Nevada Clean contracts Lindon Acres for pilot furnace

Oct 6, 2015

CONTRACT SIGNED TO BUILD A BENCH SCALE PILOT FURNACE FOR TESTING IN NORTH AMERICA

Nevada Clean Magnesium Inc. has contracted Lindon Acres Enterprises Ltd., located in Fort St. John, B.C., to build a bench-scale pilot furnace with the technical assistance from James Sever, PEng, of Alpha Omega Inc. in Spokane, Wash., who is also the company’s president and a director of NCM.

The fabrication of the bench pilot furnace will provide the opportunity to identify and correct potential design flaws when the commercial pilot furnaces are designed and constructed. It is expected that these units will initially be built for the Norwegian facility owned by ScanMag AS.

The bench-scale pilot furnace is designed such that it can be configured not only for the basic process, as identified in the company’s National Instrument 43-101 preliminary economic assessment report, but also modified to continuous operation with steady inflow of raw materials and outflow of residue. It should also be possible to test three alternative condenser designs.

The dolomite to be used in the test program was obtained from the retained samples of the Tami Mosi drill programs. In accordance with NCM’s revised NI 43-101 preliminary economic assessment study completed July 4, 2014, initial work will utilize ferrosilicon as reductant and produce 99.8-per-cent-grade magnesium buttons. This is expected to provide the proof of concept that the basic concept to produce the magnesium metal from the Tami Mosi dolomite in Nevada is viable. Alternative reductants will also be assessed.

Lindon Acres Ltd. will be issued a total of two million shares of common stock of Nevada Clean Magnesium as compensation for the services rendered and expenses incurred in the construction of the furnace.

The shares will be issued as follows:

500,000 at the time of completed procurement of materials;
500,000 at the time of completed furnace shell fabrication;
One million at the time of total furnace construction with complete instrumentation.

Construction of the furnace is expected to be completed mid-December, 2015, and the process testing program is to begin shortly thereafter. This is expected to coincide with the completion of the materials testing program currently taking place by Meloy Innovatation and Technology Center AS (MITC) in Norway (refer to Nevada Clean Magnesium’s news release dated Sept. 23, 2015).

This transaction is subject to TSX Venture Exchange approval.

Edward Lee, chief executive officer for Nevada Clean Magnesium, explained: “We are very excited to be proceeding with the fabrication of this bench pilot furnace. It will allow us to finalize the design of the full-scale pilot furnace and provide the opportunity for the testing of alternate reductants and condensers. This will also give us a better understanding of the efficiencies we are expecting to achieve.

“The timing is right for primary magnesium metal production, especially if it can happen within the [United States]. The metal has a bright future with more opportunities than ever before. The material applications for magnesium metal are constantly evolving and expanding for three major industry sectors: auto manufacturing to meet the CAFE [corporate average fuel economy] standards for 2025 by using magnesium to lighten the vehicle weight; the aerospace industry due to the recent acceptance of magnesium for use in passenger spaces in commercial airlines by the Federal Aviation Administration (FAA) and its European counterpart, the European Aviation Safety Agency (EASA); and the energy sector, where there is a drive to replace the lithium battery market with a magnesium battery, which will be more efficient and environmentally friendly as a power supply for electric cars, as well as conventional dry-cell applications. For our company to potentially be in the position to help satisfy the upcoming demand and stimulate new applications within the [United States] is very unique.”

Qualified person

James Sever, PEng, a qualified person recognized under NI 43-101, supervised the preparation and approves the technical content in this news release.

http://www.nevadacmi.com/news/releases