Eco Investor Update
A Weekly News Update for Environmental Investors
December 2012 - No 112
The next Eco Investor Update will be on Monday 21 January 2013. A Merry Christmas to all readers.
The DPS is being developed through the 50:50 jointly owned Diamantina Power Station Pty Ltd. The total capital expenditure including the back-up generation is expected to cost $570 million. APA's equity contribution should be about $100 million and will be funded from cash and committed facilities. The DPS is expected to become fully operational in the first half of 2014.
APA Group has changed the names of Hastings Diversified Utilities Fund to APA Sub Group. The trusts that comprise HDF have been renamed as follows: HDUF Finance Trust to APA Sub Trust No 1; HDUF Epic Trust to APA Sub Trust No 2; and HDUF Further Investments Trust to APA Sub Trust No 3. (ASX: APA)
Subsidiary, Dampier Bunbury Natural Gas Pipeline has a new four year $170 million bank debt facility that will be used to repay DBP's remaining maturing term debt in 2013 and other debt facilities. DBP has raised $625 million in 2012 and has no further term debt maturities until October 2014. (ASX: DUE)
Sims Metal Management
The change is due to "continued challenging market conditions" that relate "primarily to SimsMM's assessment of recent intake volumes and its anticipated shipping program, particularly for deep sea ferrous products, forecasted for December 2012".
"Whilst recent positive economic signals in the US, including declining unemployment, positive consumer confidence data and increasing industrial production, are encouraging, the direct benefit to intake volumes and metal recycling margins typically follows at a lag which will not benefit SimsMM through the 31 December 2012 period," it said.
SimsMM expects to release its first half results on 15 February. (ASX: SGM)
The company said day-to-day sales of the core distribution products of its subsidiary MPower continue to be impacted by economic conditions including an industry-wide downturn in the residential rooftop solar market.
"The company is gearing up its human resource base to ensure delivery of the two recently awarded Inpex Ichthys contracts worth up to approximately $20 million combined and has also incurred one-off integration costs associated with MPower. It is likely that a loss will be reported in the company's first post-integration half-year result, scheduled to be released in late February 2013.
"However, the current trading environment is being offset by a number of positive factors which indicate that the outlook for the second half of the 2013 financial year is more positive."
These include cost savings and sales increases in the pipeline, including reduced operational expenditure and a reduction in staff numbers in some less productive areas which offset recruitments where prospects are more buoyant.
The financial benefits from the two Inpex Ichthys projects will start to be seen from the second half of 2013. "When combined with other pending, large-scale contracts totaling approximately $10 million and initiatives under negotiation, it is likely that the project order book will hit record levels by the end of the third quarter," it said.
MPower has formed an exclusive alliance with Pramac, a European generator manufacturer, for MPower to market Pramac's range of power systems in Australia, New Zealand, PNG and the Pacific Islands, and this will help expand MPower's standby and portable generator activities.
The alliance will commence in January and is expected to add to profitability after an initial lead-in period. (ASX: TAG)
Unlisted Property Funds
Aspen Parks Property Fund
In September Aspen Parks released a new Offer Document for investors.
The recommendations increase regulatory predictability critical for the renewable energy industry in Australia, said Infigen.
The CCA said the scheme is delivering the worthwhile benefits intended, while its independent modeling confirms that the total cost of the RET scheme to electricity consumers is very modest at $12-$64 per annum, depending upon assumptions used. (ASX: IFN)
The same institution has also signed a binding Framework Agreement for a further 25 MW of solar projects in Europe. The institution will pre-commit on a project by project basis after each due diligence process. CBD expects to commence constructing the next 5 MW project under this arrangement in early 2013.
Separately, CBD has signed documents for a 4 MW extension to the 8 MW solar project it built in Thailand 18 months ago. The extension is due to commence in early 2013 and be completed within 2012-13, enabling it to contribute to full year earnings.
