Eco Investor Update

A Weekly News Update for Environmental Investors

4 February 2013 - No 115

____ Core Securities ____

ASX 100

APA Group
APA Group’s securities touched a new all time high of $5.99 on 29 January. (ASX: APA)

ASX 200

Envestra’s shares reached a new five year high of 99 cents on 30 January. (ASX: ENV)

GWA Group
GWA Group’s shares touched a new one year high of $2.58 on 31 January. (ASX: GWA)

ASX 300

Tox Free Solutions
Shares in Tox Free Solutions spiked to a new all time high of $3.44 on 31 January. (ASX: TOX)

Emerging Companies

Energy Action
Energy Action’s shares rose to a new all time high of $3.55 on 25 January. (ASX: EAX)

Tassal Group
Tassal Group’s shares rose to a new one year high of $1.62 on 29 January. (ASX: TGR)

____ Satellite Securities____

ASX 200

Energy World Corporation
Energy World Corporation said commercial production is imminent from its new 65 MW gas turbine at the Sengkang Power Plant in Indonesia.

The company has acquired seismic data for its Sengkang gas field to assist with finding new gas for its Sengkang LNG Plant. (ASX: EWC)

ASX 300

Infigen Energy
Infigen Energy’s first half production and revenue were both up on the December 2011 half year. Production was 2,161 GWh, up 4 per cent, with US production down 1 per cent and Australian production up 13 per cent. Revenue was $134.2 million, up 7 per cent, with US revenue down 4 per cent and Australian revenue up 20 per cent. (ASX: IFN)

Emerging Companies

Carbon Conscious
Shares in Carbon Conscious touched a new all time low of 5.5 cents on 31 January. The low was reached soon after the company announced the pricing for its share purchase plan at 5 cents per share.

Carbon Conscious wants to raise up to $1.5 million with $1.2 million from the share purchase plan and $300,000 from a placement to institutional and sophisticated investors.

It will also issue a free listed option for every two shares subscribed for. The exercise price is 8 cents and the expiry date is 31 March 2015.

The capital will be used to repay $ million of the convertible notes held by Aroona Management Pty Ltd. The balance will be used in the carbon and energy efficiency markets and for working capital.

At 31 December Carbon Conscious had cash of only $348,000. (ASX: CCF)

CBD Energy
CBD Energy had revenue of $35.3 million for the December quarter and $47.4 million for the December half. Net operating cash flows were $12.3 million and $10.6 million respectively.

Its longer term strategy of cash flow diversification resulted in a significant turnaround in the December quarter, it said. It received the proceeds from the sale of its 5 MW solar project in Italy and development fees and reimbursements from the Taralga wind project. Inflows from these projects were $22.6 million.

The proceeds were used to pay for development costs and working capital and to retire $11.5 million in debt.

The company said all operating businesses are responding well to restructuring initiatives, and the Australian solar installation business is growing again and good gains are expected in the second half.

However, cash at the end of the quarter was only $570,000. (ASX: CBD)

Novarise Renewable Resources International
Plastics recycler Novarise Renewable Resources International received revenue of $32.4 million in the December quarter, bringing full year revenue to 31 December to $94.4 million. Net operating cash flows were $16.7 million and $24 million respectively. (ASX: NOE)

Quantum Energy
Quantum Energy’s shares fell to a new all time low of 0.9 cents on 29 January.

The company has reported December quarter receipts of $7.3 million and December half revenue of $26.6 million, indicating a significant fall in the December quarter. Net operating cash flows remained slightly negative. (ASX: QTM)

Solco reported customer receipts of $3.3 million for the December quarter and $7.3 million for the half year. Net operating cash flow was minus $1.1 million for the quarter and minus $1.3 million for the half year, suggesting a turnaround is not imminent. It had cash of $2.1 million. (ASX: SOO)

____ Pre Profit Securities ____

ASX 300

Ceramic Fuel Cells
Ceramic Fuel Cells (CFCL) has entered a distribution agreement with social enterprise iPower Energy to deploy its BlueGen units in the UK social housing sector and take advantage of the increased feed in tariff.

