Environmental Clean Technologies Limited (ASX:ESI) Half Yearly Accounts
Melbourne, Feb 25, 2010 AEST (ABN Newswire) - Environmental Clean Technologies Limited (
ASX:ESI) is in the business of commercialising and selling disruptive technologies that have game-changing potential within the energy and resources sector capable of delivering significant environmental and commercial benefits.
ECT's core portfolio includes Coldry, our flagship coal drying and water recovery technology that produces a black coal equivalent from low rank coal resources that supports the growing demand for energy at lower CO2 emissions than would be otherwise possible; and Matmor is a unique method for producing high-quality iron from inexpensive, abundant brown coal and iron oxide bearing material such as mill scale, nickel tailings and, of course, high or low grade iron ore.
Chairmans Message
Dear Shareholders,
In the first half of the financial year we have successfully negotiated the critical steps needed to secure your Company's future.
Through your support, we have the funding to pursue the multiple commercial opportunities for Coldry in which we are engaged with confidence and we have developed a robust business model that includes a detailed step-by-step engagement process for prospective Coldry licensees/plant developers. In addition, we have implemented a roadmap for the next stages of development of the Matmor process for iron making.
CEO, Kos Galtos, has embraced our go-to-market strategy for Coldry with unflagging enthusiasm and the Board has every confidence that he and his team will continue to successfully drive the commercialisation of Coldry in our target markets. We can look forward to an exciting year ahead as we firmly focus on meeting the growing energy needs of emerging markets by creating long-term supplies of Coldry, Black Coal Equivalent (BCE), pellets for use in more efficient power generation plants, together with significant volumes of water for industrial use.
Dave Woodall
Chairman
Chief Executive's Report
Financial Results Overview
The net result of operations after applicable income tax expense was a loss of A$2,021,072, almost double that of the previous corresponding period. This reflects the scale up of activity to secure the company's financial position and drive forward as rapidly as possible the commercialisation of Coldry, our flagship coal drying and water recovery technology. A substantial contributor to the period expenses were non-cash related and as a result the accounting loss was greater than the corresponding net cash outflow from operating and investing activities. The loss increase was chiefly attributable to costs associated with consultant services relating to corporate financing; settlement of the convertible note and amortisation of the Coldry Intellectual Property acquired in June 2009; expansion of the management team with its associated costs and employee entitlements such as annual leave; as well as more international travel to advance relationships and agreements with high calibre partners for Coldry in target markets.
The Company's cash position was strengthened to A$2,223,025 at 31 December 2009, primarily from a capital raising of A$2.64 million (before costs and expenses) via a Placement of new shares and options to institutional, experienced and sophisticated investors. In addition, conversion of options during the reporting period raised a further A$682,206. These funds have been earmarked to support a more aggressive Coldry sales approach and for advancement of the Matmor technology.
Coldry Progress
Progress on the first Coldry venture in the Latrobe Valley, Victoria during the period included confirmation that ECT's Vietnamese partner, Tincom had secured its foreign investment license from the Vietnamese Government to allow it to invest in the production of Coldry pellets in Australia. ECT then secured the site and coal supply for the brown coal conversion project when it signed a Memorandum of Understanding with Great Energy Alliance Corporation Pty Ltd (GEAC) to participate in the upcoming feasibility study for ECT's first scaled up Coldry production facility at GEAC's Loy Yang power facility. A Special Purpose Vehicle (SPV) for the project has since been formed. Under the terms of the Coordination Agreement (announced 22 June 2009) ECT will receive a A$5 per tonne royalty, for 50 years, and a 10% free carry equity stake in the project vehicle.
A second Coldry plant prospect for ECT to access large Indonesian coal resource of 3Bn metric tonnes was announced in November 2009. ECT signed a Heads of Agreement with Alexis Minerals International Pty Ltd (AMI) to construct a plant for the production of 10M tonnes per annum of Coldry over the next 30 years.
Subsequently on 2 December 2009, ECT reported on the formation of a SPV, Coldry East Kalimantan Pty Ltd, for the establishment of a Coldry production plant in East Kalimantan, Indonesia.
A third flagship project in Eastern Europe was announced post the reporting date.
In January 2010, ECT reported it had signed a Memorandum of Understanding with ELBIS Sp.z o.o, a wholly owned subsidiary of the State-controlled power utility Polska Grupa Energetyczna S.A, to co-develop a localised business case for a Coldry plant in Poland.
Matmor Progress
ECT strengthened its security over the technology and its global right to exploit Matmor through agreement with the current controller of the Matmor technology (the Maddingley Group) to extend the milestones for the development and construction of the first Matmor plant to the end of 2014.
Subsequently, a review and assessment of the commercial development of the Matmor process for iron making was undertaken by Hatch, a globally recognised leader in metallurgical process technologies and advanced furnace design. The Hatch report has resulted in the development of a roadmap the next stages of development.
Next steps for Coldry
TinCom - Loy Yang Venture:
- Project - specific Feasibility Study (duration 3-6 months, commencement H1 2010)
- Revised project capital cost and production cost estimate (duration 1 month)
- Project structuring (3 - 12 months) including Coldry licensing agreement, regulatory approvals, supply and off-take agreements
AMI - East KalamantanVenture:
- Prepare Information Memorandum to attract investment to fund a formal feasibility study (duration 3-6 months)
- Project -specific Feasibility Study (duration 6 months)
Eastern European Venture:
- Joint development of an Internal Business Case for a Coldry plant with an initial production output capacity of three hundred thousand tonnes per year located within the 4400MW Belchatow power plant complex, the largest lignite power station in Europe (duration 6 months)
New projects:
- Identification of prospective licensees in target markets such as India, China and other emerging markets (underway)
- Project conceptualisation and technology licence structuring (6-12 months)
Next steps for Matmor
- Market analysis to inform aspects of Gap Closure campaign and identify strategic markets and partners (underway, due April)
- Gap Closure Campaign - implement Hatch recommendations and test plan to inform detailed design for pilot plant (duration 6-8 months, commence H2 2010)
- Quotation for feasibility study and detailed design of pilot plant
- Prepare Information Memorandum to attract partner or investor for pilot plant advancement
Kos Galtos
Chief Executive
For the complete Havilah Resources Half Yearly Accounts, please click the link below:
http://www.abnnewswire.net/media/en/docs/62357-ASX-ESI-332934.pdf
About Environmental Clean Technologies Ltd
Environmental Clean Technologies Limited (ASX:ECT) is in the business of commercialising leading-edge coal and iron making technologies, which are capable of delivering financial and environmental benefits.
We are focused on advancing a portfolio of technologies, which have significant market potential globally.
ECT's business plan is to pragmatically commercialise these technologies and secure sustainable, profitable income streams through licencing and other commercial mechanisms.
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