SOURCE: Abakan Inc

June 04, 2015 13:57 ET

Abakan Launches Operations in Alberta

MIAMI, FL--(Marketwired - Jun 4, 2015) - Abakan Inc. (OTCQB: ABKI) ("Abakan"), an emerging leader in the advanced coatings and metal formulations markets, today announced that it has begun operations at its joint-development facility in Edmonton, Alberta. Abakan's subsidiary, MesoCoat Inc., along with the lead project partner, Northern Alberta Institute of Technology (NAIT) will embark on an 18-month collaborative effort to establish a prototype demonstration facility for developing, testing and commercializing wear-resistant clad pipe and components. Western Economic Diversification Canada is also supporting this initiative through a $1.5 million investment toward NAIT. Improvements in wear resistance are expected to make a significant impact in reducing maintenance and downtime costs while increasing productivity in oil sands and other mining applications.

Abakan shipped its CermaClad high-speed large-area cladding system for installation at the Northern Alberta Institute of Technology's (NAIT) campus in Edmonton, Alberta in early 2015. Despite delays associated with the installation of some interrelated equipment and machinery, the CermaClad system and other ancillary equipment are now installed at the Edmonton facility. The Edmonton facility is intended to serve as a pilot-scale wear-resistant clad pipe manufacturing facility for the development and qualification of wear-resistant clad pipes, and as a stepping stone for setting-up a full-scale wear-resistant clad pipe manufacturing facility in Alberta. The new facility will also serve as a platform for Abakan's introduction to the Alberta oil sands market, which, with proven reserves estimated at more than 169 billion barrels, is one of the largest oil resources in the world and a major source of oil for Canada, the United States and Asia. Since Alberta oil sands production is expected to increase significantly over the next decade, producers want to extend the life of the carbon steel pipes used for the hydro-transportation of tailings with harder, tougher coatings that protect pipes from the abrasiveness of tar-like bituminous oil sands.

"Our aim is to fast-track market entry of our wear-resistant clad pipe products for the transportation of oil sands and mining slurries. We have received commitments from oil sands producers in Canada and mining companies in Mexico and Brazil to field-test CermaClad wear-resistant clad pipe products as soon as our system is ready for testing. Apart from our work with conventional less expensive chrome carbide and the more expensive tungsten carbide wear-resistant cladding on pipes, Abakan also expects to introduce new iron-based structurally amorphous metal (SAM) alloy cladding that in testing has exhibited better performance than tungsten carbide cladding, but at a fraction of the cost." Robert Miller stated further that "although more expensive than the more widely used chrome carbide cladding, our new alloy cladding is expected to be a significantly better value proposition when you consider an estimated life of three times that of chrome carbide cladding and those cost efficiencies that correspond to less downtime revenue losses, and lower maintenance and replacement costs."

The costs associated with downtime and maintenance in the Alberta oil sands industry estimated at more than $10 billion a year are expected to grow as production expands, according to the Materials and Reliability in Oil Sands (MARIOS) consortium in Alberta. The development of Alberta's oil sands has been held up by the lack of materials for transport lines and components that are resistant to the highly abrasive slurry. Due to high abrasion, the pipelines have to be rotated every three to four months and replaced every 12 to 15 months. The costs involved just in rotating and replacing the pipes is approximately $2 billion annually. The same is true of large components, for example the steel teeth on the giant electric shovels used to recover oil sands, must be replaced approximately every two days.

Abakan's combination of high productivity coating processes and groundbreaking materials are expected to facilitate significant efficiencies associated with the extraction of these oil resources. Our proprietary materials combined with CermaClad large-area based fusion cladding technology, have demonstrated in laboratory tests a three to eight times improvement in wear and corrosion resistance when compared with traditional weld overlays at costs comparable to rubber and metal matrix composite alternatives. Abakan intends to complete development and initiate field-testing by end of year 2016 and begin the construction of a full-scale wear-resistant clad pipe manufacturing facility in Alberta in early-2017.

About Abakan, Inc.
Abakan develops, manufactures and markets advanced nano-composite materialsinnovative fabricated metal products and highly engineered metal composites for applications in the oil and gas, petrochemical, mining, aerospace and defense, energy, infrastructure and processing industries. Abakan's technology portfolio currently includes high-speed, large-area metal cladding technology, and long-life nano-composite anti-corrosion and wear coating materials. Abakan's products have demonstrated longer life, higher productivity and extremely high strength-to-weight ratios compared to competing technologies. The Abakan group of companies has been honored by The Wall Street Journal as the #1 Manufacturing Innovation across the globe; by Pipeline Industries Guild as the Top Subsea Pipeline Technology; by Forbes as the #1 Most Promising Material Science Company in the United States; by American Metals Market with the Steel Excellence Award; by Inc. 500 as one of the Fastest Growing Manufacturing Company in the U.S.; and has received numerous other trade, industry and technology awards including five R&D 100 Awards and a Technology Innovation Award from the National Institute of Standards and Technology. Over $50 million has been invested in product development and testing by federal agencies, national labs and our companies in order to deliver products that offer improved performance over the current state of art. Abakan has introduced its PComP™ W for metal asset protection and life extension to the oil and gas and mining industries, and is currently focused on the scale-up and commercialization of its highly disruptive metal cladding products for the oil and gas, oil sands, and mining industries. Abakan currently operates from multiple locations in United States, and in Canada.

Forward-Looking Statements
A number of statements contained in this press release are forward-looking statements. These forward looking statements involve a number of risks and uncertainties including technological obsolescence, market acceptance of future products, competitive market conditions, and the sufficiency of capital resources. The actual results Abakan may achieve could differ materially from any forward-looking statements due to such risks and uncertainties. Abakan encourages the public to read the information provided here in conjunction with its most recent filings on Form 10-K, Form 10-Q and 8-K. Abakan's public filings may be viewed at www.sec.gov.

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