No 6. November 2012

Bio Synthetic Gas Company Raises $0.5 Million

Bio synthetic gas developer BioSyngas Pty Ltd has raised $500,000 to progress its Bomen Project at Wagga Wagga in NSW.

The capital was raised under an Information Memorandum but the source of the capital was not disclosed. The capital injection secured a 40 per cent stake in the company. BioSyngas is a subsidiary of ASX listed Syngas Ltd (ASX: SYS), which is planning to spin out the company via an IPO.

Phase 1 of the Bomen Project is the development of a 3 MWe power plant powered by a combination of biogas and natural gas. The new funds will bring the project to construction ready stage including a detailed engineering study, the preparation and submission of development approvals, further power offtake agreement negotiations and progressing a stakeholder engagement program.

Scheduled over the next six months, the program of work is expected to provide the basis for a prospectus for BioSyngas to be spun out of Syngas to raise construction capital when the timing is suitable.

To be developed over three phases, the Bomen Project will eventually have total generation capacity of 6 MWe and utilize locally sourced biogas, natural gas and biomass.

Also under review is a project in the Northern Territory using plantation trimmings; a project in South Australia potentially fed by residual straw from cereal cropping on the Yorke Peninsula; and one in Victoria potentially using forestry waste.

BioSyngas' strategy is to develop many small scale 1.5 to 25 MW power generation plants leveraging the engineering and design work for the Bomen Project and selling power to specific customers and offtakers under long term agreements.

The company expects the capital raising to bring it closer to cashflow generation and result in investors having a clearer understanding of the value creation potential of the Bomen Project and its other projects.

The company says it has significant potential to grow a successful business in the current ‘highly favourable and expanding market" assisted by expectations that power prices will continue to rise, the need for low carbon options as part of the carbon price, a renewed focus on biomass which is widely available, and technological and operational improvements in converting biomass to energy.






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