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DNEPRO PLANT

DNEPRO METALLURGY PRODUCTION PLANT IS SITUATED IN DNEPROPETROVSK, UKRAINE

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DNEPRO PLANT

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  1. Soter Metallurgy DnepropetrovskUkraine

  2. High Purity Zirconium Tetrafluoride. Production by sublimation*. The main asset of the Company is a currently-dormant industrial sublimation installation, Pritok-3. Facility capable of producing 120 tons of Zirconium Tetrafluoride annually. A group of specialists with unique know-how is ready to re-start the facility immediately. * USA, United Kingdom, Japan, and France are the leading countries in the production of high purity zirconium tetrafluoride. SOTER METALLURGY

  3. Primary use of zirconium tetrafluoride: One of the structural components in various optics, such as lenses. One of the structural components in optic fibers. Additional uses: Active medium for lasers, In production of electrolytes; As the basis for fluorescent materials. Usage of High Purity Zirconium Tetrafluoride

  4. Key factors of liquidity • Production of high purity Zirconium (content of hafnium between 0.002% and 0.005%) • Stable market (demand still exceeds supply) • Production can be ramped up very quickly thanks to high availability of raw materials and production facilities • Lack of competitors in the region (ex-USSR) • Team of specialists with unique know-how

  5. Main financial and technical indicators • Production facilities can process 5 sublimations (purifications) per month • Each sublimation takes 4 days (96 hours) • Each sublimation requires 3 tons of raw material, and produces 2.5 tons of output, for a total plant production of 12.5 tons per month • Cost of production is $200,000 per tonThis is 43% lower than a similar plant in the USA that produces lower purity output • Raw materials cost $50,000 per ton Monthly cost of raw materials is, therefore, $750,000 • All other monthly costs will not exceed $250,000 • We believe the plant can throw off $1,500,000 net per month

  6. Prospects of production Source of raw materials is a mine at the Volnogorsk field, which requires fluoridation at another facility (Zirkony) nearby. We believe that the process could be streamlined in order to increase the number of sublimations, and, therefore, overall production of Zirconium Tetraflouride. There are many other important uses of Zirconium Tetrafluoride beyond optic fibers: Zeiss glass, radiation-resistant glass for nuclear and medial purposes, and also food utensils. Finally, it is also used as an additive for metallurgy, and in the production of the world’s best paints. While the plant is currently configured for production of ultra-pure (>99.999%) zirconium tetrafluoride, it may also be modified to produce other ultra-pure substances for industry, perfumes, medicine, etc. Hafnium is the main byproduct in the production of zirconium tetrafluoride. We have not considered the benefits of producing this material in this presentation.

  7. Investment proposal • The proposal is to take a 50% stake in Soter, costing $6,000,000. • The main asset of Soter is an industry-leading sublimation process, and a group of specialists capable of operating it • Estimated annual production is 120 tons of Zirconium Tetrafluoride • All proceeds from the sale of the stake will be used to get the plant running again, acquiring raw materials, and organizing sales. • The Fund will keep its presence in the Company after the deal.

  8. Contacts Fund Manager: Volodymyr Bobylyev vb@epfcapital.com +38 067 209 80 20 18/14. V.Khvoika str. CORP 2. Office 243 Ukraine Kiev 04080

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