(MENAFN- ProactiveInvestors)Fuel technology specialist MagneGas (NASDAQ: MNGA) has landed a new deal with Green Arc Supply which it says signifies a "new era" in its expansion strategy. Under the terms of a "gasifier agreement" MagneGas will manufacture and sell to Green Arc a 100kw Plasma-Arc system for US$775000 to distribute MagneGas2 fuel for the metal cutting market as a replacement to acetylene. The MagneGas fuel can be used as a replacement to natural gas or for metal cutting. Under the distribution deal MagneGas will receive royalty payments of around 6% of gross sales. Green Arc will have exclusive distribution rights for parts of Louisiana and Texas with non-exclusive distribution rights in remaining regions of Louisiana and Texas and all of Arkansas Mississippi and Oklahoma. Green Arc also has the right to expand their exclusivity in those states with the purchase of additional systems. Green Arc says it plans to expand aggressively with the purchase of several additional systems in the coming months and so MagneGas has already begun expanding its manufacturing capability. MagneGas chief executive Ermanno Santilli told investors: "We are excited to be joining forces with Green Arc Supply to expand MagneGas availability into the South. "We are executing on our plan to expand fuel sales nationally with this the first equipment sale in Company history in the United States. "We believe this agreement serves as a turning point for the Company strategy as we begin our rapid expansion plans. We believe there are many more to come as we increase our fuel sales across the United States.." "Multiple tests have shown that MagneGas cuts cleaner faster and is more economical than acetylene which is ideal for this area where productivity is key to success. We look forward to expanding into multiple regions of the South" added Rafe Dean vide president of operations at Green Arc Supply. Yesterday the company said revenue for the three months to end September had risen 326% to US$623893 from US$146400 for the same period last year while gross margins were lifted to 35% from 33% in the same quarter in 2014. The shares fluctuated on Friday and were last flat at C$1.14 at 12:49 p.m. in Toronto. The stock has risen 68% so far this year.
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