•EPSTechnologies,Inc.EPSTechnologies,Inc.CFD24-7@FortheUtilizationofNOxControlforClrallgillgFlameDYllamicsMinorcaMinesTaconitePlantProposal#514111415FirstAvenue,Suite500Mankato,MN56001March28,2006www.epstechnologies.comPage1of9Phone:507-625-2447Fax:507-625-5593EPSTechnologies,Inc.TableofContentsCompanyOverviewCFDCFD24-7®AdvantagesHowtheTechnologyWorksEnvironmentalConcernoftheTechnologyEngagementPlanTheProcessofEngagementToolsandSpecificationsAssumptionsIssuesandRisksEquipmenttobeTestedResourceRequirementsEntranceandTestScheduleTestScheduleBudgetandPricingValidity1415FirstAvenue,Suite500Mankato,MN56001www.epstechnologies.comPage2of9CltangingFlameDynamicsPage2222455566666788Phone:507-625-2447Fax:507-625-5593EPSTechnologies,Inc.CltangingFlameDynamicsCompanyOverviewEPSTechnologies,Inc.isaMinnesotabasedcompanythathasestablishedaninnovatedwayof"ChangingFlameDynamics·".TheproprietaryandpatentedCFD24-7technologyisscientificallybasedandwilldeliveractualresultsinthereductionofemissionofNOxandCO.TheCFD24-t¥Jiseasilyinstalledandcanbemaintainedinanyenvironment.CFD24-7®TechnologyTheCFD24-7®technologywasdevelopedtoaddressthereductionofNOx,COandCxHyfromthecombustionprocess.TheCFD24-7systeminjectsapatentedsolutionofplatinumandrhodium, alongwithadditionalcompounds.directlyintotheairstreamoftheburnertoincreaseitsefficiency.Theresultprovidesamorecompleteandcleanerburnofanyfossilfuel.Theplatinumparticlesgeneratemoreoxygenradicals.whichallowslessexcessairandtheRhodiumparticlesinhibittheNOxformation.Theseparticlessubsequentlyadheretothewallsandcontinuetoparticipateinheterogeneouscatalysis.Thisprocesscontinuestoimprovethereactionofemissionreduction.AdvantagesofCFD24-7®TechnologyandIn-FlameCatalysisTheCFD24-iK1technologywillmaintainthesameflametemperaturesusingsignificantlyreducedexcessairlevels(whereapplicable).henceproducinggreaterthermalefficiency.Thegreatercombustionefficiency,willreduceCOemissionsplusanoverallNOxreductionandpossiblyareductioninfuelconsumption.HowdoestheCFD24-7®TechnologyWork?Theaerosoldropletscontainingthecatalystpre-cursorsaltsfromthecatalystsolutionaredriedenteringthewarmregionoftheburner.Thefinedispersionofsaltparticlesdecomposeintoactivecatalystparticlesathightemperatures.Thisissimilartoacatalyticconverterinacarengine.CFD24-7®containssaltsofnoblemetalssuchasplatinum.rhodiumtogetherwithadditionalsaltswhichhavebeenpredictedandfoundbyexperiencetoenhanceperformance.Thecatalystisintroducedintotheflameasanaerosolintotheinletair.flame,orothersuitablesitewheretheyareconvertedintoanactivecatalyst.1415FirstAvenue,Suite500Mankato,MN56001www.epstechnologies.comPage30f9Phone:507-625-2447Fax:507-625-5593EPSTechnologies,Inc.CIIUlIgillGFlameDVllamicsThecarbonandchardepositsontheinteriorofboilersaresoonremoved,asplatinumandrhodiumatomsattachthemselvesandcatalystreactswithoxygen.NOxlevelscanbesignificantlyreducedtohelpattaincompliance.CorrosioninboilersfittedwithlowNOxburnerscanalsobeexpectedtobesignificantlyreduced.Thereisnoneedforexpensiveburnermodification,upgrades,anddeepstagedoperationsofposttreatmentadd-ons.CFDtechnologyissimpletofitandmaintain,andonlyashorttrialperiodisneededtoproveitsabilityandclaim,particularlysinceitsactionisalmostimmediateandtheemissionlevelscontinuetodropovertime.AnyEnvironmentalConcernoftheTechnology?ThedefiniteanswerisNO.CFD24_71H)technologyisonlyusedinpartsperbillion;thecatalystisutilizedbythereactionoftheprocessitself.Testshavenotbeenabletodetectanycatalyticcomponentsinthegasesenteringintotheatmosphere.1415FirstAvenue,Suite500Mankato,MN56001www.epstechnologies.comPage4of9Phone:507-625-2447Fax:507-625-5593EPSTechnologies,Inc.C/'0I,g;II8FlameDYllanr;csEngagementPlanThisengagementisdesignedtodemonstratetheeconomicandenvironmentalviabilityofEPSTechnologiesCFD24-7'11,)CombustionCatalystinaNaturalGasfiredDryerapplicationwitharunrateof200MMBTUsperhour.ThescopeandobjectiveistodemonstrateareductioninNOxemissionsutilizingCFD24-iTechnology.TheProcessofEngagement1.Establishabaselineoffuelconsumption,particulate,NOxandCOemissionspriortointroductionofCFD24-iIDCombustionCatalyst.2.EstablishabaselineofscheduledmaintenancepriortointroductionofCFD24-7'1YCombustionCatalyst.3.InstalltheCFD24-iIDDirectInjectorSystems.4.AdjustCatalystDirectInjectortoanoptimumoperatingratiooffuelrateandCFD24-7®.concentration.5.MonitorstackemissionsatvariousintervalsafterinstallationoftheCFD24-7!l.lDirectInjectorSystems6.Evaluatedataandassessresults.ToolsandSpecifications1.ECOMSixGasEmissionsAnalyzerwithHardwareandSoftwareinterface2.LaptopComputerwithExcelSoftwareandPrinter3.DecibelNoiseAnalyzer4.CFD24-7fi,JDeliverySystems-FiveDeliverySystems,eachwith(180gallontank,2redundantadjustable110voltpulsatingpumps,2redundantflowmeters,1tankstand,1spillcontainmentvessel,plastictubing,electricalcord,1deliverynozzle)andappropriateredundancyequipment5.CFD24-7CombustionCatalyst1415FirstAvenue,Suite500Mankato,MN56001www.epstechnologies.comPage5of9Phone:507-625-2447Fax:507-625-5593•.,t'Lpi"SEPSTechnologies,Inc...........,..............ChangillgFlameDYIlamicsAssumptionsCFD24-7willreduceemissionsdependentontheoptimizedmixingofCFD24-7to(a)intakeair,(b)residencetime,and(c)temperatureduringthetrialperiod.Itisessentialtomaintainaconstantloadatamutuallyagreeduponlevel.IssuesandRisksNoneEquipmenttobeTestedCaseNumber:122005EquipmentDescription:EquipmentOperation:ResourceRequirementsPersonnelNaturalGasfiredTaconiteDryer200MMBTUperhour1.MinorcaMinetoprovideoperationalpersonnel(tobetrainonimplementationanduseoftheCFD24-71@SystemthatwillbeworkingonMinorcaMineTaconiteDryer)2.TwoEPSTechnicians3.OneEPSTechnologiesProjectManagerEntranceandTestScheduleEntranceCriteria1.EngagementapprovalbyMinorcaMinewithPurchaseOrderanddeposit2.BaselinemaintenancescheduleandfuelcostdataprovidedtoEPSTechnologies3.MeasurementofFlueGasestoestablishabaselineofNOx,ParticulateandCOemissions1415FirstAvenue,Suite500Mankato,MN56001www.epstechnologies.comPage6of9Phone:507-625-2447Fax:507-625-5593EPSTechnologies,Inc.CltallgillGFlameDVllalllicsTestSchedulePhaseI(5days)1.Establishemissionsbaseline2.AssesssiterequirementsforCFD24-71YSystemsinstallationI3.InstallCFD24-7·SystemPhaseII(25days)1.BegininjectionofCFD24-ilY2.Monitoremissionsreductiontomeasuretheeffectsof24-il