Environmental Clean Technologies Limited (ASX: ESI) (ECT or Company) provides the following comment to shareholders in response to media reports today in relation to the status of the Advanced Lignite Development Program (ALDP).
This morning, The Age newspaper ran an article in relation to the ALDP, claiming certain parties were to be successful in receiving grants.
ECT has contacted the Department managing the program seeking clarification. They are unable to confirm the veracity of any aspect of the article. However they have confirmed that they will advise the Company of ALDP outcomes as soon as they are authorised.
The Board is cognisant of the impact on all stakeholders of the challenging conditions and will continue to work toward the key objective of Coldry commercialisation to deliver fundamental shareholder value.
With this in mind we draw your attention to our strategy and the context surrounding possible ALDP outcomes:
Since mid 2011, the Board has pursued a clear objective: Coldry demonstration.
- Coldry demonstration is the key to commercial deployment.
- Commercial deployment is the key to generating royalty revenue from the Coldry technology.
- Revenue is the key to establishing a basis for fundamental valuation of the business and delivering on long-term shareholder value.
To deliver on the demonstration objective, we embarked on the detailed engineering with Arup in November 2011, well before the ALDP was conceived, with equity placement and project funding commitment from Monash Capital Group along the way.
This engineering activity has advanced through increasingly detailed levels of development and design, commencing with the Design for Tender, progressing through value engineering and refining the capital estimate accuracy along the way. We expect the engineering for the Victorian demonstration plant to reach ‘construction ready’ status in the coming weeks.
This will deliver the level of detail and accuracy necessary to enable a qualified constructor such as McConnell Dowell to build the plant.
The demonstration of the Coldry process at suitable scale is aimed at delivering the process guarantee required for potential end users of the Coldry technology to make an investment decision and deploy Coldry at commercial scale.
When announced in August 2012, the ALDP appeared to be a solid fit with our objectives, prompting the Company to apply on the chance that funds could be attracted, spreading the investment risk.
While we’re confident the Company submitted a compelling proposal, progressing through to final evaluation and meeting very strict merit criteria and probity conditions on the way, the outcome is yet to be announced by Government.
In the event ECT does not receive ALDP funding, the company will naturally be disappointed. However there is a clear path forward to demonstration.
That path includes the appropriate review of whether the Company should demonstrate locally, or elsewhere, given the emerging opportunity in India to both demonstrate Coldry and potentially establish a plant fabrication base there that can cost-effectively support Coldry deployment globally.
In support of our pathway, Monash Capital remains committed to the previously stated equity and project investment commitments and has made progress in their wholesale capital raising programmes designed to fund several projects, including Coldry demonstration.
Neil Youren, Director of Monash Capital Group stated, “We continue to be keen supporters of Coldry technology, and see great promise for its global deployment. We remain committed to providing material support to advance Coldry through its demonstration stages, and to participate in its global deployment following that.”
Further, the agreement with AGL that provides for a site, services and coal supply at Loy Yang power station, is not contingent on ALDP funding, so we continue to be able to proceed with a Coldry plant in Victoria.
As stated in previous announcements in relation to the ALDP:
As far as the Company is aware, the program has not concluded and no advice has been provided to program applicants. If ECT receives confirmation that no offer will be made under the ALDP, an announcement will be made immediately and alternative plans outlined.
For further information contact:
Ashley Moore – Managing Director +61 3 9909 7684 or [email protected]