OIL SANDS SUPPLY

MCW Energy Group has a five year Supply Agreement with Temple Mountain Energy Inc., of Utah, which provides MCW with 8,333 tons of oil sands material per month until the year 2016. The terms of this Agreement also includes a process-ready, stockpiled inventory of 100,000 tons of oil sands material which will be instrumental in the start-up of MCW’s 250 bpd pilot plant scheduled for operation at Asphalt Ridge in Q1 – 2013.

This Agreement, which includes the shovel-ready oil sands materials, is strategically important as it eliminates any lead time that would be required during the development of MCW’s own oil sands lease, which is also located in Asphalt Ridge, Utah. MCW’s management team feel that this timely arrangement with Temple Mountain will not only save valuable site preparation time, but will also provide an earlier-than-expected revenue flow for the Company.

Temple Mountain Energy has been producing several oil sands products on the site since 2006, with an average of 6% to 15% or more oil by weight, with the balance being sand. Temple Mountain estimates its proven reserves at Asphalt Ridge to be 150 million barrels of oil (prospective reserves) of which approximately 80 million barrels are surface-recoverable. The remaining 70 million barrels could be recovered through in-situ extraction methods. Its operation carries a near-zero carbon footprint.

All mined lands at the lease site undergo a thorough reclamation process to ensure that the cleaned sands materials are returned to their original sites in good environmental condition. Temple has produced asphalt, asphalt binders and crude oil since the commencement of the operation in 2006. Another valuable by-product is cleaned sand, which has a wide range of applications from glass-making to hydraulic fracturing for the conventional oil and gas industries.