Managing director, Gerry McGowan, said the international progress underlines the value of CBD diversifying across renewable energy projects and geographical locations. "These projects also provide valuable reference sites that demonstrate the considerable delivery capability we have built over the past two years. Both these projects will positively contribute to this years results," he said. (ASX: CBD)
Unlisted Investment Companies
Micro Cap Companies
Australian Renewable Fuels
The company has also placed 200 million shares at 0.2 cents each to raise $400,000. The placement was to sophisticated investor Richard Tegoni, who has become a substantial shareholder and will hold direct and indirect equity interests of 12.49 per cent before allotment of the share purchase plan shares.
Mr Tegoni has also been appointed a nonexecutive director. He has a Masters of Business Administration, Diploma in Mortgage Broking, and a Diploma in Financial Markets. His background is in finance, banking and sales and marketing.
Cardia's shares are in a trading halt pending an announcement.
In other news, Cardia and partner University of Sydney have won Australian Research Council funding for research into a cost-effective biomimetic that has the potential to treat many bone diseases such as osteoporosis.
Cardia said the partnership will allow it to extend its environmentally-friendly PPC-starch blended resin into biomedical products and regenerative medicine such as tissue scaffolds and drug delivery agents.
Chairman, Pat Volpe, said "This opportunity provides a unique facility and platform to develop cutting edge research for the Australian industry. This research will allow us to design and develop a world-first clean technology for the synthesis and purification of a biohybrid and biodegradable polymer.
"The development of this breakthrough clean technology will transform Cardia's bioplastic starch blended products which are used in the plastics and packaging industry, into a multi-purpose and global "green friendly" product that can be used across many other applications and products.
"The research will create the potential to develop a world-first internationally accredited compostable PPC polymer."
The development aims to reduce the level of heavy metals, in particular zinc glutarate used in sustainable resin PPC polymers, to meet international compostability accreditation
"Importantly, this aims to manufacture purified polymer products with less petroleum and put CO2 to good use, rather than emitting it into the atmosphere or storing it underground. Converting carbon dioxide and carbon monoxide from pollution into valuable materials has the potential to transform the plastics and materials landscape on a global scale," he said.
The company has commenced discussions with petrochemical companies that are looking at ways to turn their CO2 emission into a business prospect. PPC resins use less virgin oil and have a lower carbon footprint, and Cardia now has the potential to develop PPC resins with low impurities. (ASX: CNN)
Clean Seas Tuna
The company said spawnings commenced in October but the volume and quantity of fertilized eggs compared to prior seasons has been disappointing and it does not expect to be able to transfer fingerlings to sea cages for experimental grow out early enough in the season to achieve its goal of juvenile winter survival.
Given its limited financial resources and need to preserve liquidity, the company anticipates suspending its Tuna Propagation Program for at least the 2013-14 summer, and to direct its resources to its Yellowtail Kingfish operations.
"Whilst the company continues to believe in the commercialization potential of the successful closure of the SBT lifecycle, investment beyond the company's current financial resources will be required for this goal to be achieved," said chief executive officer, Craig Foster.
"Directors believe it prudent to write down the significant investment in this project as at 31 December 2012 to an estimated net realizable value, in case the funding is not available in the future to re-activate this program. The net impact on 1H 2013 results is likely to be in the order of $30 million, a non-cash outgoing."
The company has been unable to secure a strategic partner willing to make a significant investment in Clean Seas given the present investment climate, the previous ongoing funding requirement of the SBT propagation program and the significant prior losses arising from excess mortalities in the Yellowtail Kingfish division.
The board and management are now directing their attention to the company's survival.
It is planning to either continue with a further scaled down Yellowtail Kingfish division in its own right, or in joint venture with a domestic partner. The contract with the company's external financial advisors concludes on 31 December and discussions will then be held with a shortlist of identified potential domestic aquaculture partners.
Some good news is that since the addition of Taurine to all Kingfish feed there has been a dramatic and sustained recovery in fish health.
