A closer look however moots such speculation.

A darling of institutional investors like Macquarie Bank and Jennings Capital, the company's issued and outstanding stock is held 80% by institutions. With management in possession of only 5%, that leaves a paltry 15% in retail hands.

MagIndustries has just shy of 200 million shares outstanding, and it averages 6.7 million shares of trading each month. Monday, however was a different story.

The company was the day's high trader with 2.8 million shares trading hands.

The reason?

Mag announced a 12 year marketing agreement on June 30 with Ameropa Group, a Swiss, privately owned international grain and fertilizer trader. The company employs 2200 people worldwide and sells millions of tons of grain, fertilizer, petrochemicals and metals each year.

Considering the potash production from Mag's Kouilou project isn't expected to begin until 2011 at the earliest, the forward sales agreement represents a real coup for Mag, and demonstrates how forward thinking agricultural commodities traders are to secure future supply.

The Kouilou potash deposit is one of the largest greenfield potash sites in the world, with plans to produce 0.6m tonnes of KCl annually beginning in 2011, increasing to 1.2m tonnes by 2013, over a mine life which is likely to extend beyond 30 years. Kouilou will be among the lowest cost producers of potash thanks to its proximity to port facilities, access to low cost natural gas and solution mining.

The agreement provides for Mag to supply of 1.2 million tonnes of granular potassium chloride per year (representing both phases of MagPotash's Kouilou project) to be sold by Ameropa. The initial supply of 600,000 tonnes per year ("tpy") from phase I of the project is anticipated to begin in the first quarter of 2011 with the remaining 600,000 tpy anticipated to commence by the first quarter of 2013.

Mag announced the same day it would receive a CA$70 million investment from Ameropa at $5.00 a share. This represents a 44% premium over the company's closing price of CA$3.45 on Monday. A separate investment under the same terms for $35 million will close simultaneously from Portonovo, a company controlled by French businessman Hubert Pendino, who is also Director General of Socofran, a French construction company based in Pointe Noire in the DRC.

These deals puts MAG in a whole new class. With $105 million in the bank, and guaranteed sales of mine production for 12 years, the risk associated with doing business in the Congo is substantially diminished. Factoring in the participation by a major Congolese company (Socofran), and its clear the company has the connections necessary to achieve success.

That said, there are some risk factors to bear in mind before diving whole-heartedly into an investment in MagIndustries.

The DRC was embroiled in civil war throughout the 90's until current president Denis Sassou-Nguesso, took power in a coup in 1997. Presidential elections next year will be an important test of the openness, state of democracy and political health of the country.

Also, according to a buy recommendation issued by Macquarrie Bank this month, " The feasibility study dating from February 2008 estimates the capital cost for Kouilou to be in the range of $723m with operating costs of $83/tonne. However, with a start date in 2011, cost estimates are likely to escalate, affecting the economics of the deposit."

This in-depth report which provided much of the source material for this article none-the-less indicates a "buy" recommendation with a target price of $7 a share.

"Within the next two months, MagMinerals is expected to sign a Potash Investment Agreement and an Environmental and Social Impact Assessment and complete a new resource estimate", the report advises. "These milestones should lead to bank financing, the IPO of MagMinerals and construction activities by year end."

Did somebody say "IPO"?

You bet. And this is what I really like about this deal.

The company is going to spin off MagMinerals, which holds the potash deal, into an entirely new TSX-listed company,.

And where is price of potash headed?

Well according to ScotiaBank's Commodity Price Index press release dated June 19th, "Potash prices at the Port of Vancouver jumped to US$525 per tonne in May from US$504 in April and will likely climb to an average of more than US$800 by late 2008. Both BPC and IPC (acting on behalf of Silvinit) have now sold cargoes of standard potassium chloride to South East Asia at US$1,000 cfr (delivered).

Prices for granular material in Brazil, partly bound for sugar cane and ethanol production, will likely rise to US$800 cfr in July and US$1,000 in August. Most farmers can afford to pay high prices for potash, given rising yields from potash application and today's high crop prices (especially in biofuels)."