Eco Investor Update

A Weekly News Update for Environmental Investors

16 May 2011 - No 32

ASX 100

Sims Metal Management
Sims Metal Management has continued its long tradition of growth by acquisition with the purchase of Dunn Brothers (1995) Limited, a leading UK metals recycling business.

Dunn is a full-service ferrous and non-ferrous recycler with nine facilities that include a 6,000-horsepower shredder, non-ferrous recovery systems and dock facilities. Its key shredding and nonferrous recycling assets are in Birmingham and these are supported by collection and export infrastructure around the country. The company processes 35,000 tons of scrap metal per month.

Daniel W. Dienst, group chief executive officer, said "The acquisition of Dunn is a testament to our ability to find accretive and franchise enhancing acquisitions. With Dunn, we now operate a shredder facility in the UK's second largest city, while extending our footprint into new, targeted, regional markets."

Graham Davy, chief executive officer of European Metals and Global Sims Recycling Solutions, said "This deal places Sims Metal Management very firmly as a UK national player, present in key regions and offers both the business and post-consumer sectors quality recycling alternatives from our extended suite of metals recycling and electronic recycling services."

Sims said the purchase price is not material. (ASX: SGM)

ASX 200

GWA Group
GWA Group has refinanced its banking facilities with a new $300 million syndicated facility that it said gives it sufficient capital to fund its operations and pursue acquisitions.

The facility comprises a three year $200 million tranche that matures in July 2014 and a five year $100 million tranche maturing in July 2016. GWA's bankers are CBA, ANZ, NAB, WBC and HSBC. (ASX: GWA)

Lynas Corporation
Lynas Corporation has terminated its controversial agreement to sell rights to part of its Mt Weld permit to Forge Resources.

The controversy focused on the conflicted role of Lynas chairman Nicholas Curtis, who is also chairman of Forge Resources and would have received a very substantial benefit if the deal had proceeded.

Lynas said "Extensive engagement with major shareholders seeking feedback on the proposal revealed a strong desire for Lynas at this time to focus on its core strategy of delivering its Rare Earth project in Western Australia and Malaysia."

Forge has agreed to the termination, and each party has been released from liabilities and obligations under the transaction agreements. Lynas will pay Forge compensation of $600,000 plus GST for partial re-imbursement of its direct third party costs.

Lynas said it expects the first feed of ore into the Concentration Plant in Western Australia to commence imminently and the first feed of concentrate into the kiln at the Lynas Advanced Materials Plant (LAMP) in Malaysia is scheduled for September 2011.

The WA Department of Mines and Petroleum, and the WA Department of Environment and Conservation have issued their licences for Lynas to operate the Mount Weld Concentration Plant, completing the regulatory requirements for the commencement of operation at the plant.

However, Bloomberg has reported that Lynas' plant in Malaysia will be scrutinized by the United Nations after Malaysia asked the UN nuclear watchdog to help rule on the project's health risks.

The International Atomic Energy Agency was asked "to organize an independent panel of international experts to review the radiation health and safety aspects of the Lynas project," it said. An investigative mission will visit Malaysia by May 29.

Malaysia has blocked Lynas from importing raw materials while the study examines health and safety concerns over the processing plant and a pre-operating license won't be issued until the independent review is complete.

The plant is due to start operations later this year. (ASX: LYC)

ASX 300

Ceramic Fuel Cells
With Ceramic Fuel Cells' shares trading close to their near two year low of 10 cents, chairman Jeff Harding has topped up his super fund with another 150,000 shares at 11.5 cents each. (ASX: CFU)

Emerging Companies

Energy Developments
Energy Developments has announced a number of "important developments in its US operations which signal the next phase of growth in the company's US clean energy generation business".

The company has appointed Steve Cowman as the new chief executive of its US business, and entered a new 10 year Power Purchase Agreement (PPA) with American Municipal Power (AMP). Starting in 2012 the PPA covers Energy Developments' main landfill gas sites and is for up to 56 MW of current and future expansion generation capacity.

New generation and expansion projects will increase Energy Developments' US generating capacity in the near term by about one-third to around 93 MW.