The company has cash of $3.9 million, and is largely debt free.
"With the Kingfish growth season now commencing in earnest, cash limitations will necessitate either Kingfish volumes being further reduced or the company will need to be successful in securing a domestic Yellowtail Kingfish joint venture partner," said Mr Foster.
No rights issue is planned at present, but the board is considering other capital and debt raising options including the possibility of a share purchase plan early in the new year, he said. (ASX: CSS)
Po Valley Energy
The Malaysian Court of Appeal dismissed the appeal with costs in favour of Lynas pending a judicial review hearing in 2013.
The judicial review application is scheduled to be heard by the Kuantan High Court on 5 February 2013. The Malaysian government and Lynas intend to strongly defend the process undertaken by the minister of Science, Technology and Innovation in dismissing the appeal under the Atomic Energy Licensing Act.
There is no injunction or stay preventing Lynas from carrying out its operations at its Malaysian plant.
Lynas raised $25 million under its share purchase plan at 56 cents per share.
Lynas director Kathleen Conlon has indirectly acquired 111,361 shares at 56 and 59 cents each. (ASX: LYC)
Dart has a conditional Gas Sales Agreement (GSA) with MFV to supply gas from PEL 458 at Fullerton Cove. The 16.4 hectare glasshouse will employ over 125 people during construction and from early 2014 is expected to initially produce up to 8,000 tonnes of quality organic tomatoes and 1,500 tonnes of capsicums each year for sale to local markets.
MFV has acquired a 93.6 hectare property where the glasshouse will be located, and has provided notice to Dalsem Horticulture Projects to commence construction immediately.
MFV's gas fired boilers will produce enough heat to maintain optimal temperatures in the glasshouse and CO2 produced from the heating will be captured to feed the crops and significantly enhance production yields. Water produced from the coal seams during the initial phases of gas extraction will be treated and used to irrigate the crop. It is expected that the sequestering of carbon and the use of treated water will ensure the project has near zero emissions of CO2 and is virtually self-sufficient in water.
If the pilot project is successful and a production licence is granted, Dart will supply MFV with an initial 1 PJ of gas over 10 years which will be priced at $7.50/GJ and indexed to CPI. The GSA allows for an increase in supply of CSG up to 6 PJ if the MFV project is expanded to include an 8 MW combined heat and power plant.
Dart Energy Australia's chief executive, Robbert de Weijer said gaining the DA for MFV is a significant milestone towards the development of the project, which will be a great example of innovative commercialization, job creation, sustainability and co-existence between the gas and agricultural industries. (ASX: DTE)
Micro Cap Companies
The Agreement will include the terms and conditions set out in the MOU announced to the ASX on 10 December, and the rights and obligations of both parties.
EnviroMission is to receive a US$2 million development fee; the first tranche of US$200,000 to be received by 31 December and the balance in instalments by 30 June 2013.
EnviroMission will own 20 per cent of the Texas Solar Tower' development company in the first instance. This holding will not be diluted to less than 10 per cent and will then be free carried and non-diluting, said executive chairman, Roger Davey.
EnviroMission will also receive an annual technology fee for each Solar Tower development delivered by the development company, although the fee is confidential.
"This is a landmark agreement that meets EnviroMission's objective for Solar Tower development in multiple US markets via joint venture and development license agreements and will provide vital operational revenue for EnviroMission's Arizona (La Paz) Solar Tower development through non-equity development capital," said Mr Davey. (ASX: EVM)
Liquefied Natural Gas
Magnolia LNG has executed an exclusive site access agreement with the Port of Lake Charles Harbour & Terminal District in Louisiana where it is proposed to develop a 4 mpta LNG production and export facility.
The site has direct access to underutilized gas pipelines which directly access the US gas market; and Magnolia LNG has commenced discussions with several potential partners on a draft Tolling Agreement. The company expects DOE/FE approval in February or March 2013. (ASX: LNG)
Search Eco Investor