Eco Investor Update
A Weekly News Update for Environmental Investors
January 2011 - No 17
Eastern Star Gas
David Casey, managing director of Eastern Star Gas, said "Completion of the land purchase reflects the company's confidence in the LNG Newcastle Project with a number of important milestones now realised.
"The investigation into the feasibility of developing an electric motor driven, mid-scale LNG Project on the Kooragang site, funded by our partners Hitachi Limited and Toyo Engineering Corporation, was completed at the end of last year with favourable outcomes. Forecast project costs are well and truly competitive with industry best practice, while the size and operational flexibility of the project are ideally suited for supply from an upstream coal seam gas project."
A Preliminary Environmental Assessment for the project should be submitted to the Department of Planning imminently, and the company expects to announce the commencement of front end engineering and design work within weeks.
The LNG Newcastle Project (LNGN) is a key step in Eastern Star Gas commercializing its significant reserves at the Narrabri Coal Seam Gas Project. Pairs of 0.5 million tonne per annum liquefaction units will be installed in 1 million tonne per annum (MMtpa) trains. The use of electric motor driven, mid-scale, single mixed refrigerant technology offers low capital cost, quick construction, reliability, efficiency, low environmental impact, operational flexibility, small footprint and low noise, it said. (ASX: ESG)
Infigen said this is the second of the consortium's proposed solar farms to receive planning approval. The NSW Government granted planning approval to the proposed Nyngan Solar Farm on 10 January.
The consortium is one of four short-listed solar photovoltaic proposals being assessed for Commonwealth Government funding under the Solar Flagships Program.
The development of the consortium's Capital Solar Farm and other proposed solar farms in NSW are conditional on milestones including being successful under Round 1 of the Solar Flagships Program and the receipt of necessary Commonwealth Government and NSW Government funding for the projects. (ASX: IFN)
The latest announcement follows a deal with its banker ANZ to defer a $5.8 million in amortization payments to 31 March. Some covenant breaches have also been waived. However, the deferred arrangement and extension fee of $1.9 million has been increased to $2.5 million.
CMA said the deal will allow it to better direct cashflow to normal business operations and to focus on its restructuring. (ASX: CMV)
Novarise Renewable Resources
P&O Trans Australia's managing director Paul Digney said "The Troncs transport business provides P&O Trans Australia a great opportunity to expand operations into South East and Far North Queensland with an established platform and an exceptional customer base."
Troncs was established in 1979 and in the last four years has expanded with substantial operations in South East Queensland, Far North Queensland and Victoria.
Consideration reflects an earnings (EBITDA) multiple of around 5 times based on 2010 unaudited earnings, and was funded by POTA from its debt facilities and available cash. Qube also said the acquisition is not expected to have a material impact on itself. (ASX: QUB)
Micro Cap Companies
Carnegie Wave Energy
Other testing procedures are in process. Carnegie has taken delivery of the onshore pump and hydraulic system test rig, which is located at Carnegie's Fremantle facility. The rig "cradles the commercial scale CETO pump horizontally where it is stroked by a hydraulic actuator powered by a 400 kW hydraulic power unit. The pump has been fitted into the rig and the rig will now undergo commissioning, followed by testing and the delivery of the hydraulic energy management module", which is due shortly.
Carnegie said the test program involves stroking the pump under various loads and velocities using sinusoidal profiles that simulate wave conditions. Instrumentation on the pump and hydraulic module will record system performance during onshore and offshore testing.
The offshore instrumentation system that controls the CETO 3 unit and relays data to shore is complete with Carnegie receiving the communications buoy and associated mooring system. The buoy houses the transmitters that send the collected data back to shore via 3G infrastructure. Testing of this equipment is underway onshore with offshore deployment of the buoy expected in coming weeks. (ASX: CWE)
The Sunday Herald Sun newspaper has rated EcoQuest's Little Takas biodegradable disposable nappy as one of the best new baby products for 2010. The rating in one of the Top Eight "sanity-saving" products picked by the newspaper's Parenting Editor Jen Kelly.
"Eco-conscious mums are loving these new nappies, billed as the world's most biodegradable," said is reported to have written. "They're made from renewable sources, including corn starch, and are 90 per cent biodegradable yet soft on the skin." (ASX: ECQ)
The nanotubes will be produced in its Denver, Colorado laboratory. Eden said that this year it will proceed with the scaling up of its initial batch plant installed in Denver last year after the company acquired full rights to the nano-technology from its former project partner, the University of Queensland.
"The decision to scale-up the plant by year's end follows the successful trial batching over Christmas which saw our plant run in a continuous production cycle for the first time," said Eden Energy's executive chairman, Greg Solomon.
"Our trial plant, which we used more to perfect the production and quality control process rather than focus on output, can probably produce up to about three tonnes of nanotubes a year. The scale-up, however, will take that capacity more to between 25-100 tonnes per annum and that makes Eden's nanotubes supply competitive on the world-stage."
Mr Solomon said the largest manufacturer in the world currently is a Chinese company, Cnano, which is reported to produce around 500 tonnes per year. Europe's Bayer Corporation is the second largest global producer at 200 tpa but there are other similar sized producers in Germany and France. The largest number of manufacturers, around 27, is in the US, although these produce small volumes. However, Ohio-based Pyrograf is planning a 1,000 tpa nanotube plant.
