Eco Investor Update

A Weekly News Update for Environmental Investors

28 March 2011 - No 26

ASX 100

DUET Group
AMP has increased its holding in DUET Group from 11.8 to 12.8 per cent. The shares were acquired by AMP Capital Investors between June 2010 and March this year. AMP is the joint manager of DUET Group with Macquarie.

DUET subsidiary WA Gas Networks is appealing to the Australian Competition Tribunal the final decision of the Economic Regulatory Authority of WA regarding its access arrangements for the Mid-West and South-West Distribution systems for the period to 30 June 2014. The appeal relates to the treatment of working capital, debt and equity. (ASX: DUE)

Sims Metal Management
National Australia Bank through MLC and other vehicles has become a substantial shareholder in Sims Metal Management with an 8.5 per cent interest. The shares were acquired between November and March at prices between $16.18 and $22.22. (ASX: SGM)

ASX 200

Energy World Corporation
Energy World Corporation is negotiating with InterOil Corporation and Pacific LNG Operations for those companies to take an ownership interest in the project to construct an LNG hub terminal at Pagbilao Grande Island in the Philippines.

The negotiations also include the establishment of a service company for associated downstream gas sales, purchase, transmission and distribution to the Philippine gas market.

In January Energy World won a permit to construct and operate the LNG hub terminal from the Philippine Government. The terminal will be adjacent to an existing power plant. (ASX: EWC)

Infigen Energy
Infigen Energy has acquired the remaining 50 per cent interests in four wind energy development projects, bring its interests to 100 per cent in each.

The development projects are the 120 MW capacity Flyers Creek project in NSW, the 70-100 MW Bodangora project in NSW, the 35-50 MW Cherry Tree project in Victoria, and the 450- 540 MW Woakwine project in SA.

The vendor was renewable energy project developer National Power Partners (NPP).

As part of the transaction, NPP acquired Infigen's interests in the 54 MW Glen Innes development project in NSW and about 100 MW of other development projects that were previously being developed jointly by NPP and Infigen.

Infigen has made a net cash payment of around $1.4 million to NPP.

Managing director, Miles George said "This transaction ensures that Infigen has full control over an attractive portfolio of projects which Infigen can progress according to market conditions. When conditions improve these projects are expected to be amongst the highest return projects within our Australian development pipeline."

Infigen and NPP continue to hold a 32 per cent interest each in the Walkaway 2 and 3 wind farm development projects in Western Australia which total 394 MW.

Infigen's Australian wind development pipeline is over 1,800 MW. (ASX: IFN)

Transpacific Industries Group
Transpacific Industries Group has appointed Ray Smith as a non-executive director. Mr Smith will chair the board's Audit Committee.

Mr Smith is currently on the boards of the listed WHK Group and K&S Corporation. He is also a trustee of the Melbourne & Olympic Park Trust, and for 11 years was chief financial officer at Smorgon Steel. (ASX: TPI)

ASX 300

Galaxy Resources
Galaxy Resources has lifted the total contained lithium oxide (Li2O) resource at its Mt Cattlin mine by 14 per cent to 197,000 tonnes from its last resource estimate in January 2010.

The upgrade is due to recent drilling, modeling and evaluation, which have boosted the total resource tonnes at Mt Cattlin by 14.6 per cent or 2.31 million tonnes, and the measured and indicated mineral resource by 12 per cent or 1.5 million tonnes to 13.8 million tonnes.

Including inferred resources, the Mt Cattlin mine now has a potential life of 18 years.

Galaxy Resources, together with Swan Energy Pty Ltd, has won the Energy Generation and Distribution Award by the Sustainability Energy Association of Australia. The award recognizes sustainable energy excellence and innovation and Galaxy's installation of state-of-the-art solar tracking technology at its Mt Cattlin project near Ravensthorpe in WA.

Mt Cattlin is the first mine in Australia to have real-time solar tracking panels as part of its power generating requirements. The feature means the solar panels can follow the sun in all directions and provides 15 per cent more power than a single axis systems.

