Mr. Ed Lee reports

NEVADA CLEAN MAGNESIUM RENEGOTIATES INVESTMENT CHANGES TO JOINT VENTURE WITH SCANMAG AS

Following further discussions, Nevada Clean Magnesium Inc. has restructured its originally announced joint venture terms with ScanMag AS of Norway. The renegotiated terms are as follows:

• $5-million (U.S.) total contribution from ScanMag AS to Nevada Clean Magnesium (NCM), payable over four years, commencing with the first major payment of $2-million within 12 months, followed by 36 monthly payments of $83,300 (U.S.);
• 10-per-cent prefinancing equity in ScanMag dilutable down to 2-per-cent undiluted interest;
• Upon NCM receiving the $5-million (U.S.) investment, ScanMag AS to receive 12 per cent of equity shares of NCM;
• NCM and ScanMag to establish a separate technical development company for the testing of aspects of the magensium processing proof of concept through a 50-50 owned Norwegian subsidiary based in Glomfjord, Norway;
• ScanMag AS to finance up to $500,000 with an initial $250,000 contribution for the joint venture, after which each party pays its proportional share;
• Both NCM and ScanMag AS to be entitled to the data and findings developed through the joint venture.

The boards of directors of both companies have approved the new agreement terms and a joint venture agreement is expected to be signed shortly. This relationship and renegotiated terms will terminate and render void all previous agreements between NCM and ScanMag AS. The transaction with ScanMag AS remains subject to TSX Venture Exchange approval. Scan Mag AS and Nevada Clean Magnesium independently recognized the opportunity to profitably produce magnesium metal in Europe and in North America and to provide a core industry from which other manufacturing can develop. Both companies have a high-quality dolomite deposit from which to extract the magnesium metal. In defining the approach to produce magnesium metal, both companies determined that a thermal reduction approach offered the highest probability of success with the lowest impact on the environment. These views lead to the identification of many common areas of process equipment and operational improvements, for instance, the selection of new calciner technology (Calix) by both companies.

Linking both companies through a joint venture where the independence of each company is maintained will allow for cultural and governmental regulatory differences and will stimulate the development of both companies' primary projects to produce magnesium in Europe and North America. The synergies, which are already evident with the interaction of personnel from both companies, should ensure faster development of both projects and enhance the probability for success.

By working together, only one pilot facility need be constructed and the information gained will benefit both. The first plant to be operational will become the training resource for the people from the second plant to come on-line. These people would also provide the necessary extra manpower needed in the start-up of a new facility. Conversely personnel from the first plant will be made available to provide start-up assistance.

Should new proprietary technology be developed, access by both companies will enable rapid adaption and maximize the benefits while reducing the risk. Indeed by linking both companies in a joint venture, the resulting cooperation will increase the rate of implementation of all aspects of the technology while decreasing the cost and risk for both projects.

We seek Safe Harbor.