Eco Investor Update
A Weekly News Update for Environmental Investors
May 2011 - No 33
The next day Dart Energy announced the completion of the retail component of its underwritten entitlement offer to raise $100 million. The retail offer raised $46 million, with shareholders subscribing for 15.1 million shares worth $11.3 million.
Chief executive officer, Simon Potter, said "At completion of this capital raising Dart will have free cash of over $150 million, and no debt. Dart's portfolio-wide forward program of activity is thus fully funded. That program involves drilling over 100 exploration and appraisal wells and commencement of early development work on several projects, which will take 15 to 18 months.
"During that time Dart expects to rapidly mature its substantial resource base and establish commerciality at a number of projects while seeking early cash flow. Dart's strategy remains focused on operating in locations with strong energy demand and where attractive margins are available, enabling us to pursue step-change organic growth initiatives at a time when the market is actively pursuing alternative energy investments. We are confident that the work program and other initiatives we have planned will build substantial value for our shareholders." (ASX: DTE)
The Malaysian Government sponsored report into the health, safety and environmental aspects of the Lynas Advanced Material Plant (LAMP) under construction should be submitted to the Government by the end of June, and the findings will be made public.
Meanwhile Lynas Corporation has been added to the MSCI Australia Index in the latest changes to the constituents for the MSCI Global Standard Indices. (ASX: LYC)
Ceramic Fuel Cells
conenergy ag's services include strategic and management consulting, mergers and acquisitions, marketing and training courses. Since its establishment in 1996, it has advised and built partnerships with more than 500 energy utilities and other energy sector customers.
The conenergy group includes energate, the leading energy information company in the German energy market; is the co-host of E-World, the largest energy fair in Europe; and is co-founder of electric car manufacturer mia electric Gmbh which starts production of its electric city car in June 2011.
Ceramic Fuel Cells' chairman, Jeff Harding, said Mr Dudenhausen's network and experience will be a tremendous asset to the company as it sells its products in the German market.
Ceramic Fuel Cells' BlueGen gas-to-electricity generator has won both the 2010-11 CEO Award' and the Design for a Sustainable Future' award category at the biennial DuPont Australia & New Zealand Innovation Awards.
First held in 2003-04, the DuPont Australia & New Zealand Innovation Awards recognize the commercialization of outstanding science and technology. Categories include Building Innovation, Agriculture and Food Production and Marketing, Performance Materials, Design for a Sustainable Future, and Medical and Healthcare.
Entries were judged on degree of innovation, scope of application, commercial significance and benefit, degree of collaboration, and environmental sustainability. (ASX: CFU)
The downturn does not appear to have detered chairman Byram Johnston, who on 13 May acquired 20,000 shares at 7.2 cents each. (ASX: GCG)
Micro Cap Companies
"At full capacity, we expect EBITDA and net profit margins of around 50 per cent and around 35 per cent respectively from this facility as the output will be shipped for value-added processing in Australia, thus enabling higher prices," it says.
"At full capacity, expected by FY13, the Thailand facility will contribute strongly to free cash flows."
The second facility, to be developed in South Africa and in which Cell Aquaculture will have a 40 per cent interest, will have capacity for 2,000 tons.
"At the current share price of A$0.083, we find CAQ to be an attractive investment opportunity with strong upside and limited downside risk. As such, we initiate coverage with a target price of A$0.25/share. We have used a discounted cash flow model to value the expected cash flows from the Thailand and South Africa facilities," says RB Milestone Group. (ASX: CAQ)
EcoQuest has dispatched its first shipment of Little Takas biodegradable nappies to the UK and will also its range of bamboo baby wipes. The first shipment will be available to consumers from mid-July. Sales will be processed through a UK-specific Little Takas website and leading UK e-tailers.
EcoQuest said it has successfully modified its 90 per cent biodegradable nappy for lower production cost to allow for a competitive entry into European and North American markets and a more competitive retail price in Australia.
"The modifications retain the product's biodegradability and increase the sustainability content while using materials from more cost effective suppliers closer to the current supply chain," it said.
