Eco Investor Update

A Weekly News Update for Environmental Investors

16 January 2012 - No 63

____ Core Securities ____

ASX 100

APA Group
APA Group is to expand the capacity of its Goldfields Gas Pipeline in WA to meet demand from the Pilbara mining sector.

The expansion is underpinned by a new 20-year gas transportation agreement with Rio Tinto.

Managing director Mick McCormack said "This is our third expansion in the last three years, and given the developments in the region, we don't expect it to be the last. All of these expansions have been underpinned by contracts and are further proof of the growth prospects that APA has in a market with increasing demand for natural gas."

The expansion will deliver an additional 20 terajoules per day, an increase of 13 per cent on current capacity. Construction is scheduled to be completed in mid 2013.

APA owns 88.2 per cent of the pipeline through the Goldfields Gas Transmission Joint Venture. (ASX: APA)

DUET Group
DUET Group subsidiary United Energy could be $80 million better off with the final decision of the Australian Competition Tribunal (ACT) regarding United Energy's appeal of the Australian Energy Regulator's final decision over its Electricity Distribution Price Review (EDPR) for 2011 to 2015.

David Bartholomew, DUET's chief executive officer, said "This decision is expected to increase United Energy's revenue by a total of approximately $80 million over the 2013-15 period and, in light of the regulator's proposals to amend the National Electricity Rules, demonstrates the importance of the merits appeal process in the Australian regulatory framework".

Another DUET subsidiary, Dampier to Bunbury Natural Gas Pipeline (DBP) has closed a $235 million five-year bank debt facility to refinance bonds maturing in April 2012.

DUET's chief financial officer, Jason Conroy, said "On completion of this transaction, there are no term debt maturities for the DUET Group until the second quarter of 2013."

The Economic Regulation Authority (ERA) of WA has approved revisions to the Access Arrangement for DBP that give effect to the ERA's final decision on 31 October

DBP said it will review the ERA's revised Access Arrangement with a view to initiating a possible appeal before the Australian Competition Tribunal.

Duncan Sutherland, a director of DUET responsible entity, has indirectly sold 50,00 securities for $1.76 each.

AMP has reduced its holding from 13.87 to 12.82 per cent. (ASX: DUE)

Sims Metal Management
Legg Mason Asset Management is no longer a substantial shareholder in Sims Metal Management.

Sims has now bought back over 1.98 million shares for a cost of $25.5 million. (ASX: SGM)

ASX 200

Envestra's securities reached a new three year high of 74.5 cents on 10 January. This follows a steady rise over the three year period.

Two days later the Australian Competition Tribunal upheld parts of Envestra's appeal over pricing for South Australian and Queensland access arrangements. The decision is expected to add $80 million to its revenue over the period to June 2016. (ASX: ENV)

Hastings Diversified Utilities Fund
Would be acquirer, APA Group, has criticized the $30.7 million performance fee by Hastings Diversified Utilities Fund to its responsible entity, Hastings Funds Management (HFM), saying it highlights the need for new ownership.

APA said HDF will have paid more than $110 million in performance and management fees to HFM since listing in 2004. This is more than 30 per cent of total distributions to security holders in the same period.

APA managing director Mick McCormack said "Under APA's internally managed model, security holders benefit from APA's performance, not an external manager."

HDF will pay HFM $30.7 million in cash for the six months to December 31, excluding the payment of another $23.3 million which has been deferred as it is based on APA's takeover offer. Since APA's takeover offer in early December, HDF's security price has risen from $1.77 to $2.05 on December 30, the final day for the fee's calculation. This rise means HFM is entitled to a fee of $54 million, while the $30.7 million is based on HDF's performance to December 14.

"It should also be of serious concern to all security holders that HFM has taken the performance fee in cash, not in scrip at the original listing price of $2.56, as it has previously done," said Mr McCormack.

"The $30.7 million cash payment is greater than the $26.5 million of distributions to be paid to HDF security holders for the corresponding six-month period to December 31. This comes in a year that distributions to shareholders were cut from 12 cents per share to 10 cents per share."

HDF said that during the financial year ended 31 December 2011, HDF achieved above average returns against key market indicators. Its market capitalisation rose from $876 million to $1,087 million, which together with distributions in the same period resulted in an increase in security holder value of $266 million.

"A review of HDF's performance by Mercer (Australia) Pty Ltd shows that the total return security holders who participated in all rights and reinvestment opportunities would have achieved, has been 12.46 per cent per annum since inception and 34.25 per cent since a performance fee last became payable as at 30 June 2011."

This compares favourably to the benchmark ASX/ S&P 200 Industrials Accumulation Index which rose 4.06 per cent since HDF's inception and fell 4.01 per cent since 1 July 2011. (ASX: HDF)

ASX 300

Toxfree Solutions
IOOF Holdings, through Perennial Investment partners, has increased its stake in Toxfree Solutions from 11.4 to 12.9 per cent. (ASX: TOX)

Emerging Companies

Gale Pacific
Shares in Gale Pacific hit a three year high of 27 cents on 3 January. The three year low at the start of the period in March 2009 was 3.5 cents.

Gale Pacific expects net profit after tax for the half year to 31 December 2011 to be about $4 million, an 11 per cent increase on the previous corresponding result of $3.6 million.

The previous $3.6 million included a non-recurring $0.5 million tax benefit, and that once adjusted, the expected results for the 31 December 2011 half-year period are improved significantly on a like-for-like basis, it said.

Sales for the December half are forecast to increase by 20 per cent over the prior corresponding period, said chief executive, Peter McDonald. (ASX: GAP)

Shares in SteriHealth are trading at close to their one year low of $1.25 recorded on 29 December. (ASX: STP)

Interest Rate Securities

Transpacific SPS
The security price of Transpacific's SPS reached a new three year high of $79.11 on 12 January. The three year low was $35.02 in February 2009.

