First of all, let me give you the good news that your company this morning received its first signed letter of intent from an offshore Coldry customer for product and equity participation. More of that later.
The last time we had the opportunity to meet face to face was at the General Meeting in September where the Board sought your approval for a new funding facility that would enable us to reach our global sales objective.
Many of you were at that meeting and we are pleased to see you here again this evening. There are also some new faces, welcome, I’m glad you could make it.
Thank you again to the Shareholders who supported the Pacific Capital Investment Management’s zero coupon convertible note. As promised at that meeting, your board obtained independent legal advice on this matter and I am now pleased to report that negotiations between ECT and Pacific Capital were recently concluded with the final documents having been executed by ECT and are now with Pacific Capital for its final execution.
This has been a very important piece of work in the company’s history. We would like to acknowledge Pacific Capital for its effort in getting this unique funding facility over the line. This is a significant vote of confidence in ECT in the current economic climate.
Once the escrow funds have been fully deposited, we will migrate out of the previous Fortrend Equity facility and into the Pacific Capital facility, which means we have the funds for our recruitment to find the best people to fill the roles of Coldry Business Manager and Coldry Product Manager.
We will also now have the required funds for the working capital necessary to put in motion the building of our much anticipated 150,000 t.p.a Coldry commercial production plant.
As I advised earlier, Environmental Clean Technologies (ASX:ESI) has today received back a signed Letter of Intent from Vietnamese based coal brokers, Victoria Capital, to supply 20M tonnes of Coldry to the company over the next 20 years.
This is a major milestone in the company’s history and he would work with Victoria Capital to finalise the contract by month’s end.
Our Chief Executive has a strategy already in place to ensure this order is fulfilled. The first step is to build our 150,000 tpa production plant and work towards up-scaling this plant in increments over the next eight years. The construction process of the production plant will start in 2009 with completion expected by the end of 2010.
The work our strategic partners Arup (design) and McConnell Dowell (pricing and construction) have done in order to provide us with a +/-10% feasibility report for the 150,000 tpa plant gives us great confidence that the plant is commercially viable and will be delivered within the anticipated time frame.
Finance partner Phillip Capital will lead the preparation of an Information Memorandum to raise capital for the plant. The Information Memorandum will be supported by our strategic partners.
Victoria Capital, a VietnameseVietnamese based company that currently sells 120M tpa of thermal coal in China, has been offered the right to provide equity into the project vehicle of the plant. Negotiations on this point are continuing.
We plan to upscale the amount of Coldry we produce quickly by building a second, 2.5M tpa, plant by the end of 2012. After this, we plan to increase our capacity in 5M tpa chunks until production reaches 20M tpa by around 2016.
The challenge for ECT will be securing enough lignite locally; however, discussions to date indicate we could source lignite from overseas in order to keep our strategic growth objectives on track.
We will be updating you and the market on this important announcement over the next few days.
Kos will speak about this in more detail soon.
I would like reiterate though that we hold significant competitive advantage over other brown coal drying technologies in that Coldry provides an opportunity for companies to subsidise the capital intensive transition to CO2 emission reducing technologies by generating new profits while also reducing their carbon footprint
If the generators were able to switch to only a 5% use of Coldry today they would make an immediate reduction in Co2 emissions.
To demonstrate the sustainability of these ongoing claims, no other company in this field has the support of as many reputable global companies who are leaders in their field as we do at ECT.
The likes of Arup, McConnell Dowell, Deloitte, SaHA International are alliance partners. This means that they are satisfied our Coldry technology is everything we say it is and more. It IS two years ahead of any competitor technology. It IS commercially viable.
ECT received another boost recently with maintenance and logistics heavyweight Transfield Services also signing a Memorandum of Understanding to maintain the operations of our first Coldry plant. This is another show of confidence in our technology and we are thrilled to call Transfield Services a partner – thank you Transfield.
These are relationships and partnerships that take more than dollars and cents to get across the line. We are very proud to have these alliances and together we will make a difference to the “˜cleaner’ brown coal sector in Australia and overseas.
We are also getting closer to securing the Coldry IP. We have a signed Letter of Intent from the Calleja Group and negotiations to acquire the Coldry and MATMOR technologies are continuing. The Letter of Intent we do have reaffirms the Calleja Group’s commitment to exploit the technology and the trust they have in ECT to deliver the goods.
We expect we will move to a full purchase of the Coldry IP by mid 2009.
We have come a long way as a company in the past 12 months. Many objectives that were set in place from the company’s conception have come to fruition in 2007-08.
Our technology is proven, we have funding, our partnerships are solid and we will soon own the IP to Coldry and have the option to proceed to purchase the MATMOR IP to ensure we can further exploit these technologies on a global scale.
I would like to thank ECT Director John Hutchison for his work over the past year, in particular in helping me personally get up to speed on a range of matters since I took over the Chair of this company in the latter part of the financial year.
John is up for re-election at this meeting and at this point I would like to thank him for his contribution until now. John’s experience in the coal and energy sectors and intricate knowledge of the La Trobe Valley in particular has been invaluable to this company.
Dr Dennis Brockenshire was formally elected to the Board at September’s General Meeting and I would like to express my thanks to him and look forward to his continued contribution going forward in this very exciting time at ECT.
Our Company Secretary Jan Macpherson is always working behind the scenes to ensure we have our house in order, provide timely responses and support our Chief Executive and your board – thank you Jan.
There have been questions about the appointment of further directors to the ECT Board and, as I advised at the September General Meeting, we remain actively on the lookout for experienced public company directors who will enhance the skill set and experience of the current board. At this stage we believe the focus of the company is better served in targeting the right people for the crucial Coldry roles and provision of operational support for our Chief Executive. The last thing we want is more directors than employees.
As the year draws to a close I would also like to acknowledge the staff at ECT and our Chief Executive Kos Galtos for the non-stop effort and energy he puts into this company every day of the week. Kos will now outline our plans for the company’s future but before he does I would like to respond to a question on notice put by a shareholder who has asked: what is the current situation concerning the 20 million shares allocated to, and placed in trust for, the Calleja family?
Based on legal advice the company has received, I advise that the legacy shareholders made an allocation to a trustee of 20 million shares for unspecified purposes of the company. This was a private arrangement made by these seed shareholders who are the beneficial holders, and has nothing to do with the company and I cannot comment further.