The Carbon Limestone landfill gas project has been expanded by 3 MW and the installation of gas conditioning equipment, bringing its operating capacity to 22 MW. Energy Developments has commited to a further 3 MW expansion of the project scheduled for completion in mid 2012.

A 13 MW expansion of the Lorain landfill gas project (LFG) is scheduled for completion in mid 2012, and will increase its operating capacity to 24 MW.

A commitment to a 4 MW expansion of the Georgia Taylor County landfill gas project is underpinned by support from Veolia ES Solid Waste, the landfill owner, and Greenpower EMC/ Cowetta Fayette EMC, the electricity off-take buyer. The expansion is scheduled for completion in late 2011.

Managing director, Greg Pritchard, said "ENE has substantial LFG in our US project portfolio and the expansion initiatives we are announcing underscore our capacity to realize the embedded value in the existing asset portfolio."

Energy Developments has also extended for 10 years through to 2039 its landfill gas agreements at its key Ohio sites at Lorain and Carbon Limestone with Republic Services, which owns the landfill.

Mr Pritchard said the company looks forward to exploring further expansions and opportunities at its LFG sites, and "intends to explore other strategic opportunities in the broader clean energy sector in the coming year".

Steve Cowman has 25 years of senior management experience in industry sectors including waste management, bio-energy and renewable energy. Most recently, he was chief executive of Stirling Energy Systems and previously held senior management roles at General Electric, Harris Corporation, Greenstar and Volex Group.

Mr Cowman succeeds Jon R Thomas who is stepping down to pursue other opportunities, having been responsible for leading the US business over the last five years, said the company.

In the past two years, it has installed improved gas conditioning systems at its flagship US LFG sites, and continues to evaluate further expansion opportunities at other key sites. (ASX: ENE)

Micro Cap Companies

Aeris Environmental
Aeris Environmental has appointed Dr David Fisher as managing director. Mr Fisher has 30 years experience in life sciences companies in senior management roles and for the past 10 years has been an active investor in the sector through Brandon Capital Partners, of which he was a founding partner.

Previous to Brandon Capital, he was general manager of Peptech Ltd from inception in 1985 to 1995. During this period, Peptech went from a start-up to having R&D operations in Australia, UK, US and manufacturing operations in Denmark.

Mr Fisher is a director of Nanosonics, Signostics and Global Kinetics Corporation Pty Ltd. He is a past president of the Australian Biotechnology Association and past chairman of the CSIRO's Division of Animal Production Industry Advisory Committee.

Chairman Maurie Stang said Aeris said it is at a pivotal point in its development. "With key prospective partners and customers negotiating alliances with Aeris' "Antimicrobial Smart-Surfaces Technologies," one of David's key responsibilities will be to oversee the successful commercialization conclusion and implementation of these relationships." (ASX: AEI)

Algae.Tec has issued 1 million shares to DMG Media Marketing for marketing and public relations services for six months. The company now has 33.7 million shares on issue. (ASX: AEB)

Shares in AnaeCo has hit a new two year low of 8.2 cents.

Meanwhile, agreement was not reached on the conversion of two director loans to equity within the specified period and the loans revert to their original terms.

However both directors, Ian Campbell and Les Capelli, say they are willing to convert their loans to equity, and the parties are working towards a formula to achieve this. This will
require a further approval by shareholders.

Meanwhile, under the original terms the maturity date for the loans is the earlier of 30 June 2011 and the date on which the company next raises new capital after 31 December 2010, provided that cash flow enables it to safely make the repayment while meeting other commitments.

If the company cannot repay the loan at 30 June, the lender can call for the loan to be extinguished through the issue of shares at the volume weighted average for the five preceding trading days.

The interest rate is 12 per cent per annum. (ASX: ANQ)

Australian Renewable Fuels
Australian Renewable Fuels has welcomed the introduction of a Federal Bill that it says will extend the current arrangements for biofuels for the next 10 years, meaning that locally produced biodiesel will effectively now not be paying excise for the next 10 years while imported product will.

The legislation phases in the taxation arrangements for liquefied petroleum gas (LPG), liquefied natural gas (LNG) and compressed natural gas (CNG) that were first announced by the Howard Government in 2004.