The company has 14 giant solar trackers and two wind turbines, which generate 226 MWh per year.

The panels and turbine system was designed by Australian renewable energy suppliers Swan Energy.

The wind and solar hybrid system supplements Galaxy's 5 MW diesel generator, which accounts for on average about a sixth of the mine site's daily power. (ASX: GXY)

Emerging Companies

Clean TeQ Holdings
Clean TeQ Holdings has developed a patent pending process to extract and recover uranium from high saline acidic solutions. Called U-HiSAL, the process is another application of Clean TeQ's suite of ion exchange technologies.

The company said excellent results from laboratory test work have been obtained using the U-HiSAL ion exchange process on saline and hyper saline leach solutions. "Uranium loading in excess of 30 g U/L resin from a 100 ppm uranium solution containing 20 g/L chloride was achieved using Clean TeQ's R-603B resin," it said.

Clean TeQ has been working with UraniumSA to apply the U-HiSAL process at that company's Mullaquana Uranium project on the Eyre Peninsula in SA. "Mulluquana is a proposed in-situ leach project, which has formation waters typically in excess of 30,000 ppm salinity, significantly reducing the performance of conventional resin processes.

"Clean TeQ's U-HiSAL process has enormous potential for the uranium industry due to the significant capital and operating cost savings that it provides over conventional solvent extraction or desalinated water/ ion exchange routes," said Clean TeQ. (ASX; CLQ)

CO2 Group
CO2 Group has welcomed the introduction of the carbon farming legislation into parliament, saying regardless of the introduction of a carbon price, the legislation will enhance farm productivity and reduce the effects of climate change.

The Carbon Farming Initiative [CFI] is a voluntary scheme that allows landholders to participate in carbon reduction projects including planting trees, increasing soil carbon and reducing on-farm emissions.

Chief executive Andrew Grant said "The CFI provides a set of rules that is an Australian first for the creation of carbon offsets across many forms of agriculture, forestry and other industries."

"The CFI prevents people investing in scams," he said. It establishes a robust system that requires carbon claims be substantiated and well grounded in science, and will ensure the carbon offsets that businesses and individuals can buy are trusted and have real environmental benefits.

"The carbon price will fuel the market; however, it is not necessary for the success of the program."

CO2 Group is the largest provider of forest carbon sink plantings in Australia with over 16,500 hectares under management. (ASX: COZ)

Willmott Forests
Willmott Forests is to be wound up following a vote by creditors. The administrator, PPB Advisory, had earlier recommended that Willmot be wound up and placed into liquidation.

The administrator did not propose a Deed of Company Arrangement as it thought this was "not in the interests of creditors to bring the Administrations to an end and thereby return control of the Willmott Group to its directors."

The vote was deadlocked, with big creditors voting for a wind up and a larger number of smaller creditors, mostly growers, voting against. The administrator used a casting vote to wind up Willmott Forests. (ASX: WFL)

Micro Cap Companies

Carbon Polymers
Carbon Polymers has entered four commercial supply arrangements, including a supply arrangement with OneSteel, an ASX top 100 company with over 30,000 customers and more than 40,000 products globally.

"Presently we have finalized or are about to finalize 1,900 tonnes of sales," said the company.

"We have spent many months negotiating these arrangements, and this has involved extensive product testing and formulating QA [quality assurance] processes.

"CBP also has a total of 1,529 tonnes of monthly supply arrangements for various tyre derived products in the pipeline with the majority beyond product testing and into final terms and conditions."

The company also said it has not yet tapped into the full market demand but is pleased with the progress made to date.

Carbon Polymers also has a new director. Phillip Merhi is a certified practicing accountant and will assist the company to improve its internal control systems. (ASX: CBP)

Carnegie Wave Energy
Carnegie Wave Energy has given a clear outline of the next steps in commercializing its Perth Project 3 kilometres offshore from the HMAS Stirling naval base near Rockingham.

The components of the commercial scale prototype unit have been delivered and the offshore foundations, data communications and installation aids have been installed.