The agreement is for the minimum delivery of 200 BlueGen units in 2013 and another 200 BlueGen units in 2014. The arrangement has limited exclusivity for the company’s use of BlueGens in the social housing sector.

iPower is a developer of low carbon projects that use a range of technologies to reduce energy bills and carbon emissions. It offers guaranteed discounts on electricity tariffs to social housing tenants where BlueGen is installed. Installations are offered on a turnkey basis and can be fully funded by iPower.

CFCL said the agreement with iPower reflects its increased emphasis on using BlueGens in the social housing market where the cost savings can have most effect, particularly in apartment blocks where the electrical output from one BlueGen can be shared between up to four apartments.

Jon Cape, chief executive of iPower said “The use of BlueGen in social housing offers real scope to bring down fuel bills for the least well off in society. We are already at the detailed design stage with the first large project under this agreement and are attracting Expressions of Interest from a number of Councils and housing associations across the UK.”

iPower will use installation, sales and service partners who are approved by CFCL to deploy BlueGens across the country.

Bob Kennett, chief executive of CFCL said he looks forward to developing some key opportunities with iPower in the future.

During the December quarter, CFCL booked the sale of 43 units to revenue, bringing the half year total to 90 units. Receipts from customers were $2.2 million and $4 million for the half year. (ASX: CFU)

Micro Cap Companies

Aeris Environmental
Although revenue remained modest, Aeris Environmental said it had a profitable month in December, and more than halved its net loss for the half year to 31 December compared to the previous corresponding half.

Managing director David Fisher said the company has a number of initiatives to generate sustainable revenue growth and will provide an update this month.

The company has adapted several of the products from its R&D program and platform technologies for specific customers and aims to incorporate them into their commercial products.

“Each of the platforms continues to demonstrate high levels of efficacy and favourable results in third party testing compared to existing microbial control technologies,” he said. “Aeris is forecasting a significant growth in sales of its HVAC and refrigeration solutions, both in terms of the projections for existing customers and the progressive acquisition of new customers, particularly in the OEM sector.”

Convertible notes totaling $1.88 million were converted to equity during the December quarter. Loans totaling $600,000 were made by some company’s directors, $150,000 of which was the drawdown from an existing working capital line of credit of $250,000.

Cash at end of the quarter was only $303,000. (ASX: AEI)

Cardia Bioplastics
Cardia Bioplastics’ revenue for the December 2012 quarter was $1.3 million, with sales of $811,000 from Cardia resin and finished bioplastic products and $499,000 from wholesale raw material trading.

Revenue for the six months to 31 December was $2.1 million compared to $2.2 million for the same time the previous year. (ASX: CNN)

Utilities management provider Intermoco saw its cash position fall to $204,000 at the end of the December quarter, and will soon make an announcement about its funding strategy.

Only one new embedded network came online during the quarter. Chief executive Tim Hunt Smith said the timing of five sites has been delayed due to regulatory constraints caused by the application of solar rebates. These five sites will now be phased in gradually and commence during this fiscal year. Further sites also are expected to come online over the next six months, which should result in an increase in the company’s net operating cashflows by fiscal year end, he said. (ASX: INT)

Nanosonics saw its that sales revenue for the December quarter rise 173 per cent to $3.2 million on the previous quarter’s $1.1 million. It was up 16 per cent on the same quarter the previous year. The increase in sales revenue was due to continued growth in North America.

Chief executive Dr Ron Weinberger said that as the installed base of Trophon EPR units grows, sales of consumables will add to revenue. “It is early days for this shift but we are beginning to see rising revenues from consumables. This is an important aspect of our business model and revenues from consumables will grow in significance into the future,” he said. (ASX: NAN)

Pacific Environment
Pacific Environment said it continued to have positive operating cash flows in the December quarter of $0.34 million and that receipts from customers were $3.9 million. The strong cash has obviated the need to utilize the Bank of Queensland debtor financing facility since October 2012.

