Page 1...."This brochure is intended to act as a basis for futurepresentations and marketing collateral, with content subsequently tailored to each particular audience, such as brokers or potential customers and amended over time to reflect material developments and progress."
Together with Ashley's oppie conversion yesterday, this oozes confidence.
Below are some highlights I see:
Page 9...Indian integrated Coldry and Matmor project
"Aiming to prove at a large scale, a multi product plant to service a broad spectrum of energy and steel industry needs"
The energy/steel industries are huge and the emerging India story is the new China brokers desperately want access to.
Page 9..."Australian Coldry PCI project ⦿Techno economic feasibility study to start Q3 2015 for a
>200,000 tonne per annum plant to produce high grade PCI
coal from lignite ⦿Coldry is the leading front-end drying solution, enabling high value-add outcomes"
ECT are no longer a one trick pony. CEA state Coldry is the best drying solution. Coldry, despite ALDP will IMO end up being the drying tech to unlock the Latrobe Valleys value added diesel, fertilizers, hydrogen, PCI coal etc
Page 9...Now that's a VERY appropriately qualified "believable" Board that imo any reputable brokerage firm would deal with - all bases covered.
Page 9...Non-executive Director - David Smith David has a strong legal and commercial background, having practiced commercial law for over 24 years including nearly 17 years as a partner in national firms. He is currently a partner in the intellectual property and technology group at Gadens Lawyers. He has assisted many companies with protecting their intellectual property, IP commercialisation agreements, collaborative research agreements and international negotiations. This year David was recognised as a 'Best Lawyer - Intellectual Property' for the second year running.
The Coldry/Matmor IP's are in very capable/safe hands and with Austrade watching, I believe brokers will consider the patents a very low risk.
Page 10....Matmor Research Manager – Keith Henley-Smith "Keith is a chemical engineer, metallurgist and inventor, having developed and patented a fully austenitic stainless steel, called PAK-450. Keith also holds the honour of being the only Australian invited by the Culham Centre for Fusion Energy (CCFE) in Oxford UK to consult on the development of the world’s largest Tokamak fusion device in Cadarache, France, the Joint European Torus (JET) Project, Mr Henley-Smith’s PAK-450, with its inert magnetic properties, has been identified as a potential key material in the development of the fusion reactor. Mr Henley-Smith leads the fundamental research and development efforts for Matmor and views it as one of the single greatest innovations in primary iron making since the introduction of coke based methods over 200 years ago."
page 20....“One distinct advantage of Coldry is the relative low heat requirements in the drying process, allowing for the opportunity to make use of waste heat from an industrial facility or power plant.”
Dr Victor Der
Former Assistant Secretary for Fossil Energy, US Dept. of Energy
General Manager, North America, Global CCS Institute
Page 21....“Given India’s large demand supply mismatch of thermal coal, the Coldry technology offers an efficient and cost effective solution to utilize the 43 BT (est.) lignite reserves of India efficiently to bolster the energy security of the country while mitigating any adverse impact on the climate.”
YES Bank Ltd, India That page 51 chart of the recent YES Bank Annual Report where it states ECT/NLC/NMDC signing the tripartite agreement is simply a formality was absolute gold!
That chart on page 21 is new info and extremely interesting given its India specific. Lignite cost $10 (although on page 36 it states it could be as low as $5/tonne). Processing cost $7.20. Finance/Depreciation about $6. Sale price about $50. Leaves profit margin $26.80. Now that's the profit on only $50. Newcastle breakeven is about $90 and then theres the freight....hmmmm. Now these are the potential profits for Coldry which are compelling enough – the additional Matmor value adding potential profit is simply breathtaking and brokers will recognise that.
Page 29...Matmor can utilize iron ore 45-65%. Most of NMDC's ore is around 60%, but on the other Indian coast the Goanese ore is mostly low grade 45-60% which they cant sell anymore in volume. Matmor to the rescue at some stage. http://gmoeaonline.com/index.php/mining-in-goa/facts-figures
Page 33..."Positive test results on both Ilmenite (Ti source) & Mn ores with further development required" http://www.iim-delhi.com/upload_events/05PerspectiveUntappedPotentialTitaniumIndia_SAIL.pdf "Titanium is also known as “Space Age Metal” - application in space, defense, and aeronautics technology"
"Titanium not being produced commercially in India at present"
"India has excellent reserves of Titanium minerals like Ilmenite and Rutile...
