libs or labor, page-25

I had not seen that statement, but the company has recently estimated the cost/MWh of CETO II to be in the range of $80-$120/MWh (although they seem reluctant to outline what size system those estimates are based on).

Certainly the costs listed in the report you provided were in the region of £70/MWh (cut and paste from the post-tax table in the report, and equaling $160/MWh), and I also managed to find a cost estimate of installed capacity, at about $3 500 000/MW. My problem is this contradicts what management recently outlined for me in conversation (which is where I get the $80-$120 estimate). The mixed signals are simply a symptom of a prototype/trial phase design, but they do ring alarm bells for me, and no matter which data I work off, it does not seem as economically competitive as wind, but has advantages in it's ability to be virtually baseload, and have minimal visual impact.

As I understand it, CETO III is a larger version of CETO II, and will offer some reduction in production costs, so these discussed figures are likely to be slightly lower during the commercial phase.

I should clarify my position and say I am not interested in the electrical generation simply because it has few of the hallmarks for a largely scalable technology with high profit margins. That there will be niche and mainstream applications I am confident, but it simply doesn't suit my investment strategy. A definite scientific curiosity, but a tough one to get returns from, in my opinion.

The desal function is certainly interesting from an investment perspective. RO units are quite complicated and expensive, which is why the company is targeting supply of seawater, not production of freshwater (although the engineer did mention the possibility of moving into freshwater production in the distant future). Once there is more conclusive data from the CETO II trials, I would like to take a decent position in CNM, as Australia moves towards water security, and a head-in-sand attitude towards recycled water sees a greater emergence of desalinisation.

Progress will be slow, with at least another pilot phase required after the final configuration of CETO II, and, eventually, CETO III. Does anyone have any reason why the SP will appreciate at more than a gradual accumulate? Am curious because my knowledge of this company is limited, and I may have missed an upcoming development that will impact the SP significantly (and I don't want to pay too much for my position). Any theories/expectations would be appreciated.

Thanks