Cardinal Resources -- Making a Global Impact Since 2004

PITTSBURGH PA--(Marketwired - November 17, 2014) - Cardinal Resources Inc. (CDNL), a global provider of patented sustainable, solar powered solutions for drinking water, waste water and environmental remediation announces the release of our roadmap, Cardinal Resources -- Making a Global Impact Since 2004 This overview focuses on the Company's path forward into new geographies and markets in the coming years.

Cardinal Resources is releasing an abridged version of our long-term vision for 2015 and beyond in multiple territories and markets. It is a high level view at how market strategies align with overall business strategy.

To look at the path ahead, we first must look at where we've been. In business since 2004, Cardinal Resources generated significant revenue while working in over 32 countries, developed and patented our core media technology, and our specialty media filters, while winning awards for technology and exports. Our key products and services include the family of Red Bird Systems, sustainable solar powered waste water treatment, environmental engineering and remediation services. The company had a significant drop off in annual revenue while developing our new systems and new markets but we continued to move forward. These efforts and perseverance through hard times are now bearing fruit.

Starting in the second quarter of 2013 we began to sign a series of contracts, totaling approximately $39.4 million, specific to our patented Red Bird System and our proprietary solar powered wastewater treatment systems. These contracts, in Bayelsa State, Nigeria, Cameroon, and Senegal, all backed by Sovereign Guarantees give us a strong base for future expansion in Africa. In 2014, we slowly began implementation on these contracts with a speed up in implementation in the second half of the year.

As with any business tackling global problems, particularly in emerging markets we have challenges ahead and amazing opportunities. Developing and capturing these opportunities will take focus, dedication, flexibility and resources. The remainder of this overview looks at our next geographies and markets.

Next Geographies

India, Pakistan, Sri Lanka, and Bangladesh

Existing

We are currently in the final negotiations on an agreement with a well-established company in India to open the market to Cardinal Resources. With the agreement, a CRB-10 unit and a CRB-20 unit will be immediately ordered. In addition to our systems, this agreement will also cover the expansion of our environmental clean up, engineering services and water sales in India. The pending partnership provides local personnel and contacts with customers, potential manufacturers and those offering financing. It is expected that first sales will be realized in late 2014 with a slow ramp up in sales through 2015.

Potential

This territory has a population of over 1.6 billion people, with India being 75% of the total population, or 22.5% of the world's total population. The rural population of India comprises more than 700 million people residing in about 1.4 million communities that dot 15 diverse ecological regions. Providing drinking water to such a large population separated by long distances and having varying levels of education and socio-economic development is an enormous challenge.

The health problems due to poor water quality are staggering and economic burdens are immense. Over 37 million Indians are affected by waterborne diseases each year and 1.5 million children die from intestinal distress. Economically, waterborne diseases result in more than 73 million lost man-days each year. In addition, chemical contamination from fluoride, and arsenic are common in India which our specialty filters can address.

India has placed a priority on clean drinking water. The government has undertaken various programs since independence to provide safe drinking water to the large rural population. In addition, 85% of the population depends upon groundwater as their source of water.

Panama, Colombia, Venezuela, and Nicaragua

Existing

Agua Saludable S.A. purchased a CRB-10 unit as part of a 12 month, 10-unit commitment.

Potential

Compared to other Latin American countries, Panama has a relatively high level of access to water and sanitation. However, significant challenges remain in rural areas. There are areas in the country where there is no potable water service at all. The World Health Organization (WHO) and the United Nations Children's Fund's (UNICEF) Joint Monitoring Program (JMP) estimates access to improved water supply in 2004 at 97% in urban areas and 82% in rural areas, while access to improved sanitation was 75% in urban areas and 50% in rural areas.

Water supply and sanitation in Colombia has improved over the past decades. Between 1990 and 2010, access to improved sanitation increased from 67% to 82%.³ In 2010, 92% of the population had access to an improved source of water and 77% had access to adequate sanitation. The rural population, which accounts for about 25% of the national total, has the lowest coverage rates, with only 72% having access to safe water and 63% to adequate sanitation. Coverage is lowest on the Atlantic Coast (Caribbean Region), in the Orinoquia and in Amazonia.⁴

Water supply and sanitation in Venezuela was extended to an increasing number of people during the 2000s, although many remain without access to piped water. Service quality for those with access is mixed, with water often being supplied only on an intermittent basis and most wastewater not being treated.

Drinking water and sanitation in Nicaragua are provided by a national public utility in urban areas and water committees in rural areas. Despite relatively high levels of investment, access to drinking water in urban areas has barely kept up with population growth, access to urban sanitation has actually declined and service quality remains poor. However, a substantial increase in access to water supply and sanitation has been reached in rural areas.