The new tax arrangements will start on 1 December 2011 and phase in over five years, according to the transition set by the former Government in 2004. The phase in will be complete from l July 2015, when the tax will apply on an energy content basis but with a 50 per cent tax discount to recognize the potential environmental, regional development and fuel security benefits of alternative fuel use.

It also includes simplified arrangements for the collection of the excise.

"Australia enjoys the lowest LPG prices in the OECD. By introducing taxation on these fuels we bring Australia into line with the taxation treatment of LPG in most other OECD countries," said assistant treasurer, Bill Shorten.

The current taxation arrangements for renewable fuels, ethanol, biodiesel and renewable diesel, continue for the next 10 years. Methanol will continue to be untaxed. The Government will undertake a review of the taxation and grant arrangements for ethanol, biodiesel, renewable diesel and methanol after 30 June 2021, he said.

In addition, the carbon emissions of alternative fuels will be included in the Government's consideration for fuel under a carbon price.

"The legislation also corrects a legislative anomaly that was wilfully ignored by the former Howard Government that would have seen the relative support to renewable fuel industries
in Australia end overnight on l July 2011," he said.

Australian Renewable Fuels chief executive Tom Engelsman said "This is very encouraging news and a clear indication of Government support for the renewable fuels sector. We envisage Australian Renewable Fuels forming an integral part of the carbon emissions reduction solution going forward." (ASX: ARW)

Carbon Polymers
Carbon Polymers director Colin Grady is to retire from the board and will not be replaced. He remains as company secretary until a replacement is found.

Mr Grady has been on the board for 17 years, making him a link to the period when the company was Nullarbor Holdings. (ASX: CBP)

Carnegie Wave Energy
Carnegie Wave Energy has raised $4 million via a share placement to institutions and sophisticated investors. The funding is for working capital during the company's Demonstration Project phase of its wave energy technology. The raising was at 10 cents per share.

Managing director, Dr Michael Ottaviano, said it is an exciting time for the company and "The continued strong support of the investment community is a testament to the success of the CETO technology development program." (ASX: CWE)

Datamotion Asia Pacific
Rare earths explorer Datamotion Asia Pacific has received the report by independent consultant Southern Geoscience Pty Ltd based on data from the recent gravity survey conducted on the M12 Rare Earth Target at Mt Barrett in WA.

Following a review of all the information on M12, the final drill hole locations will be identified.

The report says "The magnetic model suggests the Mt Barrett feature of interest is associated with an isolated bulb shaped source the appearance and setting of which is consistent with an intrusion. The model also indicates there is a more extensive magnetic unit with similar magnetic properties to the north west. This more extensive unit looks like a stratigraphic unit within the greenstones.

"For targeting of REE mineralisation, the lowest density zone overlying the magnetic source may be more prospective than other parts of the system. A northerly inclined drill hole designed to intersect the low density zone within the modelled magnetic source should provide information on the nature and prospectivity of the possible shear or thrust zone on the northern edge/contact of the magnetic intrusive," it says.

Datamotion Asia Pacific is earning a 70 per cent interest in the project and Oroya Mining Ltd is free carried for 30 per cent to a decision to mine. (ASX: DMN)

Shares in EcoQuest have hit an all time low of 4 cents. The all time high was 21 cents in September 2009.

On 6 May the company received a query from the ASX about its low cash position. For the quarter to 31 March it had receipts from customers of $101,000, net negative operating cash flows of $504,000, and cash of $392,000.

The company said it anticipates an increase in its sales revenue in the June quarter "driven by expansion of Eco Quest's existing customer base, increased marketing activity and promotion as well as through a greater focus on internet sales, whilst continuing to focus on reducing its administration expenses".

The company is also negotiating a placement expected to be completed before the end of the June quarter.

EcoQuest expects to have negative operating cash flows for the June quarter at or around the level for the March quarter, dependent on sales, the timing of payments for the sales and any additional stock produced.

As the company is in the start up phase of sales for Little Takas nappies and wipes, its ability to accurately forecast sales revenue and consumer uptake is limited. "Eco Quest monitors its revenues on a monthly basis and adjusts its sales and marketing expenditure to bring it into line with forecast sales revenue," it said. (ASX: ECQ)

Eden Energy
Eden Energy said its subsidiary Eden Energy India operated profitably over first quarter of 2011, and the sales and marketing of Eden's Optiblend dual fuel system by its Indian and US subsidiaries, Eden Energy India (EEI) and Hythane Co, are continuing to expand rapidly.

