Eco Investor Update
A Weekly News Update for Environmental Investors
December 2012 - No 109
Tox Free Solutions
The J&C Allen Superannuation Fund is no longer a substantial shareholder. (ASX: EAX)
The products are sold to the do-it-yourself home improvement market.
The acquisition of the Highgrove assets is a great fit for the business giving GAP an expanded presence in the broader screening and fencing market in Australia, and an expanded product offer to further grow the combined GAP and Highgrove businesses," said chief executive, Peter McDonald.
"The business has grown rapidly over the past three years and still has great growth potential in some of its key product areas.
Highgrove will generate annual sales revenues of around $11 million. The acquisition will be funded from existing banking facilities with $0.35 million of the purchase price as GAP shares. A significant portion of the price is delayed until August 2013 as the vendors have earn out performance targets for the rest of this financial year.
The acquisition will be earnings per share accretive in FY13, before any potential operational synergies, he said.
Brad Sinclair, part owner and director of Highgrove (Victoria), will oversee the management of the Highgrove product range and implement the growth plans for the business.
He will also spend more time on innovation and product development with the support of GAP. (ASX: GAP)
The most exciting development in the last 12 months has been growth of the companys clinical waste collection system. Clinismart is modeled on the companys Sharpsmart System, and has the potential to revolutionize the clinical waste market nationally as the Sharpsmart System did to the sharps market, he said.
This new system delivers higher standards in infection control, environmental effectiveness and logistical efficiency. Incorporating a foot pedal opening mechanism and a bagless system means hand contact with the clinical waste collector is no longer required. This results in a dramatic reduction in the infection transfer risk that currently exists with standard clinical waste collectors.
The new, Clinismart system
ensures that once full, each container is removed from the customers
premises, emptied, and then subjected to a rigorous 6 stage wash and sanitation
process, the same as that used in the Sharpsmart service.
The feedback we have had from customers who are using Clinismart has been extremely encouraging, supporting our view that this product has huge growth potential in the coming years, said Mr Daniels. (ASX: STP)
Energy World Corporation
Hunter Hall Investment Management has been selling down and is now longer a substantial shareholder. (ASX: CBD)
Chairman Parag Johannes Bhatt told shareholders that the pronounced market downturn for metal recyclers around the world mean that recycling companies, irrespective of their size and reach, must focus on reducing costs and maximizing efficiencies.
In recent weeks CMA has implemented restructuring measures to rightsize its operations and achieve the best results from its core business regions.
These measures have included staff reductions in some States to lower operating costs. Indeed, we are seeing signs at some key operations that measures to strengthen these businesses are leading to measurable improvements.
According to our recent strategy CMA will continue to have a significant presence across Australia and throughout the region. (ASX: CMV)
Energy Developments is conducting an on market buyback and can buy shares at up to $3.33. (ASX: ENE)
Novarise Renewable Resources
The company wants to grow market share, both organically and though acquisition, re focus on its heritage skills in off grid systems including diesel replacement, build on its expertise in pumping, power optimization, and build back confidence with its core customers in service and supply. (ASX: SOO)
Micro Cap Companies
Australian Renewable Fuels
The company is now producing over 3.5 million litres of biodiesel per month and sales are averaging $4 million per month. Revenue continues to rise and for the September quarter was $15 million, which compares with $24.3 million for the June half.
This year it wants to increase production, including having its SA plant on line.
The company can use waste vegetable oils and feedstocks from Asia including recycled mill oils and palm sludge oils. But chairman Philip Garling said Disappointingly we have not been able to progress with any meaningful shipments of recycled mill oils to date. We continue to explore all options for developing supply channels of recycled mill oils and other waste vegetable oils from throughout the Asia Pacific. We believe we have made good progress on this front and are hopeful of having supply of these materials during the 2013 calendar year. (ASX: ARW)
The initial contract is worth over $1.2 million per year and will be supplied from Sydney. It will be expanded nationally when the companys other plants have been upgraded over the next few months. This will take annual sales to 7,200 tonnes with a value of $3.6 million per annum.
Managing director Andrew Howard said the company said its need for feedstock has increased dramatically. To bridge this gap, we are entering into collection agreements with several companies in New South Wales. This will increase our collection capacity by 26 trucks without the need for capital expenditure. This added capacity will underpin our feedstock collection and drive this next wave of growth for the company.
