Chat with Bahay
All the answers are my interpretation of the conversation and may not be/represent the direct response from Bahay. ( pretty close though)
Questions
Q. New Acquisition – How does this get us into the Tier 1 Miners and Oil & Gas Companies?
- It’s a services business, we are building a products and materials business in Vic, acquisition is complimentary to the business being built in Vic. Now Parkway has a Products and Services business generating revenue. This gets Parkway closer to being the one stop shop for clients and introduce the new tech into conventional processes too.
- Revenue generating business gets you on the radar of analysts who generally don’t research companies without revenue and are only at the tech development stage( even though we are way past that with Pilot Plants, technoeconomic capability as well as design and build capability. Investment Funds will now see PWN on the radar and start to do research and valuations.
- Idea is to grow the business, employees and former owner are now aligned with PWN through employment agreements, potential to grow revenues from the combined services and products offering, potential to build bigger and better conventional offerings. The new Tech (aMES and iBC) are just the special additional services that no one else has that can be offered by Parkway.
- Main reason is to give Parkway credibility to its potential customers. Just like they raised funds to show our potential clients we are here for the long haul, this acquisition says, Parkway has a conventional water/waste water solutions business and some new tech to offer the market. Full solution based business with real people, real expertise and some real new tech.
Q. Conventional Products and Services business offering in Vic out of new premises.
- Compared Parkway to existing ASX listed stocks like De.Mem and SDV. Chalk and cheese. Even I could see that these businesses are just traditional businesses working in the conventional tech space and will never be able to exponentially expand or grow revenues like Parkway through its annuity style business model from new global leading brine remediation technology. Didn’t really need to know more.
Q. Water Industry Partnership ( Waste Water treatment plant, own and operate)
- Build Own Operate model
- Capital light
- I was most interested in this tonight.
- I asked if the royalties income was similar or better compared to the capital light model with clients. The answer depended on the client. Some clients want to own the plant, others don’t or can’t, not their core business. But on the main, royalties all go to the partnership where we own and operate, so we can expect even better revenues from this model. The clients just want the problem to go away and save them money so they are happy for PWN and their partner to share in the savings.
- It provides an alternative commercial model for our potential clients. As you can imagine, not all clients want to build a new plant and take on that plant, where as companies that normally own and operate these plants know what they are getting into ( Water Industry Player) and it’s part of their business model, expertise and success.
- This model creates value for the client and for Parkway and their new partner. It also provides a Turn key solution to the client problem, they just pay and get a solution, year in, year out. No sharing with the client in this model.
- Leads to a toll treatment option which lots of clients are prepared to pay for rather than owning a new bit plant that they had to go through approval processes to get the funding for. Shorter lead time to revenue it seems too. There are opportunities for $5m, $10 or $20m year revenue opportunities in this space. Now we can see why they need their own General Counsel, because all these new opportunities require different commercial/legal deals.
- I was trying to determine which industry this would be targeted towards but it seems that there are plenty, energy industry, Oil & Gas and CSG. They are having discussions with potential clients, opportunities for toll treatment, optioneering these plants to see if they can get even smarter and create shorter pay back periods.
Q. Recent Technoeconomic Studies and Models and presentations.
- Prelim study for Major Global Energy Co, tried to guess aMES or iBC, I think iBC in the upstream oil & gas production space.
- Spoke to him about the Sunday night board meetings and calls for this presentation. It’s just what they do when the have to, they are on a mission, they are not just lounging around collecting salaries.
- I told him that I thought iBC would come first because the Oil & Gas clients are just that more focused on environmental outcomes compared to their potential mining clients. He agreed that Oil & Gas clients are more sensitive about this subject but that the miners were equally focussed on the solution that Parkway was presenting. Didn’t say yay or nay to iBC coming first. Read into that what you want, I have my personal feelings about it.
- They are being asked by the clients to tweak the offering by adding in something else, or taking away something else, all to see what the process and outcomes do to their carbon footprint. This is a great sign in my opinion because the clients can see that PWN give them options and an even greater opportunity to reduce their CO2 emissions and carbon footprint.
Q. Lion Bay sell down.
- I didn’t like the on market sell down. Neither did he. I asked if they were committed to the long term with their remaining holding and he says yes, they absolutely are.
Q. Biggest holder in Parkway is Bahay.
- yes, through his Activated Logic holding(Top 20), 50m partly paids, his options and the shares he bought on market in his own name that don’t show up on the Top 20 Register. He was pretty fired up about my questions on this topic and it only showed to me how passionate he is about his holdings and leading this revolutionary company.
Q. Fidelity Chairman resignation
- Shows the market where his intentions lie and where his focus is. Man on a mission.
Q. Seismic Guy questions.
- We did talk a little about Vic Uni, mainly about PFAS as the company I work for does work in this space and I have my feelings about it and where the tech is heading. We spoke briefly but thought there were some other things we needed to discuss before getting to the end of my 1 hour allotted time. Sorry.
- Some of the feedback on working with VU is that there is govt exposure here and the Vic govt can see that some good work is coming out of this research. Opportunities to work with Vic uni on market offerings but didn’t discuss what they were.
Q. Technoeconomic Studies and Presentations and Proposals.
- I asked just as someone asked on HotCopper, has any organisation that Parkway has spoken to/presented to about aMES or iBC, said no thanks and walked away.
- ANSWER. Categorically not one has said no thanks and walked away. Never have they received any negative feedback about the tech and the results of the studies. All positive.
- There is no lack of urgency on the part of the prospective Global Tier 1 Miners or the Global Oil & Gas companies, in fact they are excited. Main discussion points are the delivery of the new tech and the delivery/commercial model. Having the Water Industry partnership just provides the clients with another model and option.
Bahay has 100% confidence that they will conclude a deal with these clients.
It was a great, open, frank conversation. I was able to ask some difficult questions and he was very forthright and confident in his responses. I get where Parkway are at, I get what they are doing and what it takes and he appreciates that and is happy to continue to talk to me.
I can only say that I am very happy with where Parkway are at. At year’s end, I personally can’t see PWN being less than 5 cents and I think it will be as high as or higher than 10 cents. Acquisition will be growing, iBC/aMES deal(s) will be signed on the dotted line.
All in my opinion of course and you should always do your own research but I am happy to be the conduit to Bahay and the team.
Cheers
Mr M.