Eco Investor Update
A Weekly News Update for Environmental Investors
September 2011 - No 50
Sims Metal Management
No news from Sims has coincided with the latest fall, apart from the release of its preliminary final report on 26 August when it shares closed at $15.29. Sims' 2010-11 annual results and dividend were up on 2009-10, and at the time it said "Pricing for processed ferrous metals remains relatively attractive, freight costs remain supportive of our global trading platforms, and intake currently remains steady."
This was"Despite the dramas of US politics and credit downgrade, continued European sovereign debt fears, and Chinese inflation worries." However "Due to the uncertainty involving global economic conditions that impact our business," it was unwilling to provide specific future guidance.
Sims is by nature a volatile stock and its share price is much driven by commodity metal prices. These have been trending down in recent months. Talk of a possible double dip recession in the US and Europe would also lower metal prices.
Meanwhile, director Daniel Dienst has acquired 181,654 American Depository Shares (ADSs) through the exercise of options and then sold 181,654 ADSs.
The estimated value was US$957,849 - based on proceeds of US$2,481,926 from the sale of 181,654 ADSs under the Sims Metal Management Long Term Incentive Plan less the total options exercise price of US$1,524,077. (ASX: SGM)
Dart remains an early stage company.
In August Dart write off $10.8 million of exploration assets and $1.8 million of goodwill for its Hanoi Trough PSC assets in Vietnam. The company said it accounted for this as an adjusting post balance sheet event and the amounts have been written-off in the income statement for the year ended 30 June. (ASX: DTE)
Hastings Diversified Utilities
The GTA, also referred to as Easternhaul, was flagged to the market in October 2010 and again in January 2011 but was subject to two conditions: a final investment decision on the second LNG train that was proposed by the Gladstone LNG (GLNG) partnership that includes Santos, and lender consent. As both conditions have been satisfied, the agreement is now unconditional.
Hastings Funds Management Ltd, the manager of HDF, has appointed Andrew Day as its chief executive nd a director, commencing on 17 October.
Hastings said Mr Day is an experienced chief executive with a track record domestically and internationally. "He brings a wealth of expertise gained from leading complex businesses across diverse industry, geography and various stages of development. In these roles Andrew has demonstrated strategic insight, leadership and stakeholder management skills which will be of great benefit to Hastings and its investors," it said.
Until recently he was chief executive of Eircom Holdings Ltd, an investment company that managed interests in the Irish telecommunications business Eircom and the Israeli directories business Golden Pages. Prior to this, he was chief executive and then chairman of Truvo, a private equity owned company in Europe with "a complex portfolio of companies". Mr Day has also been chief executive at Sensis in Australia, and before that held several senior roles at Telstra.
Colin Atkin continues as chief executive of HDF.
HDF's distribution for the September quarter is 2.5 cents per security. (ASX: HDF)
The company said it knew no reason for the price drop and increase in volume.
Two days later it released its 2010-11 results and a loss of $59 million. The 2009-10 loss was $43 million.
Lynas has appointed Kathleen Conlon as a non executive director of the Company, effective from 1 November. Ms Conlon is currently a non-executive director of CSR and REA Group. She also serves on the NSW council of the Australian Institute of Company Directors and is a member of Chief Executive Women.
Ms Conlon spent 20 years in professional consulting where she assisted companies in a diverse range of industries achieve increased shareholder returns through strategic and operational improvements.
Lynas has finalized the working capital debt facility announced in its June quarter report. The facility is $125 million and has a tenor of 18 months. The lenders are JP Morgan Chase Bank, N.A. and Sumitomo Mitsui Banking Corporation.
Executive chairman, Nicholas Curtis, sais the facility reflects the continuing strong institutional support for the company's strategy. (ASX: LYC)
It will be the largest lithium calcining kiln in the world and will enable processing of 17,000 tonnes of lithium carbonate per annum as part of the continuous flow processing plant.
Managing director Iggy Tan said "With the major kiln now in place, we can rapidly progress further work at the Jiangsu plant. We continue to make good progress and remain on track to commission and complete the Project." (ASX: GXY)
Tox Free Solutions
APLNG is the 50-50 joint venture betewen origin Energy and ConocoPhillips. However, Tox did not say when the contract would start. (ASX: TOX)
This will give the wind farm the capability to generate 300 GW hours a year of renewable energy, enough to power the equivalent of 40,000 homes.
Commencement of the project will be later this year with completion during 2013.
AusChina is a joint venture with CBD and two of China's biggest renewable energy companies, Datang and Tianwei. AusChina aims to capture a third of Australia's wind energy market over the next eight years.
For its management role, CBD is entitled to a fee of 0.5 per cent a year of AusChina's assets.
The Taralga wind farm project is also the first major wind farm project for CBD.
The company's shares hit a two year low of 8 cents on 23 September. (ASX: CBD)
The Three Springs project is a 330 MW low emission open cycle gas turbine (OCGT) power station 3 kilometres from the town of Three Springs, which is 270 km north of Perth.
