Magellan Aerospace Announces New Defence Work Totaling $80 Million

TORONTO, Sept. 7 /CNW/ - Magellan Aerospace announced today the exercise
of option quantities, valued at $30 million ($Cdn) on a long-term contract
with the U.S. Department of Defense to supply aeroengine compressor
components. Magellan also announced additional defence wins over the past
several months totaling $50 million ($Cdn) for engine and airframe
subassemblies and components. The work will be carried out in Magellan's
facilities in Middleton, MA, Long Island, NY, Middletown, OH, Mississauga, ON,
and Winnipeg, MB.
The U.S. DoD option exercise is for two years on a requirements type
contract, originally announced in June 2003, and includes the supply of a
variety of precision-machined components for the J85 aircraft engine used on
US Air Force T-38 trainers, and F-5 aircraft internationally. Designed by
General Electric, there are over 6000 J85 engines operational worldwide, and
the J85 will remain in service with the U.S. Air Force until 2040. Magellan is
licensed by General Electric to manufacture J85 parts. Three 2-year options
remain to be exercised.
Other defence work announced includes complex engine front-frame
assemblies for a variant of the F404 engine, awarded by GE Aircraft Engines,
heat-tolerant dorsal fins for Raytheon air defence missiles, and a number of
machined assemblies for various military aircraft and helicopters in support
of the U.S. DoD.
Magellan also secured an expansion of its previously announced (February
2004) long-term Revenue Sharing Agreement with General Electric Company's GE
Transportation, Aircraft Engines unit to achieve 100% of F414 exhaust frames
required, effective June 2005. Magellan will now produce 100% of both the
front and exhaust frames of the engine. Magellan's additional investment under
the Agreement for this increased share will be $7 million ($US), funded from
internally generated cash flow and existing bank lines. Under the Revenue
Sharing Agreement, Magellan will earn revenue on every GE F414 engine sale
with a market potential of engine sales for 25 years or more. The F414 is the
U.S. Navy's newest and most advanced-technology production fighter engine, and
powers the Boeing F/A-18E/F Super Hornet aircraft in service with the U.S.
Navy.

Magellan Aerospace Corporation is one of the world's most integrated and
comprehensive aerospace industry suppliers. Magellan designs, engineers, and
manufactures aeroengine and aerostructure components for aerospace markets,
advanced products for military and space markets, and complementary specialty
products. Magellan is a public company whose shares trade on the Toronto Stock
Exchange (TSX: MAL), with operating units throughout the United States, the
United Kingdom and Canada.