Mr. Ed Lee reports

NEVADA CLEAN MAGNESIUM AND SCANMAG AS BECOME PARTNERS IN MELOY INNOVATION AND TECHNOLOGY CENTRE AS

Nevada Clean Magnesium Inc.'s joint venture partner ScanMag AS and two of its partners have formed a Norwegian technical development company for the mutual development of the technical process.

As per the recently signed joint venture agreement announced June 22, 2015, Nevada Clean Magnesium has contributed $3,000 (U.S.) for administrative costs and the acquisition of 25 per cent of Meloy Innovation and Technology Centre AS (MITC), a Norwegian technical development company formed by ScanMag AS and two of ScanMag's partners, Meloy Naeringsutvikling AS and MNU Meloy Innova AS. Each partner will now have a 25-per-cent interest in the company, with NCM and ScanMag sharing 50/50 on all the intellectual property and the technical developments. Edward Lee, chief executive officer, is to be appointed to the board of MITC representing NCM.

MITC has also received a 1.5 million Norwegian kronor grant from Innovation Norway (a state-owned company and a national development bank) through a collaborative application from the ScanMag and NCM team. MITC is now well financed starting with three million Norwegian kronors ($375,000 (U.S.)) of which includes ScanMag's initial contribution. The partners are very pleased to have these funds and expect to begin and complete phase 1 and 2 of the development programs.

Phase 1

Using a newly developed instrument that detects weight changes as material is heated, the raw materials intended for use in the magnesium reduction operation will be evaluated. This work will provide the fundamental engineering data needed to design the pilot-scale facility.

Phase 2

A detailed model of the reduction process will be constructed to provide a complete, dynamic mass and energy balance of the proposed operation. This model will be used to optimize the process design.

In addition, a thermodynamic evaluation of an alternative reducing agent will be performed. If this study proves the alternative reductant to be viable and the phase 1 data for this reductant is positive, the high-cost ferrosilicon reductant may be replaced with the alternative reductant. The benefits of this may be less carbon emissions and lower cost to produce magnesium thermally.

James Sever, PEng, of NCM and Finn Nordmo, PhD, of ScanMag will be appointed as administrators of MITC.

The purpose and scope of activities of the administrators are:

1. The co-ordination and organization of the exchange of the scientific findings of the parties and the project program;
2. To act as the contact persons and intermediaries for communication between the joint venturers;
3. To keep records in line with the requirements of any grants, local accounting and tax laws, and to allow the joint venturers to assess the financial position of MITC on a regular basis;
4. Co-ordinate the technical activities of the project, the overall legal, ethical and administrative management, the co-ordination of knowledge management and other innovation-related activities, oversee the fair and equitable handling of the project, oversee science and social issues related to the research activities conducted within the project, and any other specific support activities;
5. Monitor the scientific and technological execution of the project, including the documentation of the project results to allow the parties to make use of the project results.

NCM will be responsible for future development phase financing on a 50/50 contribution basis with ScanMag to MITC but not until NCM has received the initial payment of $2-million (U.S.) as stated in the joint venture agreement. NCM will provide technical process development and continued support for the ScanMag magnesium facility to be built in Glomfjord, Norway.

Ed Lee, CEO of NCM, says: "It's going to be very exciting to be a part of the development of the ScanMag facility as all the work carried out for this facility will definitely benefit our Tami-Mosi magnesium project in Nevada. Being able to lower capital investment risk by lowering the processing risks with a European partnership is more than we could ask for at this stage."

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