Michael Britton, a director of the responsible entity for Transpacific SPS, has resigned. (ASX: TPA)

Unlisted Funds

Climate Advocacy Fund
Australian Ethical Investment said it continues to review several companies for climate change related advocacy in early 2012 and will advise investors in due course.

Over the month of November, the Fund fell 5.1 per cent, underperforming the benchmark S&P/ ASX 200 index which fell 3.5 per cent.

Amongst the larger detractors from performance was an overweighting to Bluescope Steel, which fell 46.9 per cent after the company undertook a heavily discounted capital raising. The negativity caused a contagion effect on fellow steelmaker OneSteel, in which the fund is also overweight, which fell 32.9 per cent.

Performance was gained from being overweight in defensive stocks such as Telstra, Woolworths, Westfield and Crown.

____ Satellite Securities ____

ASX 200

Transpacific Industries Group
Transpacific Industries' former chairman, Terry Peabody, has launched legal action against Transpacific claiming total damages of $4.6 million plus interest and costs. The proceedings arise out of Transpacific's Institutional Shortfall Bookbuild in October 2011, and allege that the company breached its contracts with, and its duties owed, to the Peabody entities.

Transpacific said it denies any liability and will defend the proceedings vigorously. (ASX: TPI)

ASX 300

Infigen Energy
Five of the US wind farm project companies in which Infigen Energy holds Class B membership interests and Gamesa Wind US LLC, the turbine supplier to those projects, are pursuing legal action against each other.

Kumeyaay Wind LLC (Kumeyaay) has a long running dispute with Gamesa regarding liability to pay for site repairs and the replacement of all 75 turbine blades at the Kumeyaay wind farm in California following a storm and utility power outage in December 2009.

Kumeyaay says the repair costs and production losses are covered by Gamesa's turbine manufacturer's warranty or, if not, then by Kumeyaay's property damage and business interruption insurance. Despite numerous attempts Kumeyaay and Gamesa have been unable to resolve the warranty matter.

Gamesa has now invoiced Kumeyaay and filed claims against Kumeyaay for US$34.5 million for the repair work. Kumeyaay is contesting Gamesa's claim.

Infigen said that if it is ultimately determined that the repairs are not covered by Gamesa's warranties, then Kumeyaay will pursue its insurer for the costs of the repairs and the lost production.

Kumeyaay is also pursuing other warranty related claims against Gamesa totaling US$10.3 million.

Four other US project companies with Gamesa turbines at the Allegheny, GSG, Bear Creek and Mendota Hills wind farms are pursuing claims against Gamesa over, among other matters, Gamesa's failure to (i) complete some end of warranty work, (ii) pay some liquidated damages associated with turbine availability warranties, and (iii) pay for production losses associated with the end of warranty work. The claims total US$16.6 million.

Gamesa has filed its own claims against the four US project companies totaling US$2.2 million.

Infigen said that the US project companies that own the Allegheny, GSG and Bear Creek wind farms also consider that the blades on Gamesa's G87 turbines at these wind farms suffer from design and manufacturing defects which make the blades susceptible to failure potentially well in advance of their design life. The project companies are seeking compensation from Gamesa for the cost of replacing those blades.

If the blade defect claims are successful, the Allegheny, GSG and Bear Creek wind farms will not be faced with the probable costs of premature blade replacement from this cause. The future cost of blade failures at Allegheny, GSG and Bear Creek will otherwise depend on future failure rates and timing, blade and rotor replacement costs, and the cost of lost production.

Infigen said it estimates the adverse effect on future cash distributions from its US business would be in the order of US$2.5 million per annum in 2011 dollar terms if the Allegheny, GSG and Bear Creek blade defect claims against Gamesa do not succeed.

Infigen received cash distributions of US$85.3 million from its US business in 2010-11.

All five US project companies are seeking a court ruling that the disputes be submitted to an independent engineer for binding determination in accordance with dispute resolution provisions in the turbine supply documentation.

Meanwhile, the Children's Investment Fund Management continues to creep up Infigen's security register and now holds 29.6 per cent. (ASX: IFN)

Emerging Companies

CBD Energy
CBD Energy Limited has invested $1 million in Nasdaq listed Westinghouse Solar, Inc., a US based designer and manufacturer of solar power systems. The companies have also agreed to explore a technology license agreement or other joint business development efforts in the US and elsewhere.

"In the competitive markets for solar installations, it is critical to offer products and services that stand out," said CBD chief executive, Gerry McGowan. "Westinghouse Solar's integrated AC and DC designs are quite innovative, and could reduce installed costs for many of our customers and business partners in Australia, Europe and elsewhere."

"CBD Energy is rapidly growing its business in the solar sector in Australia and other markets not currently served by Westinghouse Solar," said Barry Cinnamon, chief executive of Westinghouse Solar. "Cooperation with CBD will help both companies extend technology and distribution on a larger international scale."

CBD funded the investment with the issue of 16.6 million convertible notes that pay 12 per cent per annum interest, have a conversion price of 12 cents, and mature on 30 December 2012.

Chardan Capital Markets and Cantor Fitzgerald were co-placement agents for CBD's investment in Westinghouse Solar.

CBD director James Anderson has reverted to the role of non-executive director of the following a period of acting as executive director – finance. He remains chairman of the Audit Committee. (ASX: CBD)

CMA Corporation
CMA Corporation has finalized new finance facilities from Stemcor Trade Finance Limited and GE Commercial Corporation (Australia) Pty Limited as foreshadowed on 17 November.

CMA has entered binding agreements with Stemcor and GE Commercial for the new facilities; and repaid its existing Australian secured debt facilities with proceeds from the new facilities and the recent equity raising.

Chairman, Parag-Johannes Bhatt, said "We are very pleased to have finalized the restructure and refinancing of CMA's secured debt, which follows CMA's recent recapitalization. The Board believes the new facilities will support CMA's plans for continuing improvements to our operating performance.