Mr Solomon said it is Eden Energy's belief that global demand is growing rapidly and prices are coming down as production achieves better economies of scale and product application rates increase.
"This adds to their appeal for more general consumption and although conventional nanotube products are being priced at between US$100-700 a kilogram, absolute top shelf products can still fetch between US$20,000 and US$50,000 a kilogram," he said.
"We expect Eden's premium products to currently attract somewhere around the US$400 a kilogram price level, with nanotubes commanding significant price premiums to nanofibres.
Mr Solomon was keen to talk up the prospects.
"Their potential does seem endless and while there are conflicting reports on the exact scope for future sales, figures of around US$7.72 billion by the year 2015 - up from just US$6 million in 2004 - are fairly consistent. Some forecasters go as high as US$26 billion within four years.
"Compound annual growth rates of around 11 per cent are predicted but at least the general consensus is that the price floor in a nanotube sector will annually be worth billions in US dollars within 5-10 years."
Samples of Eden Energy's product are with a number of commercial distributors in the US for analysis. (ASX: EDE)
The valuation was sought to distinguish the value to the intellectual property, know how and licenses as currently held by EnviroMission and its subsidiaries from the Solar Tower license that was progressively amortized and fully impaired in the 2010 annual accounts.
The assessment, by Acuity Technology Management, will be referenced in the notes to EnviroMission's Half Year report as at December 31, 2010, it said.
EnviroMission will now seek advice on revaluing the intellectual property above its current carrying value in the balance sheet.
Roger Davey, EnviroMission's chief executive, said the valuation includes commercial prospects and outcomes such as the recent Power Purchase Agreement to sell electricity generated from the proposed Arizona Solar Tower to the Southern California Public Power Authority (SCPPA).
"A relief from royalties approach was applied by Acuity Technology Management that included a probability adjusted net present value of likely future cash flows, based on revenue projections supported in the Power Purchase Agreement documentation with the Southern California Public Power Authority (SCPPA).
"Consideration was also given to the prospects for further Solar Tower facilities using economic modeling that moderated perceived risks to successful commercial development and project financing discounted to present value using a discount rate based on Capital Asset Pricing Model.
"This valuation reflects a current value of the actual technology that is being commercialized in Arizona for the SCPPA Power Purchase Agreement (PPA); it reflects the value of the enhancements, research and development and detailed engineering that has produced intellectual property and know how to provide greater commercial prospects from the technologically and economically enhanced Australian Solar Tower renewable energy technology that is owned by EnviroMission Limited," said Mr Davey. (ASX: EVM)
The company also has a new set of directors. The new chairman, Peter Carre, is also chairman of Water Resources Group and on the board of several other technology and investment companies.
The four other new directors are Richard Arnold, who has an investment and technology commercialization background; Simon Barnes, a co-founder of GreenBox and Whitespace Private Equity; Ronald Langley, an investor and non-executive director of Peat Guinness Group; and Christopher Mrakas, also a co-founder of GreenBox with a background in technology aand private equity.
GreenBox is seeking to raise up to $5 million at 10 cents per share. This would represent 23.8 per cent of the company's issued capital and give it a market capitalization of $21 million.
Mr Carre said the funds raised will relaunch the company's energy retail business, which combines the energy retail assets and licenses of subsidiary Jackgreen International Pty Ltd and the technology of GreenBox IP, which has developed an automated home energy monitoring and management service designed to reduce consumer bills and promote energy efficiency.
There is a market opportunity for a smart energy retailer "to deliver superior customer service and reduce energy bills without affecting consumer lifestyles," he said. GreenBox will help consumers use power more efficiently and reduce their carbon footprint.
The prospectus gives no financial forecasts due to the many risks involved in commercializing the business.
The business had sales of $2.3 million in 2009-10 and made a loss of $19.4 million. Net equity at 30 June was minus $1.5 million.
The Easy Being Green business was sold in March 2010, although this was a small part of Jackgreen's business.
The question for investors is whether the new board can turnaround the former Jackgreen business and do so by commercializing the start-up GreenBox technology business? (ASX: GNB)
The company said Mr Bell was born and educated in England, and brings "a profound skill set encompassing decades as a practising and consultant geologist with experience throughout the world, with a more recent focus on the assessment and commercialization of significant coal-bed methane deposits within Queensland".
He also has Australian business experience from his investments in several alternative energy, waste disposal, water treatment and low-emission transport technologies.
Mr Filippo will act as alternate director for Mr Bell should the need arise. (ASX: GNV)
Wasabi said its consolidated ownership of GGL gives it the freedom to effectively commercialize the patented Kalina Cycle technology portfolio. (ASX: GER)
The capital is to redeem the balance of convertible notes issued to Belgravia Strategic Equities of $1 million. The remaining funds following the redemption will be used for working capital and to pay the interest on the convertible notes.
Following the rights issue Intermoco will have 2,476,729,460 shares on issue. (ASX: INT)
Orbital said it did not know why. (ASX: OEC)
The funds will be used to continue production improvements at the company's Walkamin Factory in far North Queensland, manufacturing and commissioning of new veneering units and for working capital purposes.
The placement will see 8.3 million new shares issued to clients of Taylor Collison and 3.3 million new shares to directors of Papyrus.
For every two shares subscribed, investors will receive one free unlisted option exercisable at any time by 31 March 2013 at 12 cents. (ASX: PPY)
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