Titanium bearing ilmenite deposits are estimated at around 375 – 400 Mt i.e. 21% of global deposits approx."
"Significant reserve in Tamil Nadu is in forest area"
There you go, India has 21% of the worlds titanium and thus far no tech to unlock it. And it just so happens theres a significant titanium deposit in Tamil Nadu! The value adding potential is simply endless. Will brokers like this? Yep
Page 36...Matmor....Coking coal is replaced by low rank coal which can cost as little as $5 a tonne to mine.
“Capital cost is estimated to be less than half that of a comparable traditional blast”
Margins 40-70% greater than traditional iron making. Compelling stuff. SAIL, Tata, JSW, Posco, Hyundai etc etc will sit up and take notice shortly imo.
Page 42....Partners.
"Neyveli Lignite Corporation is the custodian of India's lignite resources, the lead partner on Coldry and the project host. The NMDC (National Mineral Development Corporation) is India's largest iron ore miner. Both companies are PSU's (ie Government entities).”
Not Tincom, not Monash. Two Indian Govt monsters who effectively have near monopolies in their respective businesses.
Will brokers like that? Yep
Coldry demo and Matmor pilot info coming to brokers soon. What will brokers like about ECT?
Not one but Two industry transforming techs that seem purpose designed for India in this very timeframe.. ie India has near zero coking coal and very limited high grade iron ore, but huge amounts of the reductant lignite and low grade ore/tailings etc. India has currency issues, Coldry/Matmor can greatly assist there. The China "story" is mostly over while the India story is in its infancy with Modi heavily pro business and everything ECT are wanting. Coldry/Matmor provide an excellent vehicle to ride the Indian tsunami via microcap ESI.
What a brilliant ann by ECT on the morning of the ASX open after the Dow 650 point drop clearly explaining how India is largely "insulated" from the worlds financial dramas. ECT/ESI could become a safety haven...lol.
ECT anns state the Australian High Commission in India and Austrade are firmly behind ECT. Brokers will love that. They will also like the 2 Indian Government monsters as partners. They are not Tincom or Monash, they are the real deal and brokers will imo soon understand the potential enormity of Coldry/Matmor.
No rail/port needed (unlike Victoria). Coldry construction ready via the worlds best - ARUP. Again and again ECT will ooze credibility in brokers minds.
Brokers ALWAYS worry about putting their clients into projects that are going to need endless capital injections. ECT have access to the GW $200m R&D fund for about $30m. Now this is VERY exciting for brokers risk wise. What "if" because the project is in India but because of using Australian technology, the capex can be claimed from the Australian Govt for R&D ie the project may as well be in Latrobe Valley? What an amazing funding arrangement that would/will be!
Its India, so what about patents?
ECT's award winning patent lawyer expert Smith has it covered.
What about scale-up risk?
My enquiries to the company strongly indicate that "if one module of Coldry or Matmor works - then a thousand will". We know Coldry works, and my research tells me Matmor scale-up will be no problem either.
Remember the WEC story in the jungles of Kalimantan Indonesia 2007. Market cap about $1B based on a heat/squeeze monstrosity that a broker would find hard to imagine today as "scalable". Sure coal prices were sky high then BUT they did not have Matmor with all its high value adding potential. WEC did not even own their patents - CSIRO did.
Matmor has no completion worldwide. ECT have made that statement many times and any broker will like that. The potential profit margins are huge and versatility is almost endless. Given WEC’s $1B market cap and given the Matmor potential coupled with the India story – why can’t ESI obtain a $1B market cap in say 2 years time?
A take over may beat us, but who knows? It’s true believable blue sky potential.
Assuming the tripartite agreement is signed, I don't expect the worlds coal/steel monsters to just sit and wait 2 years for the Indian demo/pilot to unfold. Why wouldn't there be intense interest from multinationals from day 1 the tripartite is signed.
Perhaps there will be multiple demos/pilots happening in 1 year, including the CEA PCI Latrobe Valley jv.
Neyveli/NMDC partnering with an ASX microcap to "disrupt" two industries will be truly interesting stuff for the Tata's of the world.
Success breeds success and ECT are poised to sign their company maker.