"In particular, the new working capital facilities will position us to start ramping up our scrap metal purchases. This will build on the measures already taken to reduce overheads, rationalize loss-making activities and improve the efficiency of our workforce and inventory management." (ASX: CMV)

CO2 Group
CO2 Group chief executive Andrew Grant has sold 722,222 shares off market for $130.000. The average price was 18 cents. (ASX: COZ)

DoloMatrix International
The independent expert Lonergan Edwards says the takeover of DoloMatrix International by Toxfree Solutions is fair and reasonable. Lonergan Edwards values DoloMatrix at between $56.3 million and $64.5 million. Toxfree is paying $58 million.

Transpacific Industries Group holds 22.7 per cent of DoloMatrix as part of a 2008 offer for the company. (ASX: DMX)

ERM Power
Alcoa has made the first pre-payment of $5 million to the EP 389 Joint Venture managed by Empire Oil & Gas NL and of which ERM Power is a member.

The Joint Venture partners are selling Alcoa 15,000 terajoules of gas in two tranches from the Gingin West and Red Gully Gasfields in WA.

The first Tranche consists of the Forward Gas Sales component where Alcoa will pay $25 million. These funds will be used to construct the Red Gully Gas and Condensate Plant, the connecting pipeline to the Dampier to Bunbury Natural Gas Pipeline and the associated production facilities.

The second tranche is a normal Gas Supply Agreement (GSA).

The first pre-payment of $5 million confirms Alcoa's commitment to the GSA and the construction and commencement of the Red Gully Gas Plant.

ERM and partner Empire Oil & Gas have settled Native Title Agreements that should lead to them being granted exploration rights for coal seam gas and shale gas at a prospect in WA. The petroleum permit application made in 2008 is to explore the potential for natural gas accumulations in the South Perth Basin.

Elsewhere, a proposed refinancing and capital reduction of Oakey Power Station ownership will see a cancellation of Contact Energy's 25 per cent interest, and ERM Power's interest rise from 62.5 to 83.3 per cent. The refinance and capital reduction is subject to approval by OPH shareholders this month.

Director Trevor St Baker has indirectly acquired 84,604 shares for $127,052, an average price of $1.50. (ASX: EPW)

Hydromet Corporation
Hydromet Corporation managing director Greg Wrightson is retiring from the position after 18 years of service with the company. He will stay on as a consultant.

Executive chairman Dr Lakshman Jayaweera is now also the new managing director.

Directors said they expect that the pre-tax loss for the first half will be between $2.5 million to $3 million. Most of the losses were in the December quarter, and due to exceptionally high used battery (ULAB) prices, a sharp fall in the lead price on the London Metal Exchange in the last four months, the strong Australian dollar, and poor smelter return for the company's lead products.

The ULAB operation processed 18,000 tonnes of used batteries and generated 10,350 tonnes of lead over the six month period.

Hydromet said it is in discussion with its major customers regarding profitable ways of maintaining production of lead products for which they have a constant demand. "This may involve our major customer supporting HydroMet either by assisting in feed purchase price combined with toll treatment fee basis or by improving our smelter return to overcome these current issues. Discussions have also commenced with our long term customer to form a potential alliance in HydroMet's lead recycling activities," said the company.

On the feed side, HydroMet is in discussion with some ULAB suppliers who are also lead end-users to offer them a collection network for used batteries and to provide finished lead products through am associated company in China which is also one HydroMet's major shareholders.

Directors said they expect further improvement to the ULAB operation to reduce costs per tonne of lead produced, and are hopeful of a positive second half for the lead recycling business.

The company's selenium business at Tomago "has performed very well with healthy earnings and we are hopeful of finding more sources of feed stock supply in 2012".

HydroMet is looking at ways to reduce its reliance on world metal prices, and last month announced it is to acquire a major interest in PGM, a leading electronic waste recycler. The acquisition is subject to shareholders' approval.

The company is considering installing a smelter furnace for the combined smelting of CRT glass generated from E-waste and lead oxide paste. Under this option a furnace and plant can be established with minimum capital and would generate new lead feed units based on treatment fees which would enhance ULAB revenues and profitability, said Dr Jayaweera.

Simon Henry has become a substantial shareholder with a 10.6 per cent interest. (ASX: HMC)

Novarise Renewable Resources International
Novarise executive chairman and managing director, Qingyue Su, has acquired 250,000 shares at 18 cents each. (ASX: NOE)

Solco's shares have fallen to a two year low of 5.2 cents. The two year high, at the start of the period, was 12.4 cents. (ASX: SOO)

____ Pre-Profit Securities ____

ASX 300

Ceramic Fuel Cells
Shares in Ceramic Fuel Cells touched a one year low of 9.5 cents on 20 December.

Director Janine Hoey has acquired 100,000 shares at 10.5 cents each. (ASX: CFU)

Micro Cap Companies

Aeris Environmental
Aeris Environmental said it anticipates entering a memorandum of understanding or a commercial agreement this quarter with a major international corporation to accelerate the roll out of its microbial control technologies.

The first commercial plant trial coating air conditioning coils using the novel AerisCoat R system has been successfully undertaken with an international HVAC corporation, said managing director David Fisher. The trials validated the faster production process and full compatibility with existing production methods. The market potential for sales of the new coatings is very significant and has applicability across a range of industries, he said.

One of the AerisGuard distributors has gained a contract in the WA mining sector for the treatment and maintenance of over 4,000 dwellings with the complete AerisGuard HVAC system. The client is a global mining group. (ASX: AEI)

Carbon Conscious
Carbon Conscious has forecast that its net profit after tax will rise 309 per cent to $3.5 million for the year to June 2012.

This would represent earnings per share of 4 cents, based on forecast sales revenue of $16 million for 2012.

The forecasts are based on the expectation that Carbon Conscious will complete its 2012 planting program of 10,000 hectares to sequester carbon and claim carbon credits. The 2012 planting program is fully supported by Origin Energy's recent exercise of planting options.