Access to water supply and sanitation in urban areas of Nicaragua has been declining, since there has been little expansion in access while population levels have increased. The Nicaraguan Water and Sewerage Enterprise (ENACAL), the public utility responsible for provision of water and sanitation services to urban areas, estimates that effective coverage is less than 60% due to insufficient and unreliable service.

Our opportunity to enter this market is enhanced by the relationship with Agua Saludable which has committed to purchasing 10 Red Bird Systems over the next 12 months. A significant need exists and the partnership will benefit both parties as they provide local personnel and contacts with both customers and those offering financing.

Near Term Latin America, excluding Panama, Colombia, Venezuela and Nicaragua

Existing

Currently, Cardinal Resources is not engaged in water projects in these regions. We have completed work in Mexico in the past. Relationships with local entities that may result in partnerships are being investigated. It is expected that a partner will be identified and agreement signed in 2015. First sales are projected for mid-2015 to early 2016.

Potential

Water supply and sanitation in Latin America is characterized by insufficient access and in many cases by poor service quality which results in negative impacts on public health. The services providers, policies and regulation are fragmented. Financing water and sanitation projects is a challenge that requires U.S. Export Import Bank and Development Bank support.

Insufficient access to water and sanitation is especially a problem for the poor and those in rural areas. 50 million people (9% of the population of Latin America and the Caribbean) did not have access to an improved water supply and 125 million (23%) did not have access to adequate sanitation.⁹

The World Bank has estimated that the investments needed to increase access to achieve the Millennium Development Goals (MDGs) in water and sanitation in Latin America by itself is 0.12% of GDP, not taking into account maintenance and rehabilitation.¹⁰

Water supply and sanitation in Mexico is characterized by achievements and challenges. Among the achievements is a significant increase in access to piped water supply in urban areas (88% to 93%) as well as in rural areas (50% to 74%) between 1990 and 2010. Additionally, a strong nationwide increase in access to improved sanitation (64% to 85%) was observed in the same period.¹¹ Other achievements include the existence of a functioning national system to finance water and sanitation infrastructure with a National Water Commission (CONAGUA) as its apex institution and the existence of a few well-performing utilities such as Aguas y Drenaje de Monterey.

The challenges include inadequate water service quality; poor technical and commercial efficiency of most utilities; an insufficient share of wastewater receiving treatment, and inadequate access in rural areas. In addition to on-going investments to expand access, the government has embarked on a large investment program to improve wastewater treatment.

Guatemala is the most populous country in Central America and most of the population is rural. The drinking water supply and sanitation sector in Guatemala is characterized by low and inconsistent service coverage, especially in rural areas; unclear allocation of management responsibilities; and little or no regulation and monitoring. Seventy percent of the people live outside of urban areas and have no access to clean drinking water. Access to improved water sources and sanitation has increased. However, the government of Guatemala estimates that the population without access to water services is growing at a rate of at least 100,000 people per year.¹⁵

Access in urban areas is unpredictable, as only 80% of urban water systems function for an average of 12 hours or more per day. As of 2000, 25% of the water in urban systems was disinfected and only 1% of all collected sewage water has been treated.

New Markets

Flow back and Produced Water

Existing

Currently, Cardinal Resources is not engaged in produced water projects. We have unique, proprietary capabilities in the market based on new technology development, our track record in the treatment of difficult waste streams and our partnerships.

Potential

Nationwide 20 to 30 billion barrels of produced water are generated by oil and gas production operations each year. This is 70 times the volume of all liquid hazardous wastes generated in the U.S. While recycling is increasing, there are still significant quantities being deep well injected. Each well installed continues to produce waste water throughout its production life. This long-term, relatively low daily volume waste stream represents a significant ($285 billion) mid to long-term market opportunity.

The number of wells continues to grow. For example, there are approximately 6,700 Marcellus wells in Pennsylvania and drilling is expected to continue for 10 to 20 years.¹⁶
The Utica shale is experiencing exponential growth in production rates as well.

The North Dakota Bakken field has over 5,000 wells with an additional 2,000 wells per year expected for the next 10-15 years. Texas Eagle Ford and the Permian Basin in Texas are expected to continue to grow at a similar rate.

Solar powered water treatment, the system size and containerized approach are benefits as the volume of water to be treated fluctuates with time and geology. An in-depth study of the international market is warranted to quantify the opportunities and to determine the barriers to entry.