Chair, Sylvia Tulloch, said "We are very excited at our first step into the international marketplace as we know our Little Takas nappies are world leading in terms of biodegradability, sustainability and performance. The potential market size is very significant and growing."
Managing director Matthew Hiscox said "Our UK based colleagues have excellent business, retail and marketing networks and experience so we are very confident about our ability to enter this market successfully." (ASX: ECQ)
The order is from the conductive paper market, opening a second electrically focused market opportunity. The first order was for use in batteries.
Eden says that due to their very high level of electrical conductivity, carbon nanomaterials can greatly increase the conductivity of paper. By adding carbon nanotubes or carbon nanofibers, commercially available paper can be made highly conductive, with sheet resistances being reported as low as 1 ohm per square.
"Conductive paper substrates can also dramatically improve film adhesion, greatly simplify the coating process, and significantly lower cost as compared to plastic for similar applications. Conductive paper is also an excellent lightweight current collector in lithium-ion batteries, creating a potential solution for high-performance energy storage devices," it said.
"With numerous applications emerging for the carbon nanotubes and fibres, the potential for sales of the carbon nanomaterials is anticipated to steadily increase over the coming years."
It quotes an analysts' briefing presentation by the Chemical, Material, Food and Energy practice at Markets and Markets, a US global market research and consulting company, that says that in 2010 the market for global carbon nanotubes was worth US$1,603.9 million, an increase of 28.3 per cent from 2009 due to increased production capacity.
Although field emission displays, lithium-ion batteries, integrated circuits, and super conductors have high potential in global carbon nanotubes market, Eden points out that the analysis has no reference to use of carbon nanomaterials in concrete or rubber, "both of which markets also look very promising, although likely to deliver lower prices for the carbon.
"With Eden's pyrolysis process projected to be possibly cheaper than most competitors, these additional markets are at this stage also hoped to be commercially viable, potentially opening up significant further demand."
Eden said Hythane Company continues to make progress with the next scale-up of the pilot pyrolysis system expected to be operational by August.
Due to improvements, the yield of carbon product from the reactor has been increased by about 40 per cent for a given loading of catalyst, improving the process economics and the quality of the nano-carbon.
If it works satisfactorily, the new pilot-scale system should be able to produce over 30 tonnes of carbon nanofibers per year plus 10 tonnes of hydrogen.
The first commercial production system, scheduled to be operational before the end of 2011, will comprise multiple pilot-scale sized modules combined into an integrated unit, which will be sized for a specific carbon production capacity or for a specific output of hydrogen. (ASX: EDE)
"However preliminary results indicate reservoir permeability (a key contributor to commercially required flow rates) is below target at this location."
The next two possible drilling locations are Boyle 1 and Fahrenheit 1. The order of the wells will depend on the timing of approvals.
At the partners' Deeps project, drilling of the Habanero 4 well could commence in July.
Geodynamics says it continues to evaluate the feasibility of reusing the Habanero 1 well as the potential re-injection well to pair with the proposed Habanero 4 production well to power the 1 MWe pilot plant.
Habanero 2 is not suitable for this purpose, but a work-over of Habanero 1 is feasible and the proposal has been put to Origin for their review.
"The proposed work program and budget to drill and undertake stimulation of Habanero 4, complete the work-over of Habanero 1 and commission the 1 MWe pilot plant was completed in April. This is now under technical and commercial review with Origin. Geodynamics will seek to secure program approval with Origin with a view to commencing drilling of Habanero 4 in July," said Geodynamics. (ASX: GDY)
Green Rock Energy
Green Rock's other, lower priority projects are the geothermal permits in the Perth Metro area targeting direct use of geothermal energy, the Worsley/ Collie Area together with BHP Billiton Worsley Alumina Pty Ltd, and its portfolio of geothermal licences other than those in the Great Artesian Basin in South Australia.
"These projects do not currently meet the criteria for Green Rock to give them priority. The Company will continue to progress these projects at a level that keeps options open and permits in good standing to enable activity to be increased should circumstances in the future change their relative merits," it said.
