Richard Poulin, executive vice-president of Argex. "Tecnicas Reunidas's deep experience in similar projects and TR's know-how acquired from its own in-house solvent extraction technology facility represent an important value added to the construction of our Valleyfield facility."

The Tecnicas Reunidas Group is an international general contractor, engaging in the engineering, design and construction of various types of industrial facilities for a broad spectrum of customers throughout the world, including many of the principal national oil companies as well as several multinational companies.

Most of TR's business is concentrated on large turnkey industrial projects, although it also provides engineering, management, start-up and operating services for industrial plants. Since 1960, the TR group of companies has designed and built more than 1,000 industrial plants worldwide.

TR's multinational clients and licensors include the world's leading companies. The projects have been developed in over 50 countries covering the six continents. International projects account for 78 per cent of the company's annual turnover.

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