The pipeline design, by INTECSEA, a company within the WorleyParsons Group, includes a conceptual design for the high pressure delivery and low pressure return pipelines from the CETO array to the onshore power generation facility. It includes route selection and cost estimates and schedule for the pipeline's detailed design.

Two consultancies, RPS Consulting Engineers and Geomarine Marine, are developing a conceptual design for a mass deployable foundation system with integrated interconnecting pipework, instrumentation and accumulation; a cost estimate for foundation design, fabrication, deployment and recovery; and the requirements for completing the detailed design, fabrication and installation.

Tyco Tamar, a hydro turbine manufacturing and renewable energy service company, is developing a conceptual design and cost estimate for the supply and installation of the onshore powerhouse. This includes the hydroelectric turbine, generator, control systems, switchboard, metering, step up transformer to the 22 kV distribution system, and a modularized system to meet Western Power's rules for connection.

Other steps are flora and fauna surveys, acoustic surveys, environmental monitoring and reporting, a detailed environmental management plan, approvals and permits, and detailed safety management including emergency response plans.

If all goes well, Carnegie will look at the commercial rollout of projects in Ireland and Reunion Island from 2013. (ASX: CWE)

EcoQuest director Michael Greenup has acquired another 16,250 shares at 6.17 cents each. The company's shares have hit a two year low of 5 cents. (ASX: ECQ)

Work has commenced at the Carnarvon Power Station to install an Enerji waste heat recovery system that will improve power generation efficiency and lower CO2 emissions.

Enerji Limited has a Power Purchase Agreement with Horizon Power for the installation of an Opcon Powerbox at the Carnarvon Power Station. The Opcon Powerbox will use discarded heat energy from the exhausts of generators to generate additional, emission-free electricity. The system is expected to be installed and fully operational by mid-2011.

Enerji's chief executive officer Greg Pennefather said the Opcon Powerbox would provide strong economic and environmental benefits by reducing the fuel usage at the power station.

"Our technology has the capacity to increase Carnarvon Power Station's energy output by up to 700 kW without burning additional fuel or creating emissions," he said.

Enerji has drawn down $250,000 from its $25 million redeemable zero coupon convertible bond facility with Fortensa Special Opportunities Fund Limited. This second tranche consists of 25 convertible bonds issued at $10,000 each, with the funds to be applied to progress the company's works program.

Enerji has now drawn down $1.25 million from the facility. Fortensa has converted $250,000 to 11,870,845 shares or 1.85 per cent of issued capital. (ASX: ERJ)

ERM Power
Empire Oil & Gas is to develop both the Gingin West-1 and Red Gully-1 gas and condensate wells in Western Australia. The company said it is confident it has recoverable gas of up to 30 billion cubic feet and an estimated 2 million barrels of associated condensate from both the Gingin West-1 and Red Gully-1 wells.

The pricing of gas from Red Gully-1 and Gingin West-1 is the subject of negotiation with pipeline companies, Parmelia (Dongara to Pinjarra) and Dampier to Bunbury (DBNGP) and their customers.

Gingin West-1 and Red Gully-1 are part of the EP 389 Permit, in which ERM Power has a 21.25 per cent. (ASX: EPW)

Liquefied Natural Gas
Liquefied Natural Gas has signed a Pre-Front End Engineering Design (Pre-FEED) Study Agreement in relation to its Gladstone LNG Project at Fisherman's Landing, Queensland, while the Queensland minister of Mines has granted a Petroleum Facility Licence for the LNG project.

The Pre-FEED agreement, with Jemena Queensland Gas Pipeline, is to evaluate the expansion capacity of Jemena's Queensland Gas Pipeline to transport gas from the Wallumbilla Gas Hub to the Callide Gas Hub at Gladstone.

In February the company received Environmental Approval for a 20 kilometre gas pipeline from the Callide region in Queensland (Callide Gas Hub) to the LNG Project site at Fisherman's Landing. The existing Queensland Gas Pipeline (QGP), owned and operated by Jemena Queensland Gas Pipeline, operates from Wallumbilla to Gladstone with the route running through the Callide Gas Hub.

