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Annual Report for the year 2018

The following activities were conducted in 2018 (license ЮСХ-14172-ТР):

1. A program for pilot testing of units for rhenium concentrate extraction from volcanic gases was developed, engineering materials and professional equipment, construction materials, fittings, fodder, fuel were purchased, naval and air means of delivery were leased, etc.

2. Working crew and the above listed goods were delivered to Iturup at Medvezhya Bay by sea in June 2018 and later transported to "Crater" and “Warm Lake” sites by MI-8 ".

3. From June until October 2018 five industrial units for the concentrate extraction were assembled on promising sites in the crater of “Kudriavy” volcano, the total operation cycle of the units is more than 100 working days. Over 68kg of enriched concentrate were extracted, also over 600kg of ceramic absorbing agent enriched by the concentrate were obtained. Obtained concentrate and absorbing agent were delivered to Yuzhno-Sakhalinsk and partly to Moscow for analysis and conduction of a number of works for their “fracturing”.

4. During pilot tests weather and climate indices, fumarole gas flow and temperature were measured.

5. The extracted concentrate and measurement data will determine (after testing) most promising points for collection of the fumarole gas. At the moment at least 30 such points have been identified, allowing to extract rhenium concentrate using the proposed technologies on a pilot (and going forward on an industrial) scale.

6. Today samples of the collected concentrate have been forwarded (under the existing agreement) for analysis to the Institute of Mineralogy, Geochemistry and Crystal Chemistry of Rare Elements for cross-analysis (tests). It is also planned to forward the samples to other certified laboratories (Stuart Geochemical, etc.). Test results are expected in the fourth quarter of 2018.

7. In 2018 a light cableway was built and used between the crater of the volcano “Kudriavy” and its foot. Preliminary survey of alternative ways of cargo and crew delivery with perspective to increase the traffic capacity (delivery of larger volume of technological and construction materials, etc.) was conducted.

Drilling and mining works were neither planned nor carried out in 2018. The method of extraction of Re concentrate and other rare metals from gas phase was tested. Alongside research works to define perspective points for installation of industrial units were carried out. Works to process the concentrates obtained are being scheduled - development of technology for selective extraction of rare components from the extracted concentrates.