The company is targeting planting programs of 20,000 hectares in 2013 and 30,000 hectares in 2014. On achieving these targets Carbon Conscious should achieve a $14 million and $23 million net profit respectively, resulting in earnings per share of 16 cents in 2013 and 26 cents in 2014.

Carbon Conscious has $9.4 million in cash.

The company closed its rights issue with a substantial shortfall that it now trying to place. Chief executive Peter Balsarini and executive chairman Stephen Lowe both participated in the rights issue.

Director Kent Hunter has indirectly acquired 62,430 shares at 23.5 cents each. (ASX: CCF)

Clean Seas Tuna
Clean Seas Tuna shares hit an all time low of 7 cents on 22 December 2011.

Since then the company has announced the appointment of Dr Craig Foster as chief executive officer.

Clean Seas said Dr Foster is well known to the international aquaculture industry and for the past four years has been independent chairman of Clean Seas Tuna Research Management Advisory Group, which includes research providers, the Australian Seafood Cooperation Research Centre and Australian Fisheries Research and Development Cooperation.

These support the technological progress of Clean Seas Tuna's Bluefin lifecycle project.

Dr Foster has intimate knowledge of Australian aquaculture, research abilities and disciplines, plus finfish cultivation, said Clean Seas. In his 24-year aquaculture career, he has managed the research and development for Tasmania's largest salmon hatchery, worked at Australia's pre-eminent fish feed manufacturer, Gibson's Ltd and became managing director when Gibson's was purchased by the world's largest aquaculture feed supplier, Dutch-listed company Nutreco Limited.

In 2005 Dr Foster became the vice chair of the National Aquaculture Council of Australia and chairman in 2008 until 2011. (ASX: CSS)

Hydrotech International
Hydrotech subsidiary, Hydrotech Waterproofing Solutions, has won the Tunnel Sprayed Waterproofing contract for Hong Kong's Mass Transit Railway (MTR) West Island Line Project 705.

The 705 project is part of a 3 kilometre extension of the 13 kilometre Island Line in Hong Kong and is expected to be completed in 2014.

Hydrotech's Tunnel Lining System is for several sections of the overrun tunnels where conventional systems of preformed membranes and concrete linings are considered impractical and uneconomical.

The contract is worth $165,000. Hydrotech's system was chosen because of its superior application characteristics, speed of application and its insensitivity to moisture, said the company.

Over the past five years there has been a trend towards the use of spray applied waterproofing membranes to replace traditional preformed PVC and other systems as tunnel waterproof lining.

The 705 Project is believed to be the first underground rail project to use a Pure Polyurea system as its primary waterproof lining system. As a result several other clients undertaking tunnel construction projects in Hong Kong have approached Hydrotech requesting more information, said chairman Philip Gray. (ASX: HTI)

La Jolla Cove Investors has converted 22,727,273 notes into Intermoco shares at an issue price of 0.11 cents per share. (ASX: INT)

Nanosonics has appointed Dr Ronald Weinberger as managing director and chief executive officer. Dr Weinberger has been interim CEO since May 2011. Dr Weinberger joined the company in August 2004 and was appointed executive director in July 2008. (ASX: NAN)

Po Valley Energy
Hunter Hall Investment Management has increased its holding in Po Valley Energy from 15.4 per cent to 17.1 per cent. (ASX: PVE)

RedFlow chairman Peter Pursey has retired as a director of the company due to a change in his personal circumstances. The board said it will elect a new chairman at its next meeting. (ASX: RFX)

Shares in Vmoto fell to an all time low of 1.1 cent on 4 January. No news accompanied the fall, which has been part of a long term trend.

The sell down may be partly explained by two former substantial shareholders either selling down or selling out of the company. Both had requested shareholder meetings to remove directors but these unsuccessful.

The latest list of top shareholders shows that RiverPark, which until recently held 6.4 per cent of the equity, now holds 1.5 per cent. Absolute Capital, which held 5.4 per cent, does not appear in the latest top 20 shareholders.

Meanwhile, directors have been buying. Yiting (Charles) Chen has indirectly acquired 1 million shares at 1.2 cents each and before that another 1 million at 1.39 cents each. Olly Cairns has indirectly acquired 2 million shares at 1.2 cents each. (ASX: VMT)

WestSide Corporation
WestSide Corporation and joint venture partner Mitsui E&P Australia have entered into a flexible gas market swap agreement to help fulfil existing commitments from the Meridian SeamGas business.

The agreement with an unnamed but "leading" market participant.

Under the agreement, WestSide will purchase gas to help meet demand from existing customers supplied by Meridian SeamGas. WestSide will later sell the same volume of gas back to the supplier by the end of 2015.

Chief executive officer Dr Julie Beeby said the agreement enables the Meridian SeamGas joint venturers to fast track access to gas to help meet two sales contracts to supply an aggregate total of 25 Terajoules a day.

"By bringing forward this capacity to meet our gas sales commitments, WestSide is also positioned to reduce the payment of remedies factored into the price the company originally paid for its 51 per cent interest in Meridian SeamGas," she said. (ASX: WCL)

____ Pre-Revenue Securities ____

ASX 200

Dart Energy
Dart Energy continues to work towards the spin off of its international assets with a restructure of its global assets into three regional groups and the appointment of key executives and directors for the spin off company.

In December Dart Energy and BG Group agreed to restructure their European business arrangements. Dart will receive BG's 50 per cent interest in 14 UK onshore coal bed methane (CBM) licence areas, increasing Dart's interest in each to 100 per cent. Dart already holds the other 50 per cent and is operator.

As consideration, Dart will assume the remaining exploration drilling obligations on these licence areas and will drill up to 11 wells before June 2014.

Dart and BG Group have also agreed Heads of Terms for a Gas Sales Agreement for the future sale to BG Group of gas from the UK licence areas being transferred to Dart.

Dart also has a three month option to acquire for no additional consideration a 100 per cent interest in two licences in Germany (Saxon I and Saxon II) currently held by BG Group and which are prospective for CBM and shale gas.