Additional sales representatives have been appointed in both countries, and an increasing number of potential orders in India and the US are projected to convert to sales over the next three to six months.

Five Optiblend dual fuel kit have been sold in India since the start of 2011, bringing total Indian sales since 2009 to nine in four cities. The sales cover a variety of makes and sizes of diesel gensets, including Caterpillar, Cummins and MWM, and range in size from 320kva to 1250kva. "In all gensets consistent displacement levels of between 65-70 per cent diesel with natural gas is regularly being achieved, depending upon the load at which it is run " it said.

"The effect of these sales over the past three months is that EEI has operated at a profit for the first time and is budgeting that this will both continue and strengthen as natural gas becomes more widely available in India over the next five years, opening up a potentially very large market for the Optiblend dual fuel kits."

The kits are now manufactured and installed entirely by EEI's Indian staff, without assistance from the US. 80 per cent of the Optiblend components are now sourced in India, giving a significant reduction in the cost of the kits.

The lower cost for Indian kits means Hythane Co is now also procuring some of its parts from EEI in India, increasing Eden Energy's overall return from the Optiblend kit.

"Hythane Co is projecting a significant increase in demand for OptiBlend over the next year," said Eden's executive chairman, Gregory Solomon.

"With its sales representation now stretching across the US, Hythane Company has expanded its reach, including markets in Italy, South America, and Canada. It has also been successful at increasing the density of its US sales coverage, greatly increasing the potential number of sales opportunities and now has a large number of advanced enquiries from a range of industrial customers, power utilities and hospitals in the pipeline, many of which are hoped will convert to sales over the three to six months."

The high price of diesel fuel is also contributing to the increasing interest in displacing diesel fuel with natural gas, he said. (ASX" EDE)

Enerji says construction of its first Opcon Powerbox will be completed in June, and Horizon Power has specified an installation window at its Carnarvon Power Station of September to November 2011.

Chief executive officer, Greg Pennefather, visited Opcon's manufacturing plant in Sweden earlier this month to view construction progress on the six Opcon Powerboxes Enerji has ordered.

Mr Pennefather said construction of two third generation Opcon Powerboxes was close to completion and work on a further two units is underway. Some of the parts for the fifth unit have arrived with assembly due to commence in the coming months.

The first unit will undergo testing in July before being shipped to Australia in August. Transportation to Australia should take six to eight weeks, installation should take between six and nine weeks between September and November.

"With our primary target market remaining remote mine sites and towns that generate their own power, Opcon appreciates the potentially huge marketing opportunity that exists in Australia. I am pleased that Opcon has recently appointed a dedicated representative to provide further support for the Opcon Powerboxes here in Australia," said Mr Pennefather. (ASX: ERJ)

Green Rock Energy
Green Rock and Pacific Hydro are to cooperate in the development of conventional geothermal power projects at Green Rock's North Perth Basin permits in the mid west region of Western Australia and Pacific Hydro's and Green Rock's licences in the Great Artesian Basin in South Australia.

Initial projects of at least 25 MW are contemplated at both Basins with the partners aiming these to lead to hundreds of megawatts of generation from each Basin over the coming decade.

Pacific Hydro is a leading Australian renewable energy company with over $1 billion in assets. It is owned by investment management specialist IFM, which manages over $29 billion in superannuation funds. Pacific Hydro has interests in large scale solar PV, geothermal, hydro and wind energy. Operating projects include the 30 MW Ord hydro scheme, and Victorian and South Australian wind farms with a combined generating capacity of 260 MW.

Discussions between the partners are centred on integrating the Australian conventional geothermal interests of the two companies into a single portfolio, with Green Rock providing exploration and production expertise and leading the marketing of the two projects on an equal footing to potential upstream drilling investors.

Green Rock's managing director Richard Beresford said "We are very excited at being able to attract a power partner of the calibre of Pacific Hydro who shares our belief in the potential of the geothermal resource in Green Rock's North Perth Basin permits and both companies' Great Artesian Basin licences." (ASX: GRK)

Greenearth Energy
Greenearth Energy subsidiary Greenearth Energy Efficiency Pty Ltd has won a contract to provide a smart lighting installation for drinks business Diageo Australia.

The project at Diageo's NSW Huntingwood facility will showcase the benefits of Greenearth Energy Efficiency's Metrolight commercial lighting technology that can ‘harvest' the benefits of daylight in a warehouse and provide significant energy savings.

Modeling suggests energy savings of up to 48 per cent will be achieved through a combination of more efficient equipment, dimming with daylight, and implementation of 'smart' control systems.

Greenearth Energy Efficiency recently announced it is an Accredited Certificate Provider under the NSW Energy Savings Scheme, and has a specific Recognised Energy Savings Activity for its HID lighting upgrades.

As such Greenearth Energy Efficiency is able to create Energy Savings Certificates for the project, creating further value above the energy savings, said Greenearth managing director, Mark Miller. (ASX: GER)

With Intermoco's shares at around their all time low of 0.3 cents, director John Evans has indirectly acquired 2.5 million shares at 0.4 cents each.

The company's shares have trended steadily downwards since June 2003 when they were 7 cents. The all time high was 30.5 cents in January 2003. (ASX: INT)

Liquefied Natural Gas
Liquefied Natural Gas has had the term of its Agreement for Lease with Gladstone Ports Corporation extended for another 12 months. The Agreement is for the site for the company's planned 3 million tonne per annum LNG project at Fisherman's Landing in Queensland.

The Agreement specifies the conditions, including the procurement of gas supply for the LNG Project, required to be satisfied by 31 December 2011, following which LNG's subsidiary Gladstone LNG Pty Ltd will have another six months to satisfy the remaining conditions.

These primarily related to obtaining the necessary approvals to commence construction of the LNG Project. (ASX: LNG)

MediVac has completed production of its first new MetaMizer 240 SSS clinical waste converter, which simultaneously sterilizes and shreds clinical waste on site.

Executive chairman Paul McPherson said "Today is a major milestone in the history of MediVac Limited. The completion of our first new MetaMizer 240 SSS is the culmination of many years of research, development and work. This has culminated in a unique world product for the efficient and environmentally friendly treatment of clinical waste onsite."

The new MetaMizer will now go through a rigorous testing phase including in an in-situ clinical waste setting. Work has commenced on further MetaMizer inventories, ahead of anticipated strong worldwide demand. (ASX: MDV)

Metgasco says a reserves upgrade is pending, as it has completed analysis of the unconventional gas resources in PEL 13 and the data has been provided to the independent reserve certifiers, MHA Petroleum (Denver).

Metgasco expects to recognize first gas reserves in the PEL 13 tenement in the current quarter. PEL 13 is adjacent to the south and west to PEL 16 where Metgasco has established a large 2P reserve position.

"Internal analysis indicates the presence of a significant gas resource within the Walloon Coal Measures in PEL 13," it said.

Shares in Metgasco traded at a two year low of 28.5 cents on 4 May but have recovered slightly to around 32 cents. (ASX: MEL)

Orbital Corporation
Orbital Corporation has moved forward with its Orbital Autogas Systems division having commenced production–level supply of its next generation Liquid Phase Injection (LPi) LPG fuel system components to Ford Australia. The components are for the new range of EcoLPi Falcons that go on sale mid year.

Ford and Orbital have worked since May 2009 to develop and productionize the EcoLPi Falcon's LPi LPG fuel system, which was developed in accordance with Ford's Global Product Development System while also meeting the requirements of the Australian market.

The EcoLPI engine produces 198 kW of power and 409 Nm of torque – more than the regular 4 litre petrol engine using 91RON fuel (195 kW/ 391 Nm), and identical to the power outputs when using premium fuel (95RON), says Orbital.

For the EcoLPi engine, this is a 27 per cent increase in maximum power and a 10 per cent improvement in peak torque compared with the previous generation E-Gas LPG engine that produced 156 kW and 371 Nm.

Ford says preliminary trials on a Falcon EcoLPi sedan point towards an overall fuel efficiency and CO2 emissions improvement potential of 12 to 15 per cent for liquid phase injection technology when compared with the previous E-Gas venturi-style vapour system.

