VIROTEC INTERNATIONAL LTD ABN 81 004 801 398 PO BOX 188 SANCTUARY COVE QLD 4212 AUSTRALIA www.virotec.com 22 February 2005 SHAREHOLDER UPDATE As a leader in the development and commercialisation of sustainable, environmental technologies, Virotec International Ltd (Virotec) (ASX/AIM: VTI) remains focussed on delivering its platform technologies through its tailored business streams, which include (amongst others) the ViroProduction, ViroFlow, ViroSewage, ViroMine, ViroSoil and ViroConcrete market segments. The Directors of Virotec are pleased to provide a brief update to shareholders on a selection of what they believe to be strategically significant activities. HYDRODEC TECHNOLOGY SALE As a result of the sale of Virotec’s HydroDec technology, Virotec holds an equity position of 60 million shares in the newly established HydroDec Group plc (“HydroDec”) (AIM:HYR); the value of which has increased substantially as a consequence of HydroDec’s strong performance. The market value of Virotec’s shareholding in HydroDec is approximately $AUD 40 million as of 21 February 2005. VIROMINE Laos Contract Lane Xang Minerals Limited, a subsidiary of the international mining company Oxiana Resources Limited, have entered into a $AUD 350,000 agreement for the supply of ViroMine technology at the Sepon Gold Mine in Savannakhet Province, Laos. Following a site visit by Virotec, the company has agreed to implement a ViroMine Acid B Extra™ pit lake treatment and a ViroMine Acid B Extra™ permeable reactive barrier to assist in the protection of local rainforest. A further ViroMine Terra B™ shotcrete application will also be trialed by the company. US EPA testing at Gilt Edge mine Virotec recently received the fourth year of outstanding results from ongoing testing by the United States Environment Protection Agency at the Gilt Edge Mine, a Superfund remediation site, where the long term efficacy of ViroMine™ technology is being assessed on acid rock leachate passing through a ViroMine™ permeable reactive barrier. The measured concentrations for fourteen of the fifteen metal contaminants continue to be below the detection limit for the procedure used. Iron, the fifteenth contaminant, measured just 210ug/L (this compares to the control measurement of 21,000,000ug/L taken in 2003 from the untreated acid rock leachate). Testing for Total Dissolved Solids (TDS), Sodium and Sulfate reveal consistent ongoing reductions with each passing year. The complete table showing unprecedented four year results from the Gilt Edge mine can be viewed at www.virotec.com/viromine.htm. VIROTEC INTERNATIONAL LTD ABN 81 004 801 398 PO BOX 188 SANCTUARY COVE QLD 4212 AUSTRALIA www.virotec.com VIROFLOW Virotec is now positioned to aggressively pursue commercial opportunities in three different ViroFlow markets as a result of the strong performance of the following ViroFlow reagents; ElectroBind™, ViroPhos™ and ViroBind™. Advance Plating In the USA, Virotec recently installed a significant treatment facility (annual contract value, $AUD 65,000) into Advance Plating, a Boston, Massachusetts plating company, where, after three months of operation, ElectroBind™ has exceeded all treatment expectations. Market analysis indicates there are over 10,000 electroplating facilities in North America and, as a result, the company is currently formulating an expansion plan for North American operations. The success in North America follows a range of commercial cont racts for ElectroBind™ in Australia, including metal finishers located in in Melbourne and in Brisbane. Colgate-Palmolive After a substantial trial period in which Virotec was asked to prove the efficacy of its new ViroPhos™ reagent, Virotec has formally entered into a two year license with Colgate-Palmolive in Australia to ensure that they meet stringent requirements for the removal of Phosphorous and suspended solids from its industrial effluent. The annual contract value is $AUD 35,950. Koppers Wood Products Treatment of timber logs begins with a steaming process which opens the cells for a chemical treatment, known as CCA, which involves adding copper and arsenic to protect the timber from insect and fungal degradation, and chromium to chemically seal the copper and arsenic into the timber. Virotec has recently expanded its ViroBind™ capabilities from the treatment of CCA leachate to the more extensive problem of CCA solids. As a result, the company has been awarded a 2 year contract for leachate management (annual contract value, $AUD 17,000) and a further contract for solids treatment with Koppers Wood Products in Tasmania. VIROPRODUCTION (Product manufacture utilising Basecon™ & Bauxsol™ Technologies) Growing Product Range Virotec continues to develop its multi -faceted Bauxsol™ Technology platform through effective collaboration with potential end-users. The collaboration begins as early as possible in the development phase to extract the greatest benefit possible from the collaboration and our efforts focus on addressing pressing needs. Today, Virotec is in various stages of technology/product development in approximately 18 different commercial market sectors and this has resulted in the development of over 150 product blends. Asia As a result of our strategic relationship with Hatch Associates, Virotec has been retained to asses the viability of introducing Basecon™ technology to several alumina refineries in Asia. Initial laboratory evaluations will assess Basecon’s effectiveness at neutralizing and stabilizing the hazardous red mud produced from varying Bayer and Sinter processes. VIROTEC INTERNATIONAL LTD ABN 81 004 801 398 PO BOX 188 Europe Virotec has purchased a parcel of land close to the Eurallumina SPA refinery in Sardinia, as a result of continued successful utilisation of Basecon™ technology on part of the waste stream from the Eurallumina refinery, for the purposes of Bauxsol™ production, and increasing demands for Virotec reagents. Planning is well developed for a new, continuous production facility which will be built on the site. Various funding models are currently being evaluated. North America Virotec has entered into an arrangement for the initial supply of 100,000 tonnes of alumina refinery residue in North America. This arrangement ensures an economic source of supply of raw material suitable for Basecon™ conversion to Bauxsol™ raw material for the expansion of Virotec’s North American operations. VIROSEWAGE WRc independent study Virotec has recently retained the Water Research Centre based in Swindon, United Kingdom (WRc) to independently assess the effectiveness of its ViroSewage™ reagent as a passive ViroFilter™, an end of pipe solution for the extraction of Phosphorous from municipal waste water. The company anticipates that the research will be conducted over a six month period. This is an alternative application of the active dosing ViroSewage™ technology and will enable Virotec to access a broader market with its ViroSewage™ products. VIROCONCRETE Virotec has entered into a joint venture arrangement to secure external funding of £150,000 research at the Queens University, Belfast to complete 15 months of testing on the mechanical and durability properties of ViroConcrete™ for use as both a structural concrete and shotcrete. The funding is being provided by way of a convertible note, and on completion of testing, the JV participant will have the rights to commercialise the technology and convert to 40% of the expanded capital. Subject to a satisfactory outcome, we believe that the testing will provide all the independent trials and assessments necessary for Virotec to commercialise the technology. FINANCIAL REPORTING Virotec’s half yearly financial report for the 6 months ended 31 December 2004 is expected to be published on or about Thursday 24 February 2005. If you require further information please contact Virotec, on telephone +617 5530 8014, by email to [email protected] or visit our website at www.virotec.com.
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