The Callide Gas Hub is where four new pipelines from the Surat Basin and two new pipelines from the Bowen Basin are planned to enter Gladstone to supply gas to a number of proposed Curtis Island LNG projects.

Liquefied Natural Gas said the QGP pipeline is operating at close to full capacity between Wallumbilla and Gladstone but may be capable of expansion to transport up to 520 terajoules per day (180 petajoules per year) of gas from Wallumbilla to the Callide Gas Hub, then connecting to the Fisherman's Landing LNG Project's planned 20 kilometre gas pipeline to its LNG plant site at Fisherman's Landing.

The Pre-FEED Agreement with Jemena is to evaluate the expansion capacity of Jemena's QGP to transport gas from the Wallumbilla Gas Hub to the Callide Gas Hub, and should be completed in June.

The Petroleum Facility Licence is to ensure that acceptable and safe practices are complied with throughout the design, construction and operation of the Fisherman's Landing LNG Project, and is a mandatory requirement for the operation of an LNG project in Queensland.

It is also one of the conditions precedent to the proposed 19.9 per cent share placement to CNPC HQCEC announced on 27 January this year. (ASX: LNG)

MediVac is reducing costs by consolidating its operations and administration into larger premises in Kings Park, Sydney. It will close its SunnyWipes office in Melbourne and move its head office from Northmead in Sydney.

Executive chairman Paul McPherson said the new premises will lead to greater efficiencies and cost savings. "The new facility will provide significant additional capacity to assemble our new MetaMizer 240 SSS clinical waste converters, as well as locating all management in the one location," he said.

The company has appointed Paul Cross as business development manager. Mr Cross will be responsible for building sales and customer relationships for the MetaMizer and SunnyWipes businesses in Australasia.

Mr McPherson said "Paul brings more than 15 years account management and business development experience in the waste management and recycling industry and has successfully project managed major government tenders, including most recently the Integrated Waste Management contract (statewide) for the NSW Department of Education and Training". He also has had extensive experience in finance and international banking and holds a Diploma in Export Management (AIEX).

Medivac is trading at around its year low of 0.4 cents per share. (ASX: MDV)

Mission NewEnergy
Following shareholder approval, Mission NewEnergy is consolidating its shares on a 50:1 basis on 28 March,

Mission said that "In theory, the price per share should increase by approximately 50 times as a result of the consolidation. For example, if shares trade at A$0.20 prior to the consolidation, they should theoretically trade at approximately A$10.00 post consolidation. However, there can be no assurance of the actual market price of the ordinary shares post consolidation as it depends on a number of other factors."

Mission has named Roger Frizzell, vice president of Corporate Communications at American Airlines, as the first member of its Advisory Board.

Mr Frizzell said "The airline industry's dependence on traditional oil and fuel and their skyrocketing costs are a monumental problem for us in addition to our environmental concerns. I am pleased and honored to join in the pursuit of alternative energy for our industry."

The chairman of the Advisory Board, Major General Wilbert D. Pearson (USAF-Ret), said "Roger's leadership in the private sector in his current role at American Airlines and his previous experience at AT&T and HP together with his personal commitment to finding solutions to environmental challenges provides Mission NewEnergy with another strong voice for reliance upon responsible products for our future." (ASX: MBT)

Panax Geothermal
Panax Geothermal has commenced its third geothermal project in Indonesia with an agreement to start exploration on the east coast of central Sumatra.

Panax will hold an initial 95 per cent interest in the project under a memorandum of understanding with the government-owned power company PT Petrogas Jambi Power.

Managing director Kerry Parker said Panax and Jambi Power would apply jointly for licences to explore and develop potential geothermal resources of up to 80 megawatts.

"Jambi Power has extensive data and information about the potential geothermal resource, significantly reducing the risk on this project. The relationship will also be integral for ensuring local government and community support," he said.