Managing director and chief executive, Philip St Baker, said the project is intended to serve growing demand for electricity in the emerging mid-west mining province of WA, and would be available for other customers on the south west electricity grid.
Mr St Baker said "The next stage in the development is finalizing fuel supply and electricity off-take agreements and capacity certification from the Independent Market Operator, which will allow us to make a final investment decision on the development.
"Once a final investment decision is made, construction would take about two years for the power station and about six months for the pipeline."
Three Springs would be the third low emission power station developed by ERM Power in WA after the $400 million 320 MW Kwinana power station and the $435 million 330 MW Neerabup power station and gas pipeline.
Director Trevor St Baker has indirectly acquired another 20,801 shares for $32,413, an average price of $1.56. (ASX: EPW)
Micro Cap Companies
Pincott's has been in the tyre recycling and retreading business for 50 years, but has decided to discontinue its tyre recycling operations and will sell the associated plant and equipment to Carbon Polymers.
Carbon Polymers will employ the additional recycling assets at its Sydney, South Australian and Western Australian sites to increase capacity and refine output.
The company will issue 200,000 shares at 30 cents per share to the vendor.
"This acquisition will deliver benefits to the group immediately and will supplement complimentary technologies," said the company. "CBP will look to further increase its stated capacity either through organic growth or through acquisitions." (ASX: CBP)
Researchers at the University of Surrey Advanced Technology Institute used multi-walled carbon nanotubes (MWCNT) to enhance the photo-current of organic photovoltaic (OPV) solar cells, according to the research.
Integrating carbon nanotubes (CNTs) could boost OPV efficiency without losing the solar technology's light weight, low cost, and printable manufacturing benefits.
The CNTs were said to offer improved charge transfer from the solar cell to the electrical circuit.
Eden said other research has shown that a carbon nanotube-based supercapacitor can function well in extreme environments.
Researchers at Rice University in Houston, Texas, created a solid-state, carbon-nanotube based supercapacitor. The primary electrodes were bundles of single-walled carbon nanotubes.
The research resulted in a supercapacitor that may combine the best qualities of high-energy batteries and fast-charging capacitors in a device suitable for extreme environments.
Eden's interest in the research would be in its ability to expand the potential market for its carbon nanotubes. (ASX: EDE)
The Airec heat exchanger was selected as part of a larger system in a competitive tender. Enerji said it gave the tenderer an edge due to its design that means it is less expensive, more compact, lighter and more efficient than its competitors.
Enerji has several Airec Cross 30 plate heat exchangers on order for the Horizon Power Carnarvon project but this is the first sale it has made to an external party under its distribution agreement with Airec AB of Sweden. Enerji has the exclusive distribution rights for a number of Airec's heat exchanger products in Australia and New Zealand.
Enerji chief executive, Greg Pennefather, said "I believe we will see an increasing desire to capture low grade waste heat in Australia and put it to good use. This should see an expanding sales market for our Airec heat exchanger range in applications where an Opcon Powerbox is not applicable."
Airec has sold systems in Sweden, Germany, Holland, Belgium, Austria, Bulgaria, Czech Republic, Italy, China and Korea. Sales of these heat exchangers have been growing year over year, and Airec expects to sell around 900 units this year, said Enerji.
Early estimates put the Australian market at over 1,000 units.
Enerji has been included by New York equity research firm RB Milestone Group in its RB Milestone Portfolio, a group of companies that it will introduce to the market via a combination of traditional and new analytical and communication strategies. These include equity research, The Portal Network, market intelligence and non-deal road shows.
RB Milestone has also commenced research coverage on Enerji with a report that is available on The Portal Network (rbmilestone.com/register) and Enerji's website. News, discussions and research on Enerji can also be followed at The Portal Network website. (ASX: ERJ)
Liquefied Natural Gas
The QGP expansion is from Wallumbilla to Gladstone for the possible supply of gas to the company's Gladstone LNG Project at Fisherman's Landing in the Port of Gladstone.
The agreement follows the Pre-FEED Study recently completed by Jemena, which determined that the existing QGP pipeline could be upgraded to provide gas into Gladstone in 2014 for the first LNG train of 1.5 million tonnes per annum LNG production capacity and in 2015 for a second LNG train of similar capacity. (ASX: LNG)
Managing director Peter Henderson said "The issue of coal seam gas has attracted significant public attention lately and Metgasco's submission to the Inquiry is an opportunity for us to correct a number of misconceptions about the industry."
"There are some in the community who feel that the coal seam gas industry is a new industry and is a risk to the environment. This is not the case. Coal seam gas is natural gas and the natural gas industry has operated in Australia since supply commenced in 1906.