Earlier this month Green Rock and Pacific Hydro agreed to work together to develop power projects based on geothermal exploration permits and licences held by the companies in the North Perth Basin in WA and the Great Artesian Basin in SA. Initial power projects of at least 25 MW are contemplated in both Basins, and with success have the potential to lead to hundreds of MW from each Basin in the coming decade, they said.
In the Canning Basin Green Rock has a farm-in to permit EP 417 operated by New Standard Energy. Green Rock will partly fund the deepening and testing of the existing Lawford#1 well planned for the third quarter of 2011. NSE is well advanced in obtaining the necessary approvals and a further announcement on progress is expected in the next few weeks.
In Hungary, Green Rock's 50 per cent owned geothermal developer CEGE is preparing for the first geothermal concession tenders in Hungary, which are expected to be issued in the second half of 2011. Well data indicate geothermal reservoir capacity able to support several megawatts of power generation capacity. Project activity will step up in 2012 with first power production around a year after the completion of drilling, it said. (ASX: GRK).
Greenearth's subsidiary, Greenearth Solar Energy, and major Greenearth shareholder Advance Publicity Ltd will establish a high profile demonstration site at Port Melbourne only minutes from Melbourne's CBD. The eight Z20 units on the site will produce a peak output of 88 kW thermal energy (hot water) and 36 kW of electrical energy.
A trial of the ZenithSolar Z20 technology will be carried this year and success will result in Greenearth Solar Energy and ZenithSolar establishing an Exclusive Distribution Agreement for Australia, New Zealand, Indonesia and a number of Pacific Island nations. (ASX: GER)
WorleyParsons was asked to evaluate an upstream field development and pipeline transportation options to deliver gas from Metgasco's tenements to three LNG project options - a new LNG development at Fisherman's Landing at the Port of Gladstone; an LNG project at the Port of Brisbane; and a floating LNG development, with the FLNG vessel located 30 kilometres off the coast of NSW.
With LNG sales of 1.5 million tonnes per year and a conservative LNG price of $10/ mmbtu, the project would realize total revenues of US$29 billion over its 20 year life.
The upstream field development plan, covering well spacing, drilling, completion, gas and water gathering, compression, dehydration and water treatment and disposal was based on the supply of 90 PJ of gas per year over 20 years.
Capital and operating costs for each development option were calculated on the basis of all costs, from field costs (wells and gathering and process facilities), pipelines and the full LNG facility, said Metgasco.
The LNG Feasibility Study assumed four years of appraisal, environmental studies and approvals and community consultation before a final investment decision, followed by three years of development drilling, pipeline installation and LNG plant development. Should the appraisal/ approval process commence in early 2012, first LNG sales could occur in 2019.
Managing director, Peter Henderson, said that the study results were encouraging. "Not only do we have three economically attractive options, but Metgasco also has the potential to realize LNG prices and significant gas sales by potentially supplying gas to one or more of the four LNG projects currently in development in Queensland." (ASX: MEL)
Director Dr Ron Weinberger is the interim CEO. Dr Weinberger was instrumental in leading the development of the company's platform technologies and the roll out of its flagship Trophon EPR product.
Meanwhile, Nanosonics and GE Healthcare have upgraded their Memorandum of Understanding into a contract for the exclusive distribution of the Trophon EPR in North America and Canada. The partners are working to finalize the marketing, technical and support plans for the imminent US launch of the Trophon EPR.
Nanosonics will focus on expanding its North American presence with additional staff to support the roll out by GEHC, and commercial sales by GEHC are targeted for this quarter.
"The market opportunity in North America for Trophon EPR and associated consumables is the largest in the world, with over 200 million ultrasound procedures performed annually in North America. GEHC has a leading market position as the equipment supplier of choice for many of the customers that Nanosonics is targeting," said the company.
Nanosonics has also given non-exclusive OEM rights to GE Healthcare for other regions in the world where it already has regulatory approval to market the Trophon EPR.
GEHC has non-exclusive distribution rights for the European market, where the Trophon unit can be included as a bundled offering with GEHC products. A strategy has been developed for the staged release of products into Europe targeting priority countries, said chairman, Maurie Stang. (ASX: NAN)
The Sprint Gas business was founded in 1978 by the Boemo family, who will retain 45 per cent of the business, "with appropriate put and call options between the shareholders".
