BISCHOFITE IN UKRAINE: AN ALTERNATIVE SOURCE OF MAGNESIUM CHLORIDE

ROLAND F. RIVERA SANTIAGO, PHD VICE PRESIDENT, MAGNESIUMUSA, INC. MAGFORUM2016 (VIENNA, AUSTRIA) 10 MAY 2016 OUTLINE

• INTRODUCTION AND HISTORY • BISCHOFITE PRODUCTION FIGURES • MAGNESIUM CHLORIDE PRODUCTION FIGURES • SUMMARY • QUESTIONS BISCHOFITE

• MINERAL FORM OF MGCL2(6H2O) • DISCOVERED IN 1877 BY CARL-CHRISTIAN OSCHENIUS • NAMED AFTER GEOLOGIST KARL GUSTAV BISCHOF • DEPOSITS ARE FORMED FROM ANCIENT SEABEDS • BELIEVED TO ORIGINATE FROM SEAS OF THE PERMIAN PERIOD • OFTEN CONTAINS TRACE AMOUNTS OF OTHER ELEMENTS • CA, K, NA, BR • FOUND IN VARIOUS LOCATIONS AROUND THE WORLD • CHILE • NETHERLANDS • GERMANY • KAZAKHSTAN • UKRAINE (POLTAVA)

SOURCE: HTTP://WWW.MINDAT.ORG/MIN-681.HTML POLTAVA, UKRAINE

DISTANCE BETWEEN POLTAVA AND DONETSK (BY ROAD): 396.1 KM SOURCE: GOOGLE MAPS

SOURCE:HTTP://WWW.LONELYPLANET.COM/MAPS/EUROPE/UKRAINE/ HISTORY OF BISCHOFITE MINES IN POLTAVA

• DISCOVERED IN 1992 • UKRAINIAN MINING COMPANY (FIRMA MINERAL, LTD.) • BISCHOFITE INFRASTRUCTURE HAS BEEN DEVELOPED AND MAINTAINED BY FIRMA MINERAL SINCE THE INITIAL DISCOVERY • RESOURCE EXTRACTION • TRANSPORTATION • POLTAVA BISCHOFITE HAS BEEN USED IN VARIOUS WAYS DOMESTICALLY • NO MAJOR INTERNATIONAL PRESENCE

SOURCE: HTTP://WWW.MINERAL.POLTAVA.UA/INDEX.PHP/EN/ POLTAVA BISCHOFITE MINE FEATURES

• MINE IS INTEGRATED WITH RAILROAD • EXTRACTION AND TRANSPORT ARE HIGHLY STREAMLINE • LARGE STORAGE CAPACITY • TWO STOREHOUSES; 3,000 METRIC TONS EACH • DEPOSIT DEPTH • 2650M (8694 FEET) • ESTIMATED RESERVES • ~3-4 BILLION M3 OF SALT

SOURCES AVAILABLE UPON REQUEST POLTAVA BISCHOFITE CHARACTERISTICS

• PHYSICAL CHARACTERISTICS • BROWNISH WHEN UNPROCESSED • PALE TO YELLOWISH COLOR • ODORLESS • ELEMENTAL PROFILE • TRACE AMOUNTS OF NA, K, BR • OTHER ELEMENTS AT <1 PPM • PROPERTIES • PRESENT IN HIGHLY PURE MINERAL FORM

• HIGH MGCL2 CONTENT POLTAVA BISCHOFITE PRODUCTS

• CONSTRUCTION MATERIAL • ADDITIVE IN THE CREATION OF CEMENT, FLOORS

• FOOD ADDITIVE • ADDED TO INFANT FORMULA AND SOFT DRINKS • IDENTICAL CHEMICAL FORMULA TO KONA NIGARI WATER

• HOUSEHOLD CLEANERS AND REMEDIES

• REFRACTORIES

• ROADS AND SIDEWALKS • DISTRIBUTED AS ROCK SALT

• SOLAR PANELS

• NATURAL GAS EXTRACTION • ADDITIVE TO HYDRATE INHIBITOR SOURCES AVAILABLE UPON REQUEST; IMAGES FROM HTTP://BISHOFIT-POLTAVSKIJ.ALL.BIZ/EN/GOODS RESEARCH ON POLTAVA BISCHOFITE

• AGRICULTURE (SOURCE: VOLGOGRAD AGRICULTURAL ACADEMY) • BISCHOFITE IN ANIMAL DIETS INCREASES BODYWEIGHT • BISCHOFITE AS A FERTILIZER HELPS PREVENT PESTS • HUMAN HEALTH (SOURCE: UKRAINIAN MEDICAL DENTAL ACADEMY) • PRELIMINARY EVIDENCE OF A HYPOTENSIVE EFFECT • IMPLICATED IN AN ANTI-INFLAMMATORY ROLE

