Ann: Major USA Transaction Finalised, page-136

Posted the below over on a short term thread. Does anyone have anything to add/correct? The best info I could find as to production costs and margin were from a slide from an old presentation. If anyone has seen a more detailed study of research report etc I'd love to have a read. If they can take waste plastics and turn it into fuels at under 50c a litre then this is going to be a very lucrative company, especially given the fact that they aim to produce billions of litres annually.

STTCOMP IGE FA LONG
Industrial Technology (plastic to petrol)
MC $102m
SOI 416m (T20 hold 73%)
SP $0.245
CASH $718k ($143m loan facility with $10 drawn) ($US39.6m (AUD$57m) prepayment coming in Jan)

IGE have patented and award winning technology which allows them to produce road ready fuels (petrol, diesel) as well as industrial fuels and feedstocks (marine diesel, naphtha) from waste plastics. The technology significantly reduces carbon emissions. The technology allows for production of fuels at around 20-30c/litre and is expected to see them with a margin on production of around 65c/litre (presentation slide). End of life plactic is a major issue globally, IGE have a profitable solution to address it.



The recent jump in SP is attributed to the large USA transaction which is for a plant that will produce 420m litres of fuel per annum. At 65c/l margin this plant should produce gross margin of circa $273 million once operating at capacity. The prepayment of $AUD 57 million which is expected to be banked this month puts the company in a comfortable cash position, a major issue overcome in the short term.
The company have plastic to fuel plants in various stages around the world. The Amsterdam project currently in the commissioning stage is expected to online shortly and at capacity will produce circa 35 million litres of fuel

Outside of the USA and Amsterdam plants there are 18 other plants in progress. The combined output should all go ahead is 2,520,000,000 litres per annum, at a margin of 65c/l this represents a margin of around $1.6 billion annually so potentially scaling to be a very large company as these plants come online over the next few years.


Chart wise IGE have undergone a major move in the last few sessions which may take some time to consolidate however there is a strong case to suggest that the company remains undervalued given the scale of production that will come online over the next few years. The Amsterdam facility should be online in the next few months, the $57m prepayment should be in account in the next week or so and there will be further news flow from the 20 plants under construction/financing/negotiation.

The all time high sits at 67c, first major resistance at 37c and second at 45.5c, IMO these will all be tested this year, once the money is in the bank I would expect that the 37c target is well in reach