TIDMAEG
RNS Number : 8114M
Active Energy Group PLC
11 January 2019
Active Energy Group Plc / EPIC: AEG / Sector: Alternative
Energy
11 January 2019
Active Energy Group Plc ('Active Energy', 'AEG' or the
'Company')
Operations Update
Active Energy, the London quoted renewable energy and forestry
management business focussed on biomass, announces an update
relating to plans for the completion of the first industrial-scale
CoalSwitch(TM) production facility and the market introduction of
its revolutionary drop-in biomass fuel, together with developments
from Active Energy's other business operations.
Overview
The substantive nature of discussions with potential offtake
partners in Europe and Asia in recent weeks has further increased
AEG's confidence in the scale of the commercial opportunities for
Coalswitch(TM) and SuperFuel(TM).
-- Reflecting this confidence, AEG has been focussed on securing
a site in Lumberton, North Carolina, which ensures the Group has
the scale of facilities to expand production of CoalSwitch(TM) and
SuperFuel(TM) over the next 24 months.
-- AEG has signed a letter of intent (the "LoI") with Alamac
Holdings LLC ("Alamac"), a privately owned US entity, regarding the
proposed purchase of a site in Lumberton which includes up to
415,000 sq ft of covered factory space and circa 145 acres of
surrounding land (the "Lumberton Site").
o Pursuant to the terms of the LoI, AEG will conduct due
diligence on the Lumberton Site until 28 February 2018 at which
point the Company intends to formalise a commercial real estate
purchase contract with Alamac, the specific terms of which will be
finalised and agreed upon completion of the due diligence.
o The factory at the Lumberton Site is connected to Georgia
Renewable Power LLC's ("GRP") power plant by an existing steam
distribution pipeline.
-- Following the proposed purchase of the Lumberton Site, AEG's
immediate focus will be on installing the initial five tonne per
hour Coalswitch(TM) plant and generating revenues at the earliest
opportunity.
-- AEG has also been progressing discussions with Andritz Group,
a leading global engineering group, to support the installation of
the initial Coalswitch(TM) plant at the Lumberton Site and provide
engineering support to ensure that the Lumberton Site has the
capacity to produce up to 400,000 tonnes of CoalSwitch(TM) per
annum.
-- Ongoing negotiations relating to the supply of feedstock to
the Lumberton Site have demonstrated possible additional revenue
generation opportunities for the Group which can be advanced
alongside the development of the CoalSwitch(TM) plant. These
opportunities include the possible co-ordination of AEG's
activities with existing timber trading businesses to supply both
saw log and biomass to new customers in Europe and Asia.
Product and Commercial Developments
Production of CoalSwitch(TM)
The Company is now focussing on establishing its first
industrial-scale CoalSwitch(TM) plant in North Carolina, which will
act as the new base for all of Active Energy's CoalSwitch(TM)
operations in the United States following the transportation of
some facilities from the Company's initial site in Utah. This is a
strategic location close to the Eastern Seaboard of the United
States in the heart of the lumber production region in North
America and is also an established location for sales to Western
Europe and South East Asia.
The Group has signed an LoI with Alamac regarding the proposed
purchase of the Lumberton Site which is connected to GRP's plant
via an existing steam line. Pursuant to the terms of the LoI,
Active Energy will conduct due diligence on the Lumberton Site
until 28 February 2018 at which point the Company hopes to
formalise a commercial real estate purchase contract with Alamac,
the specific terms of which will be finalised and agreed upon
completion of the due diligence.
The Lumberton Site is fully permitted for operations and the
permits can be transferred to AEG upon completion of the purchase,
thus reducing the time to market of the planned production of
CoalSwitch(TM). The Lumberton Site also includes ancillary
facilities, such as water treatment, an analysis lab, offices and
IT hardware which AEG expect to be included in the proposed sale,
thus reducing the amount of capital expenditure required for the
Lumberton Site.
The Directors believe that the size of the Lumberton Site will
ensure significant scope for the expansion of the initial
CoalSwitch(TM) plant via the addition of extra CoalSwitch(TM)
production facilities. Furthermore, the Directors expect that AEG
will benefit from complementary biomass, saw logging and other
commercial opportunities in the Lumberton area.
In addition, the Board continues to assess longer-term
international expansion opportunities, with a particular focus on
Western Europe and South East Asia. The Company has received
multiple expressions of interest from potential partners in Asia
and the CoalSwitch(TM) technology is now being evaluated by a
number of engineering, procurement and construction contractors to
build CoalSwitch(TM) production facilities. No assurances can be
given at this stage that these expressions of interest will lead to
formal contracts to construct CoalSwitch(TM) plants and the Company
will provide further updates in regard to these discussions when
appropriate.
Approval and Commercial Development of SuperFuel(TM)
Further to the update provided on 28 September 2018, Active
Energy's Joint Venture company with Cobant Sp. z o.o., submitted an
application to the National Centre for Research and Development
("NCBR") in Poland whom are responsible for the disbursement of EU
grants, requesting grant funding to subsidise the development of
its SuperFuel(TM) technology. The approval for this funding by NCBR
is still pending. Although no assurances can be given that NCBR
will approve the funding, there have been ongoing discussions
between the relevant parties over recent weeks and the Board of
Active Energy has been advised that a definitive decision should be
communicated during Q1 2019.