!lduringthiscontinuousrun-timeperiod1415FirstAvenue,Suite500Mankato,MN56001www.epstechnologies.comPage70f9Phone:507-625-2447Fax:507-625-5593EPSTechnologies,Inc.C/,allg;IIgFlameD,,"am;csBudgetandPricing1Month(30days)fortheapplicationofCFD24-7®:200MMBTU's:$44,500Theabovebudgetandpricingforonemonthincludes:1.CFD24-iKlCombustionCatalyst,DeliverySystemandCarrier2.EPSEngineers3.EPSTechnicians4.EPSTravelandExpensesTermsandConditions:Depositdueattimeofacceptance:$22,250withbalanceof$22,250duein15daysAftertheinitial1monthapplicationthebudgetandpricingforCFD24-7®:MonthlyYearly200MMBTU's:$38,497$461.964Note:EPSTechnologies,Inc.willissuediscountstoMinorcaMineasfollows:1%fora12-monthcontractengagement3%fora 2-yearcontractengagementOn-goingTermsandConditions:EPStosubmitinvoiceonthe20thofeachmonthtoMinorcaMinewithpaymentduein15days.TaxesBuyershallpayanytaximposedbyanygovernmentalbodyonthesale,delivery,useorotherhandlingofCFD24-7®soldhereunderorinconnectionwithProposaloranytransactioncontemplatedhereby.1415FirstAvenue,Suite500Mankato,MN56001www.epstechnologies.comPageSof9Phone:507-625-2447Fax:507-625-5593•EPSTechnologies,Inc.ChallgillgFlameDVllall/icsForceMajeureEPSshallnotberesponsibleforlossesordamagestoBuyer(oranythirdparty)occasionedbydelaysintheperformanceorthenonperformanceofanyofEPS'sobligationsorbylossofordamagetoanyoftheproductsspecifiedintheProposalwhencauseddirectlyorindirectlybyactsofGod,actsofgovernmentormilitaryauthority,casualty,riot,actsofBuyer,strikesorotherlabordifficulties,shortagesoflabor,suppliesandtransportationfacilitiesoranyothercausebeyondEPScontrol.Thescheduleshallbeadjustedinaccordancewiththeimpactofanysuchdelayorpostponementandthepriceshallbeequitablyadjustedtoincludealladditionalcosts,includingoverheads,plusareasonableprofitthereon.ValidityThisquotationisvalidfor60days.InterpretationandEnforcementAnycontractresultingfromthisProposalshallbeconstruedaccordingtothelawsofMinnesotawithoutgivingeffectstotheconflictoflawprovisionsthereofandsuitshallonlybeinstitutedfortheenforcementthereofinanystateorfederalcourtsituatetherein.1415FirstAvenue,Suite500Mankato,MN56001www.epstechnologies.comPage90f9Phone:507-625-2447Fax:507-625-5593•DaleFalkenborgFrom:'Sent:BernardGibbs[B.M.Gibbs@leeds.ac.uk]Wednesday,June28,20065:59AMDaleFalkenborgCc:SamRoy;KashifKhanSubject:RE:CalculationsDearDaleIhaverecalculatedthedatafordifferentbaselineswhichmakesquiteadifferencetotheNoxreductionsasyouwillseefromthespreadsheet.NoXreductionsareintherange12.3%to16.8%dependingonthebaseline.TheNOxemissionintons/yrhasalsobeencalculated.Unfortunatelyyoucannotaddtheemissionstogetherasyoudid.Ifthereareanydaysthatcanbeomittedpleaseletmeknow.Shouldthedatabecomparedwiththeoriginalagreedbaselineagreementof05/09/06?Apracticalquestion-wherewasthecatalystinjected?Isthereapostcombustionzoneataround1200Fwhereanadditivecouldbeinjected?BestWishesBernardFrom:DaleFalkenborg[mailto:dale@epstechnologies.com]Sent:22June200620:07To:BernardGibbs;TrevorGriffiths;KashifKhanCc:SamRoy;DickLundinSubject:CalculationsBernard:chedareKash'scalculationofNOxto3%excess02andmycalculationsofPPMtoTonsofNOx.Mycalculationsareintwos,oneisRawNOxdata,theotherisCorrectedto3%excess02.Pleasereviewourcalculationsforcorrectness.Thankyouforyourhelp!BestRegards,Dale7/6/2006StackABC095.6167133.875227.0898279.283887.2146.5333215.6182250.903797.6206.4818277.5407Av.BaselineavNOx.l02102.769219.86146.102119.5219.812518.89275.262118.58avNOx.l3%021768.8161868.0191957.5342123.7891929.54MayBaseline113.1383152228.5749286.3019avNOx.l3%021947.2851943.4292035.5682208.9672033.81225-May111.0419.58132.819.39170.3918.92276.2218.13avreduction87.4860614.87%123.12581573%172.97172131%231.34671595%ReductionMaybase2267%1900%2433%1919%Nox3%021505.771574.2521540.3941784.9624-May88.9219.86133.8819.521118.81276.118.2188.9213.48%133.88837%202.9234768%238.12341349%21.41%1192%1122%1683%Nox3%021530.451711.7511807.1291837.2457-Jun106.3519.6139.9119.35219.5918.78271.7118.3185.0817.21%126.37031351%208.19625.28%243.3851158%2480%1686%892%1499%Nox3%021464.3581615.7351854.0851877.8418-Jun12619.514419.2720018.824118.48A93.6892%123.6811535%191.42861291%231.04131606%17.27%18.63%1625%1930%Nox3%0216111581.351704.7621782.6038-Jun11919.5314919.3123218.730218.13B90.335771210%131.1951020%211.9636357%252.93868.11%2015%1369%727%1165%Nox3%021554.8181677.4211887.6361951.55212-Jun10539619.601138.0319.368213.4518.786266.3418.484.3817117.89%126.13711367%202.9491767%247.16351021%2542%1702%11.21%1367%Nox3%021452.3391612.7531807.3581906.994OvereallAvReductionsMayBase0.2195340.1618540.1319890.1593961682%1519.7891628.8771766.8941856.8661693.107Grossemissions2033.812ppm3%02basedonMaybaselineNox608.6793Ibslhr2592.974tons/yrbasedon8520hrlyroperationStackABC095.6167133.875227.0898279.283887.2146.5333215.6182250.903797.6206.4818277.5407Av.BaselineavNOx.l02102.769219.86146.102119.5219.812518.89275.262118.58avNOx.l3%021768.8161868.0191957.5342123.7891929.54MayBaseline113.1383152228.5749286.3019avNOx.l3%021947.2851943.4292035.5682208.967 2033.81225-May111.0419.58132.819.39170.3918.92276.2218.13avreduction87.486061487%123.12581573%172.97172131%231.34671595%ReductionMaybase22.67%1900%2433%1919%Nox3%021505.771574.2521540.3941784.9624-May88.9219.86133.8819.521118.81276.118.2188.921348%133.88837%202.92347.68%238.12341349%2141%11.92%11.22%1683%Nox3%021530.451711.7511807.1291837.2457-Jun106.3519.6139.9119.35219.5918.78271.7118.3185.0817.21%126.37031351%208.1962528%243.3851158%24.80%1686%892%1499%Nox3%021464.3581615.7351854.0851877.8418-Jun12619.514419.2720018.824118.48A93.68.92%123.68115.35%191.428612.91%231.04131606%1727%1863%16.25%1930%Nox3%0216111581.351704.7621782.6038-Jun11919.5314919.3123218.730218.13B90.335771210%131.1951020%211.9636357%252.9386811%2015%1369%727%1165%Nox3%021554.8181677.4211887.6361951.55212-Jun105.39619.601138.0319.368213.4518.786266.3418.484.381711789%126.13711367%202.9491767%247.16351021%2542%1702%1121%1367%Nox3%021452.3391612.7531807.3581906.994OverallAvReductions0.1407870.128019009738801256831230%OvereallAvReductionsMayBase0.2195340.1618540.1319890.15939616.82%1519.7891628.8771766.8941856.8661693.107Grossemissions2033.812ppm3%02basedonMaybaselineNox608.6793Ibslhr2592.974tonslyrbasedon8520hr/yroperation