A first shale gas exploration well on the PEDL 133 licence area in Scotland will be drilled during 2012. Dart has a 100 per cent interest in PEDL 133 CBM, and Dart and BG Group are 49/ 51 per cent partners in the deeper PEDL 133 shale, with Dart as operator. Shale gas exploration drilling at PEDL 133 will commence in 2012.

With 100 per cent owner of all of its UK CBM Licenses, Dart will have the ability to accelerate activity across the portfolio. Dart's net acreage increases to 1,720 square kilometres, and its net UK prospective resource will double to 5.2 trillion cubic feet.

Dart quickly followed this news by announcing that its subsidiary, Dart Energy (CBM) International Pte Limited, is to acquire all the unconventional gas assets of Greenpark Energy Limited - 22 onshore licences in the UK.

Consideration is $42 million in two tranches, and is made up of a mixture of cash and shares in either the intended-to-be-listed Dart Energy International vehicle or Dart Energy itself.

Dart said the assets are substantially complementary to its acreage in the UK, with a similar footprint, similar CBM and shale potential, a sizeable certified 2C resource base and an early stage development option.

Dart has also secured an exclusive option over Greenpark interests in licences prospective for CBM and shale gas in Poland and Spain.

Dart's European business now incorporates:
- A sizeable portfolio of licences in the UK and across Europe, prospective for CBM and shale gas;
- A substantial resource base including a large 2C resource position and initial 3P and 2P reserves (all independently certified);
- Several projects capable of being fast-tracked to commercial development; and
- Monetization options in place, with more expected over the next 12-18 months.

Dart intends to manage the European operations as two business lines: Dart Europe, which will focus on the CBM assets across Europe, and Dart International Shale, which will focus exclusively on progressing the sizeable portfolio of shale assets Dart has either secured or has under option in Europe. This will also include seeking to participate in early-stage shale gas opportunities in Dart's other markets of China, India and Indonesia, where Governments have flagged potential shale licence rounds in the coming 12-18 months.

Dart said its global activity now consists of thee substantial regional business, each with significant acreage, scale of operations and near-term production potential. These are:

- Dart Australia - seven CBM assets covering 23,598 square kilometres in NSW, with a focus on expanding geographically and into other unconventional areas;

- Dart Asia - eight assets covering 7,580 square kilometres focused on Dart's CBM business in China, India and Indonesia, with a strong pipeline of development opportunities;

- Dart Europe: 41 assets in eight regional "clusters" covering 6,017 square kilometres and focused on Dart's CBM business in the UK and continental Europe. This now includes a potentially substantial shale gas acreage position.

Dart Asia and Dart Europe including Dart International Shale will comprise the suite of businesses that are aggregated as Dart Energy International, for which the company has said it intends to seek a separate international listing.

Dart executive chairman Nick Davies said "The agreement to acquire Greenpark's unconventional gas assets in the UK and Europe is the next significant step in realizing Dart's European aspirations, and allows us to now definitively say that we have created one of Europe's leading unconventional gas businesses, less than a year after first entering the

In early January John McGoldrick was appointed chief executive of Dart Energy (CBM) International Pte Ltd. Mr McGoldrick is a chemical engineer with 32 years experience in the upstream oil and gas business. He has worked in the UK, France, Ireland and the USA. He is currently non-executive chairman of Texas based Caza Oil & Gas Inc.

Mr Davies said Mr McGoldrick's extensive leadership experience with Enterprise Oil, his more recent experience of leading a start-up company through dual IPO processes, together with his board experience will be invaluable in leading Dart Energy International through its proposed corporate restructuring.

Two independent non-executive directors have been appointed to the board of Dart Energy International. These are former government minister Raymond Lim and ex-banker Sanjiv Misra.

Mr Lim is a Member of the Singapore Parliament and has extensive experience in the public sector and the finance industry. He sits on the board of the Government of Singapore Investment Corporation (GIC) and was recently appointed senior adviser to the Swire Group and independent director at fund manager APS Asset Management.

Mr Misra is also a Singapore citizen and for 10 years worked at Goldman Sachs in New York and Asia, and became Head of Citigroup's Asia Pacific corporate and investment banking businesses. He is president of boutique consultant Phoenix Advisers, and a senior advisor to Apollo Management. He is also on the Board of Trustees at Singapore Management University and is a member of the Board at National University Health System (NUHS).

Shares in Dart Energy hit an all time low of 35 cents on 20 December 2011 and despite all the activity have only marginally recovered to the mid 40 cent range. (ASX: DTE)

Lynas Corporation
The Malaysian Atomic Energy Licensing Board (AELB) will meet on January 30 to decide whether to grant a temporary licence for Lynas Corporation's Advanced Material Plant (LAMP) in Malaysia. The temporary licence has been referred to as the "pre-operating licence".

The AELB is now receiving public comment on the temporary licence, which includes a detailed waste management plan and safety case.

A temporary licence will allow Lynas to commission the LAMP and progressively ramp up the plant to nameplate capacity and sell its products.

A temporary licence lasts for two years. If it is granted, and if Lynas complies with its requirements, a permanent operating licence can be issued within the two years

Executive chairman, Nicholas Curtis, said "The Malaysian regulatory authorities have put in place a comprehensive process to monitor and evaluate our compliance with the highest international standards and our responsibility to operate the plant in a safe and sustainable manner. Lynas maintains a deep commitment to the communities in which it operates as well as ongoing communication with interested parties to reinforce the facts about the safety of the LAMP."

In Australia, Lynas has awarded Forge Group a $36 million contract to double the capacity of its Mt Weld Rare Earths Concentration Plant from 120,000 to 240,000 tonnes per annum. (ASX: LYC)

ASX 300

Galaxy Resources
Galaxy Resources has completed its third shipment of spodumene to China. The product totaled 31,000 tonnes and will be feedstock for the start up of the Jiangsu Lithium Carbonate Project. (ASX: GXY)

Micro Cap Companies

Algae.Tec‘s shares have jumped to a six month high of 60 cents following two recent news announcements.