Energy generated from the proposed project would be connected into the local electricity transmission grid or used for local industry. "There's minimal generating capacity in the region and it's insufficient to meet daily demand. This project could provide reliable power 24 hours a day, seven days a week," said Mr Parker.

"This project will be a strategic addition to our portfolio, increasing Panax's footprint in Indonesia and strengthening our local partnerships."

Panax says Indonesia is a world geothermal "hotspot", with the Government planning to increase generation by 240 per cent in the next four years to more than 4000 megawatts – equivalent to about 12 power stations. As part of its carbon strategy, the Indonesian Government has announced a guaranteed feed-in tariff of $US 97 per megawatt hour to geothermal energy generators – providing investment certainty for renewable energy projects that is not available in Australia.

The National Geological Agency of Indonesia estimates total geothermal potential at about 27,000 megawatts.

Panax's existing projects in Indonesia are signed deals to build two geothermal power stations in Sumatra and Flores with its other Indonesian partner, the Bakrie Group. Panax has commenced discussions with Bakrie Group to participate in another geothermal project in east Java. (ASX: PAX)

Petratherm has welcomed the Federal Government's announced income tax changes to provide tax deductions for geothermal exploration from 1 July 2012. The proposed tax deductibility for geothermal exploration is to encourage greater investment in the geothermal energy sector.

The government said existing income tax law provides an immediate tax deduction for expenditure incurred when exploring or prospecting for minerals, petroleum or quarry minerals. Updating the tax law by extending the definition of exploration, will ensure exploration for geothermal energy receives the same treatment as traditional hydrocarbon energy sources.

"The amendment to the tax law is a win for the geothermal industry in Australia that will help remove barriers to investment in geothermal energy and improve the economics of geothermal exploration," said the Federal Minister for Resources and Energy, Martin Ferguson.

The tax reform will complement the Geothermal Drilling Program (GDP) grants and Renewable Energy Demonstration Program (REDP) grants. In addition, the newly established Australian Centre for Renewable Energy (ACRE) will administer two new schemes, a $100 million Renewable Energy Venture Capital Fund and a $40 million Emerging Renewables Program. (ASX: PTR)

Southern Crown Resources
Southern Crown Resources has renegotiated the binding Heads of Agreement to purchase all the issued capital of Rare Earth International (REI), a company with two advanced rare earth exploration projects and an application over a third historical mining project.

The acquisition was subject to due diligence, with Southern Crown saying it has conducted a "thorough legal due diligence in the three southern African countries where the projects are located, Zambia, Burundi and Mozambique".

As a result, the issue of shares following shareholder approval has been reduced from 8 million to 5 million. The remaining 3 million shares will be issued on the granting of a Prospecting Permit at the Xiluvo project, Mozambique within 12 months of the date of settlement.

At Xiluvo, REI can commence exploration for rare earth minerals under a binding agreement with PROMAC, the owner of the mining permit. In addition REI and PROMAC are registering a local company that will hold a separate prospecting permit over the Xiluvo rare earth prospects. This will give REI a direct interest over the title of the prospecting permit for the rare earth minerals.

Southern Crown will acquire all the shares in REI in exchange for shares and performance shares in Southern Crown.

The performance shares will convert to ordinary shares on the satisfaction of performance hurdles:

- 7 million performance shares when the company has the right to commence exploration on any application submitted by REI within one year of the issue of the performance shares. The only existing application in place is for the Gakara Project in Burundi.

- 7.5 million performance shares when the company has earned its 50 per cent interest in the Nkombwa Project in Zambia within two years of the date of the performance shares.

- 7.5 million performance shares when the company has earned its 85 per cent interest in the Xiluvo Project in Mozambique within two years of the date of the performance shares.

- 15 million performance shares on completion of a positive pre-feasibility study and a resolution by the independent directors of Southern Crown to undertake a full bankable feasibility study on any of REI's projects within three years of the date of the performance shares.

All issued shares will be subject to 12 months escrow.

Southern Crown Resources said the shareholder meeting is now scheduled for the first week of May. (ASX: SWR)

Eco Investor Update





Search Eco Investor