We have also been negotiating similar arrangements in other states and will inform shareholders once those agreements have been finalized. The additional growth in revenue from these collection arrangements will add a minimum of $750,000 per annum from Sydney.
Mr Howard said the companys cost structure can cater to this growth so that this revenue will fall directly to the bottom line.
However, several motions at the companys annual general meetings were defeated. These were the re-election of Jerry Gordon as a director, the remuneration report, and the acquisition of plant and equipment in WA. (ASX: CBP)
In this role he drove revenue growth of 300 per cent, significant reductions in customer complaints and churn, and transformed the business from loss making to a very healthy profit. Prior to this, Tim served in management roles covering sales and marketing, operations, and technology in major Australian corporations including Origin Energy.
Intermoco is likely to seek an additional funding line to replace the La Jolla Cove facility, in which it is still in dispute, and provide balance sheet strength to capitalize on its growth strategy. (ASX: INT)
This is a significant milestone for Lynas, said executive chairman Nicholas Curtis. The operation of the LAMP is now a reality, and the LAMP will provide real data that will assure people that the LAMP is entirely safe for our local communities and the environment. We are excited to start creating value at the LAMP, and we look forward to sharing that value with all of our key stakeholders, including the communities in which we operate.
Lynas anticipates a ramp up period of three to four months until first commercial sales and then cash generation. (ASX: LYC)
In anticipation of the potential separation of Dart Energy International (DEI) from Dart Energy (DTE), Dart Energy has appointed Kirstin Ferguson as a non executive director.
Kirstin is an experienced non executive director and sits on a range of boards. She was appointed as the first female director of Queensland Rugby Union in 2011 and has received a number of awards for her work as a professional independent director including the Talbot Foundation Scholarship by the Australian Institute of Company Directors in 2012.
Kirstin is currently completing a PhD in Business with a focus on safety governance for ASX listed boards.
Nicholas Davies, Stephen Bizzell and Shaun Scott will revert to being non executive directors of Dart Energy.
Dart has issued 65 million shares as part of the consideration paid by its subsidiary Dart Energy International Pte Limited to acquire GP Energy Limited under their December 2011 agreement. (ASX: DTE)
One employee has passed away as a result of complications from the injuries. The other injured employees and contractors are stable and recovering in Suzhou and Shanghai hospitals.
The company said it is co operating with regulatory authorities and has launched its own investigation. (ASX: GXY)
The proceeds will fund the remaining equity funding obligations of about US$12 million for the construction of the companys flagship Olaroz lithium project in Argentina; and provide funds to the newly acquired Borax Argentina for short term initiatives and for drilling programs and other activities to develop the business.
Orocobres chief executive and managing director, Richard Seville, said The equity requirements at Olaroz are fully funded, allowing us to commit to full scale construction activities. In addition, we now have funds for our Borax Argentina initiatives and a healthy amount of working capital.
The company recently announced the commencement of construction at its Olaroz Lithium Project in northwest Argentina.
Orocobre expects the final project debt financing documentation to be executed by its partners over the coming weeks.
Mr Seville said Orocobre is on its way to establishing itself as a significant and low operating cost battery grade lithium carbonate supplier to the world.
Robert Hubbard has been appointed to Orocobres board and will chair the companys Audit Committee.
He replaces Neil Stuart who was the companys founder and has retired from the board.
Mr Hubbard will soon retire from PricewaterhouseCoopers after having served as a partner for over 20 years. During this time he was auditor for some of Australias largest resources companies, and acted as head of the advisory and assurance practices of PwC Brisbane.
Orocobre received an ASX query about the rapid fall of its share price from $1.74 to $1.37. The company said it is not aware of any information that may have caused it. (ASX: ORE)
Micro Cap Companies
The companys technical director is confident the Shoalhaven demonstration plant at Nowra will have a successful outcome. Chairman Roger Stroud said We are hoping that the first substantive production document by the independent expert will be presented by year end. (ASX: AEB)
The company has claimed an R&D Tax Incentive payment of $4.9 million and expects receipt in the first quarter of 2013. (ASX: ANQ)
The companys shares have lept in recent weeks on news of technical progress and reached a three year high of 37 cents on 23 November. (ASX: BLG)
Carnegie Wave Energy
It raised $3.525 million from institutional and sophisticated investors at 3 cents per share, the majority from existing shareholders.
