Fermag Inc.

Fermag Inc.

March 22, 2005 11:14 ET

Fermag Inc.: A Technological Breakthrough in Pigment Production


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: FERMAG INC.

MARCH 22, 2005 - 11:14 ET

Fermag Inc.: A Technological Breakthrough in Pigment
Production

SOREL-TRACY, QUEBEC--(CCNMatthews - March 22, 2005) - The inauguration
of the Fermag plant in Sorel-Tracy is the outcome of an important
research and development project. This project allowed the development
of a patented hydrometallurgical process for the treatment of steel mill
dusts. Using this process, hazardous waste dust is converted into
environmentally friendly, high performance industrial pigments. These
pigments will be marketed under the registered trademark "Ferrinov ™".

The region of Sorel-Tracy, in the province of Quebec, is equipped with
excellent infrastructures for transport by truck, rail and ship. It is
possible to access several sources of supply and to deliver the finished
products to any destination with ease. The supply of raw materials for
the Ferrinov pigment plant is assured through agreements with North
American steel mills using electric arc furnaces. The produced pigments
are intended for the international markets of paint, plastics and
magnetic inks. Ferrinov pigments belong to a new generation of "mixed
metal oxides".

This technological breakthrough has required a total investment of $ 7,5
million. Twelve employees are currently working for the company and
eight more will be hired before the end of 2005. This last figure could
double in 2007.

Origin and Development of Ferrinov Pigments

Important research and development work has been ongoing since 1991. The
company has received continual support from institutional partners,
notably the Centre de recherche en environnement UQAM/Sorel-Tracy
(CREUST) and the Universite du Quebec a Montreal (UQAM). The support of
three Canadian steel mills, Mittal Canada Inc., Norambar and Dofasco,
has also been significant in the development of this patented
technological breakthrough.

In 1998, the commercial rights to the technology were owned by a newly
created company, Fermag. Between 2000 and 2003, the original
stockholders, Entraco, FAJM and Onyx were joined by institutional
investors: the Caisse de Depot et Placement du Quebec, Innovatech du
Grand Montreal/Lothian Partners and Fondaction CSN. Fermag also had the
support of financial partners: Technology Partnerships Canada, CLD du
Bas-Richelieu, Investment Quebec, Canada Economic Development and SADC
du Bas-Richelieu.

"The Government of Canada wishes to offer Canadians an economy which, by
achieving excellence, enables them to consider the future with
confidence and optimism," Minister Saada stated. "To build this
21st-century economy sought after by Canada's citizens, we have to dare
to innovate while building on our best regional assets. That is the
context in which we have provided our financial support for this
facility project, in which our local partner, Community Futures
Development Corporation SADC du Bas-Richelieu, is also participating.
Our intervention comes more specifically under the Bas-Richelieu
Regional Strategic Initiative (RSI), a measure implemented by Canada
Economic Development which aims in particular to support the region's
technological capability and foster diversification of its economic
base. Fermag's avant-garde facility, inaugurated today, is an eloquent
example of such timely intervention."

"The Quebec government engaged in an important new sustainable
development plan. We propose to Quebecers a new strategy to make this
plan a new everyday reality. The technology developed by the Fermag team
meets our objectives. It allows for a substantial reduction of
greenhouse gas emissions and industrial wastes. This technology favours
economical development while preserving the well being of the present
generation without compromising that of future generations" Minister
Reid stated.

Ferrinov Pigments

Complex Ferrinov iron oxides come essentially from chemical elements
volatilized during the melting of steel at around 1,600§C. Sub-micronic
dusts generated by the steel industry are decontaminated and separated
into different fractions by modifying the surface charge of the main
constituents of the dust. All the operations in the production of
Ferrinov pigments are carried out in an aqueous environment and require
low energy input.

Zinc ferrite and magnetite pigments produced with the Fermag technology
are very stable, highly anti-corrosion and heat-resistant. The unusual
levels of performance of those pigments stem from the originality of the
technology and the raw material, both of which are completely different
from those used by competitors. Pyrometallurgical processes developed at
the end of the 19th and the beginning of the 20th century were indeed
very energy consuming. The Fermag technology requires only 15 % of the
energy used by conventional processes. There is therefore no need for
massive use of fossil fuels and greenhouse gas emissions are
significantly reduced. For each ton of pigments produced, there is a
reduction of 4.7 tons of CO2 equivalent.

The use of industrial wastes like electric arc furnace dust for the
production of zinc ferrite and magnetite pigments constitutes a
precedent. Because of this new technology, important volumes of
industrial wastes will not be disposed of in hazardous waste landfill
sites. Around 600,000 tons of those wastes are buried every year in
North America. With the Fermag technology, pigments can be produced
without using natural mineral resources. Moreover, heavy metals
extracted from the treated dust, notably zinc and lead, are recovered to
be reintroduced in different commercial networks. The technology allows
for the reuse of 85 % of the initial mass of dust. The recovered
products can be used as industrial pigments and chemical compounds
commonly used by the industry. The residual wastes are constituted of
silica, carbon and mineral salts which can be disposed of without
environmental risk.

The production and use of Ferrinov pigments allows for the creation of
an environmental synergy between the steel industry and the paint
industry, which uses those high performance "green" pigments. Given the
enhanced environmental requirements, the introduction of new "green" and
high performance pigments on the market will be welcomed by the paint
industry. Ferrinov pigments will therefore be very helpful to those
companies wanting to reach new environmental objectives.

Ferrinov high performance pigments are stable and reproducible.
Extensive tests indicated that they are as good as the best
anti-corrosion and heat-resistant pigments available on the market. This
functional duality brings an increased flexibility for the marketing of
the finished products.

™ : Ferrinov is a registered trademark of Fermag inc.

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