In late December the company and European airline Lufthansa signed a Memorandum of Understanding to evaluate the potential for oil from Algae.Tec's bio-reactors to be developed into a sustainable source of aviation biofuels.

In mid January Algae.Tec announced a fourfold expansion of its centre in Atlanta to scale up commercial production. The centre makes the company's bioreactors that produce algae oil.

La Jolla Cove Investors has converted 271,233 notes into shares at 36.87 cents each. (ASX: AEB)

Carnegie Wave Energy
Carnegie Wave Energy's share purchase plan was oversubscribed and raised $6 million. The company had planned to raise $4 million and up to $2 million in oversubscriptions. The shares were issued at 5 cents each.

Managing director, Dr Michael Ottaviano, said "We're delighted by the strong and enthusiastic response of our shareholders, which has once again exceeded our expectations during difficult market conditions. With the fund raising closed, the company is now focused on putting into action its plans for 2012."

The funds will be used for working capital during the commercial demonstration project phase.

Several directors including Dr Ottaviano, Grant Mooney, Jeffrey Harding and Greg Bourne participated in the share purchase plan.

In operational news, Carnegie has completed the basis of the detailed design for its Perth Wave Energy Project at Garden Island. The Perth Project includes the CETO units, offshore foundations, pipelines, onshore power generation facility and grid connection. A video animation of the design is at Carnegie's website.

The 5 MW Project will be delivered in two separate stages. The first stage will have a peak rated capacity of 2 MW followed by a second stage of 3 MW. Carnegie said staged delivery allows it to demonstrate system integration, grid-connection and to deliver first power revenues in less time and with significantly less capital than a stand-alone 5 MW single stage.

Completion of the basis of detailed design triggered a $145,000 milestone completion payment under Carnegie's grant with the WA Government. Carnegie has now drawn down approximately $2.8 million of the $12.5 million grant with the outstanding amount available for draw down over the remainder of the 5 MW project.

The completion of the milestone allows the Project to progress to the final stage of detailed design.

Carnegie said the Perth Project is the most advanced wave power project in Australia and one of a small number of project options it is considering globally as the location for its first commercial demonstration project.

Carnegie's first grid-connected commercial demonstration project will deliver the company its first project revenue through the sale of electricity.

In Ireland, Carnegie has applied for a Foreshore Licence to continue investigations for a proposed 5 MW CETO commercial demonstration project offshore from County Clare.

Its Irish subsidiary CETO Wave Energy Ireland (CWE Ireland) recently completed a detailed site evaluation and conceptual design study which identified two potential near-shore sites for further development.

CWE Ireland has now applied to the Department of Environment, Heritage and Local Government for a Foreshore Licence covering an area between Freagh Point and Spanish Point.

Carnegie executive director, Kieran O'Brien, said "Securing a Foreshore Licence over the Clare site will provide Carnegie with the confidence to invest the time and resources to further develop the Project through environmental surveys and detailed engineering. Carnegie is pleased to be one of the few local organizations currently leading the development and introduction of ocean energy in Ireland."

Canaccord BGF, the Australian partner of global capital markets group Canaccord Financial Inc., has commenced coverage of Carnegie. It has given it a target share price of 12 cents.

Director John Leggate has acquired an initial 100,000 shares at 5.3 cents each. (ASX: CWE)

Cell Aquaculture
Shares in Cell Aquaculture hit an all time low of 3.3 cents on 20 December, two days before they were voluntarily suspended pending a capital raising announcement. (ASX: CAQ)

Shares in Dyesol fell to a five year low of 25.5 cents on 19 December.

Chairman Richard Caldwell has bought 110,000 shares at 27.4 cents each. (ASX: DYE)

Earth Heat Resources
Earth Heat Resources has released its annual report for the year ending 30 September 2011. The loss for the year was $1.5 million.

Chairman Dr Raymond Shaw said 2010-11 was a year of consolidation and 2011-12 will see further consolidation as the company continues to de-risk its projects both technically and financially, and moves closer to initial production at Copahue in Argentina. (ASX: EHR)

Shares in EcoQuest are trading at their all time of low of 0.5 cents.

Directors said they are close to acquiring an eco technology and intend to relaunch the Little Takas biodegradable nappy business in 2012.

Restructuring of the staff of Little Takas has been completed. Current inventory is being sold progressively. Manufacture and supply arrangements are being re­ negotiated. New distribution channels are being examined, including export market opportunities.

On the acquisition front, the company is in negotiations with a party to acquire an eco-technology product. The Board's intention is to pursue a number of eco-technology acquisitions so that the company can build a stable of eco products, said acting managing director, Darren Olney-Fraser. (ASX: ECQ)

Clean power company Enerji has commenced trading on the OTCQX market in the US under the code ENJLY.

The main benefit of the OTCQX quotation combined with the ADR program is to create a broader secondary market for Enerji's securities, particularly in North America, by providing better access for American investors to deal in Enerji's securities. This limits the risks and inconvenience for these investors in cross-currency transactions.

Operationally, the first of the Airec heat exchangers has arrived in Perth from Sweden and was shipped to Enerji's engineering contractor. It will be fitted to the exhaust modifications that are being prepared for installation on the Carnarvon project early in the new year subject to approvals.

Enerji said the Airec heat exchangers are a key component in its waste heat recovery system that captures heat from the exhaust gas of fossil fuel generators and feeds into an Opcon Powerbox to produce emission-free electricity.

It is a similar unit to the one Enerji recently sold to a Perth public hospital project for waste heat recovery.

Airec claims its heat exchangers are the most compact and efficient gas heat exchangers in the world. (ASX: ERJ)

EnviroMission said it has received a formal commitment to provide the entire development and construction capital for its first Solar Tower power station being developed in Arizona.

The financing is subject to due diligence and the acceptance of banking instruments by EnviroMission's legal advisors and bankers.

