2 hour phone call to the company sec!!

i have just been on the phone to the company secretary (david) for the last near to 2 hours after my interest in this company was generated on the news last night and from the volume and price spike yesterday.

These are the points that i took from our conversation:

1. Anaeco's main income is from the gate keeping fees on landfill with the compost and energy being a secondary source of income that is likely to grow as government subsidies are introduced for providing energy to western power for renewable energy.

2. The compost that is produced is around 25000 tonnes a year and that they are looking at finalising a contract with Richbro on the completion of the 6th trail, basically it has met all the requirements thus far and they are going to be developing an additional machine to filter out non compostable items eg glass and thus, he said capital cost is minimal for this as is a basic sorting machine. We also covered the problem of contaminants in the compost eg pesticides but this does not appear to be a problem and the compost will be continually tested to meet the required standards limiting this risk. also due to the sheer volume harmful products would need to be in substantial quantity to effect the produce.

3. The trials have been successful and the company is in constant contact with Sinclair (SKM)the engineering company conducting the trails and that they have been performing thus far, each trial is simply them adding more waste into the equation to see the results. He thinks that the final report will be due out in December on the success of the trials as the 6th one begins on the 19th of october and takes 21 days to complete then normall takes 4 to 6 weeks for completion of the tests as the do all sorts of tests including growing a seed in the compost and seeing its development and the efficiancy of the plant and process. which he feels are all positive at present due to the performance of past trials.

4. The growth potential is what really got me excited, i mentioned to him the possibilty of exploring development to existing landfills to develop the plants which he said will be explored with more interest once the stage one trials are complete and on completion basically they are expanding the shenton park operation an then also developing the Geelong contracts. He mentioned Transpacific who are a major waste disposal company and how the technology if applied to landfil sites would lower their costs of operation and also extend the landfill life due to the fact that only 20% of the processed waste will go into landfill, this is a huge gain i feel for landfill companies and could extend some landfill lives by up to 10 years! Also the massive problem in the UK espicailly with landfill areas and the strict regulations there, i mentioned surely that other companies would be looking to solve this in a similar fashion which he confirmed but the anaeco solution is the only one that can do this in such a small area due to the technology they have developed. and as we know in the UK and EU the space issue is a major concern.

5. all these points mentioned espicailly the growth potential of the company need to be considered, they are all hinging on the success of the trials which from what i can gather are well on their way. i also spoke to him about the recent increase in volume and share price which he said he was not aware of any reason for this other than that people must be confident that the trials will be successful... i certainly think so and from the look of things the share price certinaly does not refelect the speculation that these trials will be successful based on the potential growth and expansion for the company on the finalisation of this report.

These are the main points we touched on, i hope you can take something away from all this, David was realistic person and was not expecting any rapid developments espicially when dealing with councils as we all know how slow the governement is at anything!! but rather continual growth in a society that is steering more and more toward renewable energy and solutions to waste management, which i feel anaeco have nailed on the head.

Enjoy