1. An Innovative, Precise Water Treatment Process that Can Meet or Exceed Most Discharge Requirements An Innovative, Precise Water Treatment Process that Can Meet or Exceed Most Discharge Requirements BLUE SKY Means Clean Water Solves Difficult Active or Legacy Contamination Problems Produces Results Beyond Capabilities of Currently Accepted Technologies Treatment Costs are Similar to Conventional Lime Treatments with Sludge Volumes and Disposal Costs Greatly Reduced Solves Difficult Active or Legacy Contamination Problems Produces Results Beyond Capabilities of Currently Accepted Technologies Treatment Costs are Similar to Conventional Lime Treatments with Sludge Volumes and Disposal Costs Greatly Reduced

2. Ionic State Modification Alters the chemical and physical properties of metal contaminants within aqueous solutions 1.Pretreat influent when necessary 2.Ionic State Modification (ISM) Reactor designed based on the specific contaminants in the waste stream in order to change the ionic state of targeted metal ions 3.Reactor oxidizes or reduces specific ions with focused, strong electric and magnetic fields 4.As a result, ionic state of contaminants changes to allow precipitation with conventional chemistry 5.Collect post-treatment residue – may have some recycle value 6.Pure, clean water is produced that meets discharge standards Alters the chemical and physical properties of metal contaminants within aqueous solutions 1.Pretreat influent when necessary 2.Ionic State Modification (ISM) Reactor designed based on the specific contaminants in the waste stream in order to change the ionic state of targeted metal ions 3.Reactor oxidizes or reduces specific ions with focused, strong electric and magnetic fields 4.As a result, ionic state of contaminants changes to allow precipitation with conventional chemistry 5.Collect post-treatment residue – may have some recycle value 6.Pure, clean water is produced that meets discharge standards

3. BLUE SKY Mill Bull Tunnel Project, 2001-02 Over 51 million gallons treated, just under 2 years of operation Remote tunnel drilling site on USFS land in El Dorado County; El Dorado Irrigation District Project Met NPDES permit discharge levels Chemical Costs - >$.002 per gallon Sludge Removed – 360 55-gallon barrels; ½ cubic feet / 1000 gallons treated Electrical Costs - >$25,000 for entire project Water released into nature at site; No on-site ponding or containment required Effluent fluctuations of primary metals; Results: Over 51 million gallons treated, just under 2 years of operation Remote tunnel drilling site on USFS land in El Dorado County; El Dorado Irrigation District Project Met NPDES permit discharge levels Chemical Costs - >$.002 per gallon Sludge Removed – 360 55-gallon barrels; ½ cubic feet / 1000 gallons treated Electrical Costs - >$25,000 for entire project Water released into nature at site; No on-site ponding or containment required Effluent fluctuations of primary metals; Results: UNTREATEDAFTER BLUE SKY Feppb700 - 100,000300 Mnppb240 - 80050 Alppb6,100 - 91,00087

4. BLUE SKY Leviathan Mine Bench Tests, 1999 ANALYTE UNTREATED BLUE SKY DEMETALIIZED AFTER TWO-STAGE UNITS Aluminum (Al) 420,0002,500ND<100PPB Arsenic (As) 7,000 33ND<20PPB Copper (Cu) 3,500NDND<100 PPB Iron (Fe)830,000540ND<100 PPB Nickel (Ni)7,400 NDND<100 PPB Sulfate (S04) 5,900 44PPM In 1998, collected and treated four gallons of greatly concentrated AMD samples from #3 pond Filtering treated AMD produced.825 pounds of 80% moisture metal hydroxide cake Cake was reduced to.155 pounds or.05 pounds of dry sludge, less than 2 tons of sludge per million gallons 3.5 gallons of the 4.25 gallon sample were treated with the membrane device 2.65 gallons passed through as dischargeable water.85 gallons of sulfate concentrate bypassed by the unit as a side stream. Tests of side stream indicated sulfate concentration of 79,700 ppm; concentrate was treated and converted to 2.2 pounds of an agricultural sulfate product - 2.58 pounds of sulfate material per gallon of concentrate generated Blue Sky method would bypass / make obsolete elaborate ponding measures In 1998, collected and treated four gallons of greatly concentrated AMD samples from #3 pond Filtering treated AMD produced.825 pounds of 80% moisture metal hydroxide cake Cake was reduced to.155 pounds or.05 pounds of dry sludge, less than 2 tons of sludge per million gallons 3.5 gallons of the 4.25 gallon sample were treated with the membrane device 2.65 gallons passed through as dischargeable water.85 gallons of sulfate concentrate bypassed by the unit as a side stream. Tests of side stream indicated sulfate concentration of 79,700 ppm; concentrate was treated and converted to 2.2 pounds of an agricultural sulfate product - 2.58 pounds of sulfate material per gallon of concentrate generated Blue Sky method would bypass / make obsolete elaborate ponding measures

5. BLUE SKY Berkeley Pit – Bench Test, 1996 TEST SAMPLE AVGBLUE SKY RESULTS Alppm2940.03 Asppm2.60.02 Cdppm2.50.003 Cuppm1850.01 Pbppm>1.00.02 Nippm1.00.01 Znppm605.50.01 SO4ppm10800100 Conclusions of EPA / DOE / MSE sponsored report Dissolved / suspended metals & sulfates reduced by 99.98% Method able to remediate AMD with environmentally safe chemical reagents While not to EPA std., sulfate level reduced 1/3 compared to std. chemistry results Sulfates converted to insoluble anhydrous calcium and magnesium sulfates Metals and sulfates were removed in separate processes Conclusions of EPA / DOE / MSE sponsored report Dissolved / suspended metals & sulfates reduced by 99.98% Method able to remediate AMD with environmentally safe chemical reagents While not to EPA std., sulfate level reduced 1/3 compared to std. chemistry results Sulfates converted to insoluble anhydrous calcium and magnesium sulfates Metals and sulfates were removed in separate processes