Chairman Murray d’Almeida said the group continues to demonstrate an ability to win substantial business from the government and blue chip companies. (ASX: PEH)

Phoslock Water Solutions
Phoslock Water Solutions has a won a $400,000 contract to treat two lakes in the UK. The project will further demonstrate the company’s methodology for controlling internal phosphorus loading in eutrophic (phosphorus enriched) lakes, said managing director, Robert Schuitema.

Decisions are pending on a further three separate Phoslock applications in the UK worth around $200,000.

PHK had net operating cash flow of minus $241,000 for the December quarter. Receipts from customers and grants were $428,000. The cash balance was $187,000 at 31 December.

The company’s working capital facility is drawn to $1,298,000, and a general meeting on 15 February will seek approval for the working capital facility to convert into shares at 4.6 cents each by 31 December this year. (ASX: PHK)

Po Valley Energy
Po Valley Energy’s revenue for the full year to 31 December was Euro 8.2 million or $10.1 million. Revenue for the December quarter was Euro 1.7 million or $2.1 million. Total gas production from its Sillaro and Castello wells for 2012 was 24.7 million standard cubic metres. (ASX: PVE)

Refresh Group
Bottled water company Refresh Group had December half revenue of $3.2 million, and net operating cash flows of minus $148,000. Cash was $194,000. (ASX: RGP)

Vmoto has made two board changes, appointing Simon Farrell as non executive chairman, and upgrading chief financial officer Yin How (Ivan) Teo to finance director.

Mr Farrell has over 30 years of experience in private and public corporates, including the mining industry at senior management and board level, and principally in the areas of finance, marketing and general management.

He is a Fellow of the Australian Society of Accountants and the Australian Institute of Company Directors. He resides in London where he is said to have strong relationships with brokers and fund managers.

Yin How is based in Nanjing, China, and is a chartered accountant with experience in corporate finance.

Managing director Charles Chen said the company will continue to search for additional qualified board members and senior management.

Vmoto has completed the development of newer versions of its electric scooters with new versions of the 80L, 80S, 120S and 120L. These have more sophisticated settings and new lithium batteries packs that are inter changeable with the silicone batteries pack.

The company said it will continue to improve its electric scooters.

Compliance testing is underway in Australia for Vmoto’s new E Milan, an electric version of its popular petrol Milan scooter and this is expected to launch in Australia in the second quarter.

Receipts from customers for the December half were $4.6 million. (ASX: VMT)

WestSide Corporation
WestSide Corporation had revenue of $6.8 million for the December half. Net revenue from Meridian was up 53.5 per cent on the same period the previous year at $1.95 million but down 3.5 per cent on the September quarter.

Gas sales were 493.3 terajoules, up 24.2 per cent on the same period last year, but down 6.5 per cent on the September quarter.

Discussions continue about the indicative takeover proposal. (ASX: WCL)

____ Pre Revenue Securities ____

ASX 100

Lynas Corporation
Lynas Corporation had some welcome news when Malaysia’s Kuantan High Court denied an application by the Save Malaysia Stop Lynas (SMSL) group for a judicial review of the Atomic Energy Licensing Board’s decision to issue Lynas with the Temporary Operating Licence.

One more judicial review remains about the Temporary Operating Licence, but Lynas said there is now no injunction or stay preventing it from carrying out its operations at its Malaysian plant. (ASX: LYC)

Micro Cap Companies

Carnegie Wave Energy
Carnegie Wave Energy has completed the detailed design for its Perth Wave Energy Project (PWEP), and is in discussions with suppliers to place orders for components and packages. It expects these to be completed this quarter. Component manufacturing and project construction should take 12 months, with the commissioning of the project forecast for the first quarter in 2014. (ASX: CWE)

Dyesol expects to announce a new strategic investor soon, and has signed a two year Research Collaboration Agreement with the Energy Research Institute at Nanyang Technological University in Singapore.