The sedan EcoLPi line-up includes the Falcon XT, G6, G6E and XR6 variants, while EcoLPi on the Falcon Ute extends to XL, R6 and XR6 variants, in both Cab Chassis and Styleside Box body configurations and with distinctive EcoLPi badging.

Orbital Autogas Systems' managing director, Tony Fitzgerald said "The new EcoLPi Falcon is a world class product and a world first for Ford Australia and Orbital. The performance and
driveability is amazing. The Falcon EcoLPi offers exceptional performance coupled with all the space, comfort and towing capability of a family sedan, while at the same time delivering the fuel costs of a much smaller car."

More than 100,000 LPG-powered Falcon vehicles have been produced since a dedicated LPG system was first introduced in mid-2000. (ASX: OEC)

Po Valley Energy
Shares in Po Valley Energy hit an all time low of 19.5 cents on 13 May.

On the same day chairman Graham Bradley told shareholders "Your directors share the disappointment of all shareholders in the poor performance of the Company's share price during 2010 and the setbacks underlying that performance. We believe, however, that our Company is now well placed to realize full value from the Company's assets.

"The Board believes we have in place a small but strong technical and management team in Italy, well matched to the task of moving our most prospective exploration targets from appraisal drilling to production. Our focus over the next 12–24 months will be to do so, in some cases using our own cash resources, and in others in partnership with farm-in co-investors.
"Let me stress that the Company's development and exploration program, our team's capacity to deliver our projects and the Italian gas market are all stronger and more robust than at any time in the Company's history." (ASX: PVE)

RedFlow says it has been granted a significant Australian patent for its "Cell Stack for a Flowing Electrolyte Battery". The patent is also being registered in a number of other countries.

RedFlow's cell stack architecture enables improved robustness and efficiency, and reduced size and weight of flowing electrolyte batteries.

The patent gives a 20 year monopoly to RedFlow including the rights to prevent competitors from making, using and selling flowing electrolyte batteries having a new and inventive battery cell stack architecture in Australia.

Chief executive Phillip Hutchings said RedFlow has other patent applications pending and is continuing to develop barriers around its intellectual property. (ASX: RFX)

SWW Energy
SWW Energy, formerly Solverdi Worldwide, has raised $2.5 million, which it said closed heavily oversubscribed by sophisticated and professional investors.

The company is now working to satisfy the final conditions for its relisting, which it hopes to achieve in the next two weeks or so. (ASX: SWW)

International Companies

Ocean Power Technologies
Ocean Power Technologies has commenced ocean trials of the first of its new generation PB150 utility-scale PowerBuoy device. The PB150 is the largest and most powerful wave power device designed by OPT to date, with a peak-rated power output of 150 kilowatts - equivalent to the energy consumption of 150 homes.

The ocean trials are being conducted about 33 nautical miles from Invergordon, off Scotland's northeast coast, and are expected to last up to three months. A broad range of operations and functional tests are being performed, examining the response of the PowerBuoy's structure and mooring system to the waves and the power produced by the on-board generator.

A wave data buoy near the site provides detailed information regarding incoming waves. Data collected during the trials is transmitted in real-time for analysis by OPT's engineers in the UK and the US.

The power produced to date has been as planned, and is consistent with the test protocols and OPT's predictive models for the wave environment experienced. On-board equipment duplicates grid-connection conditions to ensure the buoy's electrical systems are subject to full operational testing for utility applications.

The Company is seeking a customer for the commercial utilization of the buoy after the ocean trial phase is completed, including its possible deployment at various potential sites.

A second PB150 is under construction in the US for an anticipated utility-scale project in Oregon, and planned projects in North America, Australia, Japan and Europe will also utilize the PB150 PowerBuoy.

Charles F. Dunleavy, chief executive officer of OPT, said the sea-trials are progressing well and, OPT now has two PowerBuoys operating in separate oceans: a grid-connected PowerBuoy in Hawaii, and the one in Scotland.

"With the construction of the second PB150 PowerBuoy, to be deployed in Reedsport, Oregon, our goal to make wave power an economically-viable source of renewable energy continues to gain momentum," he said. (Nasdaq: OPTT)

Eco Investor Update





Search Eco Investor