6. BLUE SKY Mammoth Mine, CA – Bench / Site Testing, 1999 Approx. 100,000 gallons of AMD treated Produced approx. 150 gallons of de ‑ watered metal oxide sludge Initial lab analysis revealed sulfate levels of 1600 ug/l in the untreated AMD (removed with the metal cake) Sulfate level of the treated AMD - below 500 ppm Metal hydroxides and calcium sulfate were precipitated as a single sludge cake Approx. 100,000 gallons of AMD treated Produced approx. 150 gallons of de ‑ watered metal oxide sludge Initial lab analysis revealed sulfate levels of 1600 ug/l in the untreated AMD (removed with the metal cake) Sulfate level of the treated AMD - below 500 ppm Metal hydroxides and calcium sulfate were precipitated as a single sludge cake UNTREATED TREATED Aluminumug/l58000620 Cadmiumug/l110ND>1 Copperug/l510095 Leadug/l41ND>5 Manganeseug/l440020 Zincug/l26000240 Sulfateug/l1600460

7. BLUE SKY Iron Mountain – Bench Test, 1998 AMD unusually high in copper - most in the Cu+1 ionic state; Cu+1 was oxidized to Cu+2 prior to hydroxide precipitation Very high levels of three other toxic metals: arsenic, cadmium and nickel; had to raise the effluent pH above 9.5 for the formation of insoluble metal hydroxides Demetallized AMD put through a second treatment stage for the reduction of residual sulfates Two-stage treated water exceeded drinking water standards for heavy metals and significantly reduced sulfate levels AMD unusually high in copper - most in the Cu+1 ionic state; Cu+1 was oxidized to Cu+2 prior to hydroxide precipitation Very high levels of three other toxic metals: arsenic, cadmium and nickel; had to raise the effluent pH above 9.5 for the formation of insoluble metal hydroxides Demetallized AMD put through a second treatment stage for the reduction of residual sulfates Two-stage treated water exceeded drinking water standards for heavy metals and significantly reduced sulfate levels TEST CRITERIA TARGET LEVELSUNTREATED 1st TREATMENT2nd TREATMENT EPA 200.7Al> 50 ppb294,000ppbND EPA 200.8As> 2 ppb2,600ppb11ND EPA 200.9Cd> 10 ppb2,500ppbND EPA 200.7Cu> 50 ppb185,000ppbND EPA 200.7Pb> 500 ppb>1,000ppbND EPA 200.7Ni> 10 ppb1,000ppbND EPA 200.7Zn> 50 ppb550,000ppbND EPA 300.0SO4> 50 ppm29,500ppm27,00053 ppm

8. Recent Bench Tests Closed Northern CA Gold Mine November 2007 Preliminary Results Closed Northern CA Gold Mine November 2007 Preliminary Results AcceptableRaw SamplesBench Test Discharge LevelsUntreated ppb1st Treatment Arsenic0.01 BP110ND Cobalt 620ND Iron1.0 4 day avg USEPAND Manganese0.05 BP1300ND Nickel52 ug/L USEPA6000ND Zinc0.016 BP210ND Sulfates250 USEPA100001600

9. Benefits / Advantages Flexible flow rates - from 5 gpm to 1k gpm Small footprint for remote sites or large fixed facilities at accessible, high volume sites Drastically reduces metal sludge and other post-treatment residues – like calcium sulfate Saves money on additives, power and sludge handling costs Can operate 24/7, 365, all-weather with minimal staff Flexible flow rates - from 5 gpm to 1k gpm Small footprint for remote sites or large fixed facilities at accessible, high volume sites Drastically reduces metal sludge and other post-treatment residues – like calcium sulfate Saves money on additives, power and sludge handling costs Can operate 24/7, 365, all-weather with minimal staff

10. Uses Wherever there’s contaminated water Industrial –metal shops, light industry, recyclables Construction –bridges, hydroelectric, buildings, tunneling, reclamation Acid Mine Drainage –Copper, Zinc, Lead, Silver and other acid-metal mine effluents, etc. Specialties –emergencies, floods, remote/portable Difficult or Mixed Waste Streams –MTBE, selenium, arsenic, complex organic compounds Industrial –metal shops, light industry, recyclables Construction –bridges, hydroelectric, buildings, tunneling, reclamation Acid Mine Drainage –Copper, Zinc, Lead, Silver and other acid-metal mine effluents, etc. Specialties –emergencies, floods, remote/portable Difficult or Mixed Waste Streams –MTBE, selenium, arsenic, complex organic compounds

11. BLUE SKY Means Clean Water Proven Reliable Effective Safe Proven Reliable Effective Safe Contact - Bill Whiteside Blue Sky Water Technologies, Inc. 916-988-1182 bill@blueskytechnologies.biz blueskytechnologies.biz Contact - Bill Whiteside Blue Sky Water Technologies, Inc. 916-988-1182 bill@blueskytechnologies.biz blueskytechnologies.biz