"The proposed financing is 100 per cent pure equity, no debt, with the investor proposing to take a majority interest in the La Paz Solar Tower without dilution to EnviroMission's issued capital," said chief executive, Roger Davey.

EnviroMission expects to be able to inform the market of the final terms and timing of the financing early in 2012.

If all goes well the funding commitment will be the basis for the ongoing financing of the development of Australian Solar Tower power stations in the US, and other markets, including Australia, he said.

EnviroMission's Australian Solar Tower intellectual property was independently valued at $60 million, said Mr Davey.

The project has so far taken a decade of development since EnviroMission listed on the ASX.

Mr Davey said EnviroMission is ready if incentives become available in Australia capable of attracting investment capital for a development of the size of a 200 MW Solar Tower proposal.

EnviroMission intends to commence a development strategy in Australia - Western Australia and South Australia in the first instance - that will engage the mining sector to explore the role the Solar Tower technology could have to meet their sustainability and carbon reduction/ abatement targets and energy generation requirements.

EnviroMission takes the view that the progress of the La Paz development will inform development feasibility and capability in the event incentives can be obtained from Federal and State governments. On that basis EnviroMission intends to resume discussions with the Federal Government and the Governments of WA and SA to consider incentives to support large-scale grid connected solar power generation in Australia, he said. (ASX: EVM)

Geodynamics has placed 25.4 million shares 15 cents each to raise $3.8 million from professional, sophisticated and institutional investors in Australia and overseas.

The placement is part of a program to raise $8 million through a combination of institutional placement and $4.2 million share purchase plan. The minimum offer price for the share purchase plan is 13.5 cents.

Under the placement, SunSuper increased its stake in Geodynamics from 6.7 to 8.2 per cent. Sentient increased its holding from 7 to 8.3 per cent.

The placement was conducted by RBS Morgans, Austock and New York-based Viriathus.

The funds will be used to progress the company's Cooper Basin Geothermal Project, commencing with drilling Habanero 4 in first quarter 2012.

Managing director and chief executive officer Geoff Ward said "This is a measured capital raising that will ensure that we can move in a material way smoothly through our appraisal and development program, focused on demonstrating Australia's first commercial geothermal project at the Habanero site. We have a clear strategy to achieve this over the next two years and are well prepared for our next drilling campaign at Habanero."

"The placement has been strongly supported by our cornerstone investors, Sentient and Sunsuper, and our project continues to be backed by Origin Energy through their direct investment and 30 per cent interest in the Innamincka Deeps (EGS) Joint Venture." (ASX: GDY)

Green Rock Energy
Shares in Green Rock Energy were trading at their all time low of around 0.8 cents.

The company has restructured the employment arrangements of managing director Richard Beresford and technical director Adrian Larking to reduce costs. The new arrangements for both directors are flexible time-writing contracts with a cap on total monthly costs set substantially below present levels of remuneration, it said.

Chairman Jeff Schneider thanked both directors for their preparedness to move to the more flexible engagement. This will enable the company to progress its priority projects and at reduced cost.

"The Board continues to examine all opportunities to progress the Company's priority projects in a low cost manner," he said. (ASX: GRK)

Greenearth Energy
Shares in Greenearth Energy fell to an all time low of 5 cents on 3 January. The shares have been steadily declining since a peak of around 23 cents in December 2009. (ASX: GER)

Hot Rock
Energy Development Corporation (EDC) has completed its due diligence on Hot Rock and both companies are now finalizing binding joint venture agreements in line with the Heads of Terms (HOT) announced on 28 November 2011.

EDC, the world's largest geothermal company, is entering into the joint ventures with HRL to explore and develop the geothermal potential of the Calerias and Longavi projects in Chile and the Quellaapacheta and Chocopata projects in Peru. (ASX: HRL)

Intelligent Solar
The administrator of Intelligent Solar has putting forward a recapitalization proposal that could see the company relist on the ASX.

The proposal includes a share consolidation on a one for seven basis, and an injection of $2.81 million before costs for a net injection of $1.73 million. The main investor is CF Foundation Group, which is trustee of the Chin Family Superannuation Fund and associated with Kevin Chin, the founder of venture capitalist Arowana Capital.

CF Group will hold 39.1 per cent of the company and all new investors will hold 43.6 per cent. Mr Chin, along with Paul Welch and David Keefe, have been appointed directors, subject to the deed of company arrangement. Jury Wowk and David Hoff have resigned as directors. (ASX: ISL)

Kimberley Rare Earths
On 3 January shares in Kimberley Rare Earths hit a new low since listing of 7.6 cents.

Director Tim Dobson has indirectly acquired 200,000 shares at an average price of 9.5 cents.

The company said final drilling assays from Cummins Range in WA have returned further broad, high-grade rare earth intersections. Work has commenced on a new resource estimate. (ASX: KRE)

KUTh Energy
KUTH Energy subsidiary, KUTh Energy (PNG) Ltd (KPNG), has entered into a Memorandum of Understanding with KULA Energy to cooperate in securing the KPNG Papua New Guinea (PNG) geothermal exploration licences.

In 2008 KPNG lodged geothermal exploration licence applications over three locations in West New Britain and Ferguson Island.

Under the MOU, KULA will invest its own equity and human resources to accelerate the
securing of the exploration licences over the application areas lodged by KPNG.

KULA will have an initial 12 months ending 31 December 2012 to secure one or more of the licence applications, one of which must be Talasea, and in return will earn a 49.8 per cent share in KPNG.

If KULA does not secure the licences it can seek an extension of time at KPNG's discretion or exercise an option to buy all of KUTh's shares in KPNG for $502,000.

Managing director David McDonald said, "We recognize the resource potential in PNG and we are keen to see this project moved to the next stage. We are equally aware that the progress now being made in Vanuatu and a number of other target areas means that we have to focus our limited capital and resources. This style of cooperation has the effect of extending our reach through collaboration. We will support the KULA team in their pursuit of these licences but the on ground driving will need to come from them."