Dyesol said it continues to investigate strategic investment opportunities to strengthen its balance sheet and provide financial stability for its core R&D. It is in latter stage discussion with one strategic investor with detailed negotiations advancing favourably.

“As a world class chemicals company, the investor is motivated by the opportunity to secure access to the growth opportunity of dye solar cells and contract materials supply,” it said. “Such is the detail, information exchange and documentation, Dyesol expects to announce the investment within the next four weeks.

“At the present time, the investment is expected to be in two tranches, with the first tranche providing sufficient funds to significantly eliminate the prospect of any further dilution to Dyesol shareholders during 2013. With a number of key milestones expected during that period, there is an excellent prospect of capital growth for existing shareholders.”

Dyesol is also negotiating a bank facility to advance an agreed percentage of the eligible R&D tax rebate for R&D expenditure undertaken during the financial year.

Meanwhile, under their agreement, Dyesol and the Energy Research Institute at Nanyang Technological University will share resources and create scalable and commercially feasible solid state dye solar cell (DSC) technology.

Dyesol chief executive, Gordon Thompson, said “NTU will provide the innovation inspiration, and Dyesol will provide the development perspiration by scaling up and testing for durability the small scale technology that NTU will develop.

“It is a lot of work to go from a test cell to something that is industrially scalable, in terms of performance, durability, and cost, and that is where we spend more time in Australia. By working together to create scalable and commercially feasible solid state DSC we will open up a huge range of applications where we are currently limited with the materials we have.”

NTU and Dyesol will share intellectual property and Dyesol will have the opportunity to take out commercialization rights for the new IP under the agreement.

ERI@N executive director, professor Subodh Mhaisalkar said “In the upcoming projects, we aim to optimize the solid state DSC devices to high efficiency cells that are more reliable and more amenable to scaling and manufacturing than conventional liquid electrolyte based solar cells.”

The project will be overseen by the inventor of dye solar cell technology, professor Michael Graetzel, who is chairman of both the Energy Research Institute at NTU's Scientific Advisory Board and Dyesol's Technical Advisory Board. (ASX: DYE)

Greenearth Energy
Greenearth Energy director Dr Leslie Erdi OAM has passed away. Dr Erdi was a Melbourne businessman, philanthropist and founder of Erdi Fuels Pty Ltd. In 2011 he was recognized as Victorian Senior Australian of the Year. Greenearth said he contributed enormously to Greenearth Energy and will sadly missed.

A replacement will be nominated in due course. (ASX: GER)

Metgasco managing director, Peter Henderson, told ABC Radio that Metgasco has been a long time operator in the Casino region of northern NSW and retains the support of the local community, despite recent protests and the arrest of some anti coal seam gas activists.

The Daily Examiner reported that five protesters were arrested by police while obstructing outgoing trucks at the Glenugie drill site.

The trucks were removing drilling equipment to Metgasco's headquarters. "Protesters said they wanted to stop the trucks from going to what they say they believe is Metgasco's next drilling site at Doubtful Creek in Kyogle Shire," said The Daily Examiner.

"Three of the five protesters arrested had also been arrested on January 7 and were deemed by police to have breached good-behaviour bail conditions."

Metgasco said its Glenugie exploration well, Thornbill E04, has been completed successfully.

The Northern Star reported that "Anti-CSG protestors have shifted their focus to Doubtful Creek, the expected site of Metgasco's next drill site, after Metgasco completed drilling at Glenugie late last week.

"An activists' camp has already been established at the Doubtful Creek site and was manned throughout the weekend despite the wild weather," it said. (MEL)

Water Resources Group
Shares in Water Resources Group fell to an all time low of 0.8 cents on 1 February.

At 31 December it had cash of only $21,000. The company said it is in discussions with two groups of investors and is hopeful it can close a placement this month. (ASX: WRG)

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