SOURCES AVAILABLE UPON REQUEST CURRENT STATUS OF POLTAVA BISCHOFITE PRODUCTION

• THE POLTAVA BISCHOFITE MINE IS CAPABLE OF PRODUCING UP TO 10,000 METRIC TONS OF BISCHOFITE BRINE/MONTH • PRODUCT QUALITY HAS BEEN VERIFIED BY US AND UKRAINE LABORATORIES • THE MINING OPERATION IS ALSO CAPABLE OF REFINING BISCHOFITE INTO HIGH-PURITY MAGNESIUM CHLORIDE SALT • ALSO VERIFIED BY US AND UKRAINE LABORATORIES • MAGNESIUMUSA AND ITS PARTNERS HAVE EXCLUSIVE RIGHTS TO DISTRIBUTE THESE PRODUCTS OUTSIDE OF UKRAINE PURITY ANALYSIS FOR BISCHOFITE

• THIS FIGURE DOES NOT INCLUDE THE H2O CONTENT FOR MGCL2(6H2O) • CONTAINS VERY SMALL AMOUNTS OF OTHER ELEMENTS

SOURCES AVAILABLE UPON REQUEST PURITY ANALYSIS FOR BISCHOFITE

199 PPM POTASSIUM CONTENT PURITY ANALYSIS FOR BISCHOFITE

315 PPM SODIUM CONTENT TOXICITY ANALYSIS FOR BISCHOFITE

NO DETECTABLE MICROBE, YEAST, OR MOLD PRESENCE Limited Liability Company

“Bears Logistic Cherkasy”

Ukraine, 19602, Cherkasy, Ruska Poliana village 67 Shevchenko Street Tel./fax: +38 0472 55 28 37 Tel./fax: +38 04472 55 28 37

PASSPORT MAGNESIUM CHLORIDE (BISHOFITE) TU U [Technical Specifications of Ukraine] 24.1-33346498-004:2008

Lot number: 1 Amount of places in the lot: 72

Lot Net Weight: 72000 kg Lot Gross Weight: 72147

Production date: 04.11.2015 PURITY ANALYSIS FOR MAGNESIUMName of packaging: polypropyl CHLORIDEene containers (big bag) - 1000 kg, 25 kg each bag

ANALYTICAL INFORMATION No. The name of indicators Norm Actually 1. Exterior view Needle-type crystals corresponds Color: from white to light gray with shades from yellow to light brown 2. Smell Without smell corresponds 3. Hydrogen index, units (рН),29% From 5 to 7 6 of solution γ= 1.28g/cm3

4. Mass fraction of МgСl2х6Н2O, % Not less than 97 98.2 5. Mass fraction of magnesium ions Mg2+, % Not less than 11.6 11.9

2- 6. Mass fraction of sulfate ions (8С4) , % Not more than 1 0.66 7. Mass fraction of alkali metal ions (Nа+ + К+), Not more than 0.8 was not determined % 8. Mass fraction of water-insoluble residue, % Not more than 0.2 0.01

CONCLUSION: corresponds requirements of TU U 24.1-33346498-004:2008 */round seal: Ukraine* Cherkasy region* Ruska Poliana village* Limited Liability Company* 35703542* Bears Logistic Cherkasy No.1 Head of laboratory

INFORMATION FOR CONSUMERS: Magnesium chloride is fire and explosion safe and doesn’t form any toxic compounds in the air and waste water environment and in the presence of other substances. SUMMARY

• POLTAVA, UKRAINE HAS A MINE THAT IS CAPABLE OF LARGE-SCALE PRODUCTION AND REFINEMENT OF BISCHOFITE • THIS BISCHOFITE DOES NOT NEED TO BE SEPARATED FROM OTHER MINERALS

• ALSO CAPABLE OF PRODUCING MGCL2 SALT • BISCHOFITE IS A MINERAL WITH A VARIETY OF USEFUL APPLICATIONS • COMMERCIAL, INDUSTRIAL, HEALTH, ETC.

• POLTAVA BISCHOFITE AND MGCL2 SALT CAN BE REFINED TO A VERY HIGH PURITY LEVEL • PRIVATELY HELD COMPANY WITH EXCLUSIVE RIGHTS TO DISTRIBUTE POLTAVA BISCHOFITE AND MAGNESIUM CHLORIDE SALT • CARNALLITE CAN BE PRODUCED UPON REQUEST • HIGH PURITY PRODUCTS • TESTED IN US AND UKRAINE LABORATORIES • LARGE AMOUNTS FOR INDUSTRIAL USE ARE AVAILABLE • MAIN OFFICE IN NEW YORK, USA; PARTNER OFFICE IN GERMANY • WE LOOK FORWARD TO MEETING YOU AT OUR BOOTH QUESTIONS?