"The techniques used to extract coal seam gas are essentially the same as those for conventional oil and gas production and have been developed over 100 years. Coal seam gas operations have been in place for 30 years internationally and for 16 years in Australia. International and domestic experience has demonstrated that the CSG industry does not damage the environment, including aquifers," he said.
"Ensuring that we produce gas in an environmentally responsible way is an essential priority for Metgasco. Metgasco's operations will not have a negative impact on groundwater. This assessment is based on findings by an independent consultant. We have studied the coal seams from which we plan to produce gas. They are deeper and separated from the higher level aquifers from which water is currently drawn for agricultural purposes. We use standard gas field technology to drill our wells and isolate the coal seam and other formations, including aquifers." said Mr Henderson.
Metgasco operates in northern NSW.
"Metgasco works hard to maintain a good relationship with landholders and the broader community. To date Metgasco has more than 300 different access agreements with landowners, all of which have been negotiated on a voluntary basis. We aim for a win-win relationship with only a fraction of their land being used for our operations, the landowners' activities are minimally impacted and we provide additional income to supplement their existing business.
"An Investment Advisory Company has estimated that the annual payment to a landowner from the coal seam gas industry is between 5 to 10 times greater than the value of the agricultural output for the same land," he said.
"From a regional sense, coal seam gas also provides a great opportunity to create more jobs in the local area. We have estimated that the operation of a major CSG project will directly involve approximately 500 full-time jobs and will generate substantial economic activity in the local area where support services and infrastructure will be required."
He also said that electricity generation that uses coal seam gas rather than coal produces up to 70 per cent less greenhouse gas emissions and provides the lowest cost means of reducing greenhouse gas emissions. (ASX: MEL)
Mission said the letter has no effect at this time on the listing of its stock on the Nasdaq Global Market, and its stock will continue to trade on the Nasdaq Global Market under the symbol MNEL.
Mission has an initial 180 days or until 19 March 2012 to regain compliance, which could happen at any time if the market value of its listed securities closes at the limit or more for a minimum of 10 consecutive business days.
If Mission does not regain compliance by the deadline, its stock may be delisted.
Mission could appeal any delisting decision, and consider applying for a transfer to the Nasdaq Capital Market, which has a lower market value of listed securities requirement. (ASX: MBT)
In partnership with the Institute of Technology & Renewable Energy in Tenerife, the University of Barcelona, University of Laguna and Institute of Volcanology in Spain, Petratherm has been awarded the government subsidy for the group's new GeotherCan project.
The GeotherCan project has been set up to develop 3D models for the characterization of geothermal resources in the sub-surface of the Canary Islands through the use of geophysical, geochemical and geological methods.
Managing director Terry Kallis said the GeotherCan project is a major geothermal exploration program across the Canary Islands.
"Importantly for Petratherm, this funding support not only supports the GeotherCan project, but it will also provide substantial additional information to Petratherm - at a fraction of the normal research costs - which will assist our other projects in the region," he said.
The work to be carried out on the islands of Tenerife and Gran Canaria in areas where Petratherm holds geothermal exploration tenements.
"We envisage that the information gleaned from the GeotherCan project will add tremendous value to Petratherm's Spanish projects through a better understanding of the sub-surface system on the island, in particular our more advanced Tenerife volcanic geothermal project where we are planning an exploration well."
The subsidy will cover 40 per cent of the total value of exploration work, which Petratherm estimate at more than $2.5 million.
Petratherm has three geothermal exploration licenses on Tenerife, the largest of the seven islands in the Spanish archipelago with a population of one million people. The Canary Islands are well known for their volcanism and are considered excellent for exploring conventional geothermal technology. (ASX: PTR)
Phoslock Water Solutions
RedFlow raised $842,000 through its share purchase plan and said it was supported by a large number of shareholders. The issue price was $1, the same as for the placement to institutional and sophisticated in August.
The proceeds of the SPP and the Placement will be used to accelerate the introduction of the large scale outsourced manufacture of the company¡|s core zinc-bromine battery modules (ZBM); support product roll-out in selected markets; and for working capital.
Director Peter Pursey indirectly acquired 5,000 shares through the share purchase plan. (ASX: RFX)
The target horizons in Glenlyon 1 are expected to occur from about 1,000 metres below surface and will tested to determine the gas content and composition of the coal seams intersected.
WestSide ehief executive officer Dr Julie Beeby said Glenlyon 1 is the first of up to four wells to investigate the hydrocarbon potential of the area.
"These tenements in the north-western part of the Galilee Basin cover a combined area of more than 14,000 square kilometres, which WestSide believes could contain up to 21 trillion cubic feet of gas in place, so we are quite excited now that drilling is underway," she said.
The program is expected to be completed by the end of the 2011 calendar year at an estimated total cost of $4 million. WestSide has a 51 per cent operating interest in ATP 974P and ATP 978P in joint venture with Mitusi E&P Australia Pty Ltd, which has 49 per cent of both tenements. (ASX: WCL)
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