Stormwater and Green Infrastructure

Existing

Cardinal Resources has completed large U.S. and international (Brazil and China) green infrastructure projects for U.S. multinational corporations. These projects have focused on reducing site runoff, sewer loading, pollution reduction, and storm water harvesting.

Potential

Cardinal Resources has a local focus to expand in the area of stormwater engineering. The major water and wastewater entities in the Pittsburgh area, Pittsburgh Water and Sewer Authority (PWSA) and Allegheny County Sanitary Authority (ALCOSAN), have undertaken huge initiatives to solve the Combined Sewer Overflow (CSO) issues in the area. This will result in myriad projects over the next 20 years with an estimated value of $3.6 billion.

Much of these funds will be construction and materials. However, a significant portion, approximately 10%, will be engineering fees. With hundreds of millions of dollars to be spent on engineering fees in this area over the next two and a half decades, this presents a huge opportunity for Cardinal Resources to grow and be a part of the effort to improve the city and its waterways.

Footnotes:

¹ Planning Commission (India): DRAFT REPORT OF THE STEERING COMMITTEE ON URBAN DEVELOPMENT FOR ELEVENTH FIVE YEAR PLAN (2007-2012), 2007. Retrieved on April 2010.
² Planning Commission of India: India Assessment 2002, Water Supply and Sanitation, a WHO-UNICEF sponsored study, 2003, p. 51-53
³ World Health Organization; UNICEF, "Joint Monitoring Program"
⁴ World Health Organization; UNICEF (2010), "Joint Monitoring Program for Water Supply and Sanitation. Coverage Estimates Improved Drinking Water."
⁵ Estado venezolano ha invertido $600 millones para mejorar servicio de aqua potable; Agencia Venezolana de Noticias, 22/03/2011 -- http://www.avn.info.ve/node/49470
⁶ Venezuela cumplió con Metas del Milenio en saneamiento y aqua potable, Agencia Bolivariana de Noticias, 19/03/08
⁷ World Health Organization; UNICEF, "Joint Monitoring Program (JMP/2008) and JMP country files for Venezuela; Data is based on extrapolation of the trend between 1991 and 2001 Censuses"
⁸ Joint Monitoring Program for Water Supply and Sanitation
⁹ WHO/UNICEF JMP -- http://www.wssinfo.org/
¹⁰ Investing in Infrastructure - What is Needed from 2000 to 2010? Policy Research Working Paper # 3102 -- by Marianne Fay and Tito Yepes -- July 2003, Annex II, p. 18
¹¹ Data on water coverage from the UNICEF/WHO Joint Monitoring Program (JMP) 2010
¹² Comisión Nacional de Agua (CONAGUA); Comisión Nacional del Agua, Situación del Subsector Agua Potable, Alcantarillado y Saneamiento, 2012, p.3
¹² Investment in water supply and sanitation in Latin America
¹³ Comisión Nacional de Agua (CONAGUA): Estadísticas del agua en México, 2007, p. 120
¹⁴ World Bank Mexico Infrastructure Public Expenditure Review 2005, p. 61
¹⁵ Inter-American Development Bank 2003. Guatemala Rural Water and Sanitation Program (GU-0150) Loan Proposal
¹⁶ http://www.eia.gov/petroleum/drilling/pdf/marcellus.pdf
¹⁷ http://www.eia.gov/todayinenergy/detail.cfm?id=17511
¹⁸ http://www.pgh2o.com/going-green
¹⁹ http://apps.pittsburghpa.gov/pwsa/PWSA-Greening_the_Pittsburgh_Wet_Weather_Plan.pdf
²⁰ http://apps.pittsburghpa.gov/pwsa/PWSA_WWFS_Section_9.pdf
²¹ http://apps.pittsburghpa.gov/pwsa/PWSA_WWFS_Executive_Summary.pdf
²² http://www.alcosan.org/WetWeatherIssues/ALCOSANDraftWetWeatherPlan/tabid/175/Default.aspx
²³ http://www.alcosan.org/Portals/0/Wet%20Weather%20Plan/Booklet_FINAL_7-19-12_singlepage.pdf

Forward-Looking Statements

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995:
Certain statements in this presentation constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs but they involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, such as business and political conditions in the geographic areas in which we sell our products, weather and natural disasters, changing interpretations of generally accepted accounting principles; outcomes of government reviews; inquiries and investigations and related litigation; continued compliance with government regulations; legislation or regulatory environments, requirements or changes adversely affecting the businesses in which we are engaged.

The information set forth herein should be read in light of such risks. You are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements made herein speak only as of the date of this presentation and the Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company¹s expectations."