Release: Magnus Energy: Dispute regarding acquisition of 72% of the issues share capital of PT Deefu

(July 4, 2011)--Further to the announcements broadcasted on 03 December 2010 and 13 April 2011, the Board of Directors of Magnus Energy Group Ltd. (?Company?) wishes to announce that the Company and its wholly-owned subsidiary Antig Investments Pte Ltd (collectively referred to as the ?Claimants?) have on 29 June 2011 initiated arbitration proceedings against Tjong Very Sumito (?1st Respondent?), Iman Haryanto (?2nd Respondent?) and Herman Aries Tintowo (?3rd Respondent?)(collectively referred to as the ?Respondents?) for various breaches of the Shares Sale and Purchase Agreement dated 23 November 2004 (?the SPA?).

The SPA was for the acquisition of 72% of the shares in PT Deefu Chemical Indonesia (?PT Deefu?) and was to have given the Company indirect ownership and control of the right to mine and extract coal from the Kuaro coal formation located at Kabupaten Pasir, East Kalimantan, Indonesia.

The above development may have a material impact upon the Group, and the Company will make further announcement(s) as and when there are material developments in relation to the aforesaid matter. (end of release)