Negotiations with potential off-take partners in Poland for the
SuperFuel(TM) product also continue and the Company will provide
further updates to the market in this regard as appropriate.
Development of PeatSwitch(TM)
The Company's PeatSwitch(TM) product, a beneficiated, soil
substrate product made from waste fibre utilising the Company's
proprietary PeatSwitch(TM) process, continues to represent an area
of complimentary commercial opportunity for Active Energy. The
Board has received a number of approaches from a variety of
industries regarding the possible application of PeatSwitch(TM)
technology and these will continue to be evaluated over the coming
months.
The Company's previously announced MOU with Young Living Farms
('YLF') relating to PeatSwitch(TM) plant sales has not resulted in
a definitive contract at this stage due to an internal strategic
review at YLF. The Board will issue further updates in regard to
the commercial activities with YLF as appropriate.
The Company is continuing to work with Kellogg Garden Products,
a market leading company in the development and manufacture of a
range of garden and agricultural soil enhancements, following the
commencement of initial test work as previously announced on 28
September 2018. Initial test results highlighted some technical
issues which both AEG and Kellogg are now working to resolve. It is
agreed that more testing by both parties will be undertaken in H1
2019 and Active Energy will provide further updates on this
programme as appropriate.
Commercial Developments for Timberlands International
Newfoundland
Following the previously announced grant of two five-year
Commercial Timber Permits ('CTPs') for Forestry Management Areas 17
and 18 located within the Crown Province of Newfoundland and
Labrador (the "Province") in November 2018, the management is now
developing, for the Board to evaluate, an operational plan
regarding activities in the Northern Peninsula, including a short
term route to commercialise the value of these permits.
Alberta
Further to the Company's announcement on 17 May 2018,
discussions regarding the Group's MOU with Powerwood Canada
continue to progress. Powerwood and AEG have commenced a process to
allow financial due diligence by potential funders for the joint
venture project in Alberta. The owners of Powerwood remain keen for
Active Energy to be involved to utilise both its forestry expertise
and CoalSwitch(TM) processes to increase the underlying value of
the relevant assets. The Board of AEG will evaluate the project
once the definitive financial terms are presented to both AEG and
Powerwood. The Company will make further announcements regarding
the collaboration with Powerwood as soon as practicable.
Michael Rowan, Active Energy Chief Executive said, "The Active
Energy team has been working hard over recent weeks to implement
the Company's refocussed strategy and achieve revenue generation in
as short a timeframe as possible. With this in mind, the
installation of our first CoalSwitch(TM) plant at the Lumberton
Site is a priority and we have made important strides forward
toward achieving this with the assistance of GRP. The LoI with
Alamac is a critical component of this process and, subject to the
satisfactory completion of due diligence, will enable activities on
the ground to accelerate with the objective of achieving first
CoalSwitch(TM) production and sales in the first half of this year.
In addition, our discussions with leading global engineering
company Andritz Group are proving encouraging and we are optimistic
that a long term relationship will be established. We intend to
expand the Lumberton Site with their assistance and roll out
further CoalSwitch(TM) plants both in North America and
internationally.
"The Board sees the commercial introduction of CoalSwitch(TM) as
the springboard for both product credibility and the catalyst for
new prospective customers to sign for both new plants and for new
off-take agreements. We have already generated considerable
interest from a range of potential customers, partners and
off-takers.
"Alongside the large-scale market introduction of
CoalSwitch(TM), we continue to advance our activities in
Newfoundland following the grant of cutting permits in November
2018, with the objective of delivering cash flow in the near
term.
"The AEG team is focussed on generating value for our
shareholders and although there can be no guarantees, I firmly
believe that the quality of our intellectual capital, our partner
and customer relationships and our long term strategic focus will
be reflected in excellent returns for our shareholders. This is a
strategy which I believe will dominate our corporate development
during the first part of 2019 as we chart a course towards
achieving critical commercial milestones, revenue generation and
corporate growth."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
**ENDS**
Enquiries & Further Information:
Website LinkedIn
www.aegplc.com www.linkedin.com/company/activeenergy
--------------------------------------
Enquiries
Active Energy Group Michael Rowan
Plc Chief Executive Officer (Active
Energy)
Antonio Esposito
Chief Operations Officer
( Active Energy)
--------------------------------- ----------------------------
Northland Capital David Hignell / Gerry Beaney Office: +44 (0)20
Partners Limited / Domile Andruskeviciute 3861 6625
Nominated Adviser
--------------------------------- ----------------------------
Optiva Securities Jeremy King / Ed McDermott Office: +44 (0)20
Ltd Broker 3137 1902
--------------------------------- ----------------------------
St Brides Partners Susie Geliher / Isabel de info@stbridespartners.co.uk
Financial PR Adviser Salis Office: +44 (0) 20
7236 1177
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About Active Energy Group:
Active Energy Group Plc (AIM: AEG.L) is a London Stock
Exchange-listed international renewable energy business based upon
forestry assets. Its model is focussed on capturing the entire
forestry value chain through sourcing, utilising and
commercialising assets, and setting a new standard in the
sustainable management and optimisation of timber resources.
The Company is led by a highly technical and commercial team
with the experience to execute its defined growth strategy and
build its visibility, primarily as a London-listed timber
opportunity with a revolutionary biomass fuel technology.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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