Sprint Gas imports, assembles and distributes automotive LPG and CNG conversion kits in the Australian LPG aftermarket, where it is one of the largest distributors with forecast sales of $7 million for the year to 30 June 2011.
It distributes OMVL SpA, AEB Srl, Tomasetto Achille Srl product, all manufactured in Italy, and Linh Gas Cylinders from Thailand. Distribution centres are in Victoria, Queensland and Western Australia.
Orbital will make an equity investment of $2 million in the newly formed entity. The new entity will have total business assets of $3.6 million, including debtors and creditors; and a small component of goodwill will be assumed by Sprint Gas. Key management and operating personnel will transfer to Sprint Gas.
Orbital's chief executive, Terry Stinson, said "We are very pleased to be able to expand our LPG aftermarket business. Sprint Gas has been a clear leading player in the Australian LPG aftermarket for many years. Its product portfolio combined with Orbital's "Liquid" product, will give the new business a full range of performance and price options to offer to the market.
"The acquisition fits well with Orbital's alternative fuels strategy and also fits with our goal to grow our domestic business.
"Sprint Gas is a solid and long standing business; even in the current tough market conditions it is profitable and cash flow positive. Orbital's strategy of investment in alternative fuel businesses, coupled with the market expansion opportunity offered by Sprint Gas and the market growth potential for LPG from increasing fuel costs, all support the decision to move forward with this acquisition." (ASX: OEC)
Phoslock Water Solutions
Phoslock has three licensees covering continental USA, and these report good initial sales and an impressive array" of pipeline projects, a number of which are scheduled to be applied over the next six months.
In addition, four projects are scheduled to be completed in Canada over next few months, and a large project in Mexico to commence in early 2012.
The Canadian projects are lakes, storm water basins and parts of the Holland River, all in Ontario.
The stormwater application in the metropolitan area north of Toronto is part of a series of applications to stormwater basins to lock up phosphorus in these basins. Phoslock said it has undertaken considerable research on stormwater basins showing that the currently used methods do not lock up phosphorus adequately. This applies to hundreds of stormwater basins, some up to two hectares in size.
The planned river and lakes projects will require up to 150 tonnes of Phoslock. In addition, GDG Environnement, Phoslock's licensee for Quebec and the Atlantic provinces, has identified a number of new projects, some of which could be significant.
In Mexico over the past 18 months, Phoslock has been working with authorities responsible for the restoration of a major metropolitan water supply reservoir which suffers from severe algal blooms caused by high internal and external phosphorus loadings.
In-lake trials with Phoslock will be done in the second half of 2011 and if successful an application of several thousand tonnes of Phoslock on the whole reservoir can be expected during 2012 and 2013, said the company. Additional measures are also planned to reduce phosphorus inputs from the catchment area.
The news has helped bump up Phoslock's share price, which has now risen to 9 cents from an all time low of 5.1 cents in April. (ASX: PHK)
Southern Crown Resources
The initial grid based rock sampling program comprised 259 samples, of which 10 samples had Total Rare Earth Oxides (TREO) of over 5 per cent. The maximum was 22.09 per cent, the highest concentration so far in an exploration sample at the project.
29 samples had TREO concentrations of over 2 per cent, with other highly significant values of 11.18 per cent, 13.09 per cent, and 13.47 per cent.
The company said a program of detailed mapping and sampling aimed at delineating targets for exploration drilling is planned to commence next month, and an anomaly to the west of the sample area requires further investigation below shallow cover.
Situated in north-eastern Zambia, Nkombwa is one of two rare earth element projects held by Southern Crown Resources. (ASX code: SWR)
Water Resources Group
2,136,743 shares will be released from escrow on 31 May. (ASX: WRG)
The worst was that it generated gross revenue of $1.23 million, down 12.3 per cent on the previous quarter. This was due to the continued impact of wet weather on production and related activities, however the downward trend had been reversed with daily sales rising since the end of February.
The company had $28.9 million in cash at 31 March, excluding outstanding cash calls yet to be paid to WestSide by joint venture partners at the end of the period. (ASX: WCL)
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