Ann: Quarterly Report to 31 March 2018, page-5

I actually thought the update was encouraging, more progress than I had expected...seems something has actually happened. Initial modifications made, additional areas for improvement found, 3rd run planned. Hope this actually goes somewhere. All we can hope for is the tests get complete, the results are good and brings other parties to the table.

"The test work program is being progressed in stages, and development has focused on the critical first process stage; the EVAP (Evaporation) unit:

* The initial EVAP commissioning run was undertaken last year and indicated several areas that required modification to improve operations. This has been completed.

* A second run was undertaken in March 2018 following the modifications and the EVAP unit produced excellent mixed oxide-chloride pellets at design capacity of approximately 50 kg per hour. Areas for further improvement were identified and were scheduled to be implemented preparatory to a third run planned for the second quarter of this year.

* The planned improvements included fabrication of a bottom-fluidised constant density tank to deliver a consistent slurry feed to the EVAP unit, increasing the capacity of the gas supply, and new equipment to enhance the discharge of the iron chloride/iron oxide/zinc oxide pellets produced in the unit.

* A further run, aimed at increasing the EVAP’s production rate to 100 kg per hour, will be undertaken as soon as the upgrade work is completed. "

Regards,
Fergus