Mike Fitzpatrick has joined the Carnegie board as a non executive director, and his company, 88 Green Ventures, is now Carnegies major shareholder. With the capital raising, 88 Green Ventures stake has risen from 6.1 to 9.7 per cent.
The latest grant funding of $2.26 million comes from a redistribution of the WA Governments Low Emissions Energy Development (LEED) program. Total Government funding, State and Federal, now totals $17.7 million.
Mr Fitzpatrick has over 30 years of experience in capital markets and infrastructure investment, and was the founder of Hastings Fund Management which he later sold to Westpac. He was also a driving force of renewable energy company Pacific Hydro.
Mr Fitzpatrick said Carnegie presents an exciting opportunity to be a major player in the delivery of sustainable clean power and water projects for decades to come around the globe. The scalability of the CETO Wave Energy Conversion system to utility projects presents an exciting opportunity for 88 Green Ventures. I am looking forward to a greater involvement in Carnegie as a director as it continues its path through commercialization to renewable utility scale generation.
The Perth Project is on track for completion of detailed design and securing of environmental and Government approvals by the end of 2012. It will deliver first power at the end of 2013, said Carnegie. (ASX: CWE)
Earth Heat Resources
The geothermal project will target customers with operations in the Cooper Basin and surrounding mineral development areas, he said.
In reviewing the market opportunities for our Habanero Project, it is quite clear we cannot rely on this project alone to sustain the Companys activities. We have therefore taken steps this year to broaden our portfolio interests by securing projects that can be progressed at low initial cost and that have potential to provide a shorter path to commercial markets, within existing technical capabilities.
Mr Spence said the new joint venture in the Gove Peninsula in the Northern Territory is a compelling opportunity to investigate a direct heat geothermal project with a nearby potential customer. The next phase is preliminary geothermal studies and initial exploration drilling.
Recently Geodynamics announced a joint venture opportunity with Kentor Energy to explore a conventional geothermal resource in the Solomon Islands, with the start of an exploration program expected towards the end of 2013.
We see these new opportunities in the Northern Territory and Solomon Islands as highly complementary. They give us a viable and immediate commercial path forward with some high impact but low cost projects. We now believe the Company has the appropriate mix of capability and cost to allow us to bring forward our Cooper Basin project while continuing to assess and develop new opportunities, he said.
Minesh Dave has retired from the board. He was a representative for Tata Power but its shareholding has fallen below 10 per cent. (ASX: GDY)
The shortfall shares were placed to clients of the underwriter, Cunningham Peterson Sharbanee Securities Pty Ltd. The $1.4 million entitlement issue at 5 cents per share was fully underwritten. (ASX: LTX)
Executive chairman Paul McPherson said MediVac is in discussions with several local and international players to sell the intellectual property of its SunnyWipes and Diakyne businesses.
MediVac does not have the manufacturing and distribution resources to compete with multinational competitors, and an independent study concluded that the SunnyWipes intellectual property would potentially have higher value in the hands of an international player with a manufacturing capability.
The newly acquired Republica Capital (RCL) business seeks to deliver a high yield investment return for investors/ shareholders by investing in growth companies using high return convertible note facilities, said Mr McPherson,
RCL seeks to make strategic investments in businesses with the aim of restructuring, recapitalizing and/ or amalgamating the investee companies. Republicas investment strategy involves assembling a diversified portfolio of micro cap growth investment from a range of geographic locations with an aim to obtain high rates of returns.
As this is not an environmentally positive activity, Eco Investor will monitor how MediVacs financial service activity and the commercialization of the MetaMizer medical waste technology affects our 50 per cent business activity guideline for environmentally positive businesses.
Meanwhile, RCL has loaned MediVac $2,258,000 and has pledged to raise new capital of up to $5 million to support the merged MediVac business.
The company intends to focus on its core MetaMizer business and the new Republica investments, in order to generate improved returns for shareholders, said Mr McPherson.
The proceeds from the capital raising approved at the AGM will payout the La Jolla debt. (ASX: MDV)
The Yellow Pallet project to produce banana fibre product for transport pallets is progressing slowly due to economic circumstances in Europe.
With low cash, We are seriously considering capital raising options for next year dependent upon progress in Egypt and with Yellow Pallet. I will be advising shareholders of our decision in this regard by end of first quarter 2013, said chairman, Ted Byrt. (ASX: PPY)
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