Shares in KUTh Energy are trading close to their all time low of 3.5 cents. (ASX: KEN)

Metgasco has its first agreement for the sale of gas from its Casino gas project in northern NSW.

Metgasco will supply local dairy manufacturing company Richmond Dairies with natural gas. Sales will commence this year and the agreement is for 10 years.

Richmond Dairies processes milk from local farms to produce dairy products primarily for export. The supply of natural gas will significantly lower its overall energy costs and provide a stable energy price for the factory over the decade.

The gas supply infrastructure is expected to tie into the development of Metgasco's Richmond Valley Power Station project, which has development approval from the NSW Government. Additional approvals will be required to install gas supply infrastructure to Richmond Dairies facilities. The gas sale agreement is subject to these approvals.

Chief executive Peter Henderson said "The supply of local gas to local customers demonstrates our strategy in action and the very real benefits of the development of a regional gas industry in NSW. This agreement delivers lower cost energy to a local business, secures local jobs and delivers significant investment in a region which has one of the highest unemployment rates in the State. It also demonstrates how the agricultural and energy industries can work co-operatively together for the benefit of the wider community." (ASX: MEL)

Panax Geothermal
Panax Geothermal said it remains confident that Molten will be able to provide the total required funding for Panax's portfolio of geothermal projects in Indonesia, but it is clear that Molten needs more time to fulfill those objectives.

Thus Panax and Molten have agreed to another extension to the term of the Heads of Agreement, and Molten now has until 28 February to fulfill the financing requirements.

Under their Agreement, Molten will subscribe for $1 million in equity capital in Panax at 2 cents per share and listed options on a 1 for 2 basis with a strike price of 4 cents per share and a three year term.

Within 90 days, Molten will progressively contribute the first $10 million in exploration and development funding for Panax's Indonesian projects, in return for which Molten will progressively earn into a 50 per cent interest in the issued capital of Panax's subsidiary, Panax Geothermal Singapore No.1. (ASX: PAX)

Papyrus Australia
Papyrus Australia shares touched a new all time low of 3.5 cents on 21 December 2011. The share price has steadily declined since May 2007 when it peaked at $1.02. (ASX: PPY)

Wag's $4 million capital raising that was due to close on 21 December has been extended to 31 January.

WAG Limited, which is to be renamed PacPyro Limited, has an agreement to acquire PacPyro, which is developing slow pyrolysis technology that converts waste and low value biomass into renewable energy/ electricity and a proprietary biochar called "Agrichar".

The company will utilize the slow pyrolysis technology to develop commercial scale waste management and renewable energy projects and produce Agrichar.

To facilitate commercialization, PacPyro is developing a business model that targets revenue streams from licence fees, royalties, services and by-products, engineering revenue from project development/ delivery/ upgrades and cash flows from project ownership interests.

It is also targeting strategic partnerships and relationships with established large scale waste management companies that will benefit from the inclusion of the slow pyrolysis technology in their business models. This could be through improved efficiencies and creating additional value such as land fill minimization, soil amendment, or in-situ power.

The company will primarily operate in the emerging waste management, renewable energy, horticulture/ agriculture and carbon markets, it said.

PacPyro has an operating demonstration plant at Somersby in NSW, and has a $4.5 million offer from the Victorian Government for its SE Victorian Carbon Negative Energy Project. (ASX: WAG)

Water Resources Group
Water Resources Group has completed a private placement of 8.83 million shares at 6 cents each to raise $530,000 from professional and sophisticated investors.

Intersuisse Limited was manager to the placement.

Chief Executive Office Brian Harcourt said "In preparing for the company's maiden contract installation in the Cape Verde Islands, we are pleased to have raised these additional funds to assist with our operational cash flows and financial flexibility in the lead up to first revenues."

In December Water Resources Group announced that the Municipality of Santa Catarina in the Republic of Cape Verde, an island nation 570 kilometres off the coast of West Africa, has signed a binding Water Offtake Agreement with Blue Aquifer LDA. Blue Aquifer is a locally controlled water supply company 49 per cent owned by Water Resources Group.

The Municipality of Santa Catarina has a serious water deficiency. The Agreement is for the supply of 4,000 cubic metres per day as an initial requirement with the provision that this could be increased in the near term. The contract calls for Blue Aquifer to supply potable water to Santa Catarina for 25 years, a contract worth at least US$95 million.

Blue Aquifer will manage and operate the plant. All equipment and systems will be purchased from Water Resources Group Ltd by Blue Aquifer. Water Resources Group will also be entitled to 49 per cent of the net income from Blue Aquifer LDA's water sales.

Mr Harcourt said "This is a milestone event for Water Resources Group Ltd, reinforcing our business model as outlined in the company's Prospectus. We expect that other municipalities in the Cape Verde Islands will follow the lead of Santa Catarina and take advantage of the WRG joint venture.

WRG's Advanced SeaWater Reverse Osmosis system is a low cost, chemical free, community based desalination systems and installation is expected to be completed in 12 months.

Water Resources Group's wholly owned subsidiary, Water Resources International Limited, has secured a $2 million loan from Dilato Holdings Pty Ltd, a substantial shareholder of the company.

The loan, of which $500,000 has been drawn immediately, has a 15 month term, bears a 12 per cent per annum interest rate and is guaranteed by WRG. Dilato also gets 10 million unlisted options with an exercise price of 10 cents per share and an expiry three years from issue. Dilato is entitled to request a board position in WRG whilst the loan is current. (ASX: WRG)

____ International Fixed Interest ____

Contact Energy
Contact Energy's offer of NZ$200 million in capital bonds has been successful, and the minimum interest rate payable until 15 February 2017 has been set at 8 per cent per annum.

The first interest payment date is 15 February and interest will continue to be paid quarterly thereafter until redemption. The first interest payment will be made to the original subscriber.

The NZ$100 bonds are currently trading at NZ$99.75. (NZX: CENFA)

Eco Investor Update






Search Eco Investor