China Direct Industries in Definitive Agreement to Acquire 100% of Golden Trust Magnesium Industry; 80% of Lingshi Xinghai Magnesium Industry

China Direct Industries, Inc. CDII announced today that it has entered into a series of agreements to acquire a 100% ownership interest in Golden Trust Magnesium Industry Co., Ltd. and an 80% ownership interest in Lingshi Xinghai Magnesium Industry Co., Ltd.. The acquisitions are part of management's ongoing plan to further consolidate its magnesium holdings as well as acquire additional facilities owned in whole or in part by Mr. Yuwei Huang, a member of the board of directors of China Direct Industries. Under the terms of the agreements China Direct Industries will issue up to 18.2 million shares of its common stock, transfer its $4.7 million interest in its subsidiary Excel Rise Technology Co., Ltd., and pay $4.8 million in cash or through the repayment of one of its intercompany loans to make the acquisitions in a deal totaling approximately $26.7 million. Closing of the acquisitions is conditioned upon (i) approval of the issuance of the common stock constituting the stock consideration provided for in the agreements to acquire these companies and in accordance with NASDAQ Market Place Rules and Regulations; (ii) the absence of any order or injunction of a court of competent jurisdiction that prohibits the consummation of the acquisitions, (iii) the absence of certain governmental restraints, and (iv) the accuracy of the representations and warranties of each party. A summary of the agreements is provided in a Form 8-K China Direct Industries filed with the Securities and Exchange Commission on September 6, 2011.