Level 7, 530 Little Collins Street, Melbourne Vic, 3000 Australia | Phone +613 9909 7684 | www.ectltd.com.au | ABN 28 009 120 405 Listed on the Australian Stock Exchange (ASX:ESI) Underwriting and Project Financing Secured 24 December 2013: Environmental Clean Technologies (ECT or Company) (ASX:ESI) is pleased to announce that it has signed a Terms sheet with finance providers The Lind Partners LLC, Manager of The Australian Special Opportunity Fund, LP (together, Lind) and Australian Investment house Peloton Capital that covers the following: ! The proposed full underwriting of the planned new issue of listed options, as recently approved by shareholders at the company's AGM on 29 Nov 2013 ! A $A20 million line of trade finance, for the specific use of supporting the company's planned Coldry Commercial-scale Demonstration Plant (CDP) projects in Australia or India. Details are outlined below. Coldry Demonstration Plant project As previously announced, the Company has completed its detailed engineering works that will deliver the construction of a CDP project of 170,000 tonnes per annum capacity. This project has two targets, both of which continue to progress – one in Australia’s Latrobe Valley, and one in India. A detailed vendor development program has now commenced, with the assistance of India’s YES Bank. This is aimed at securing a plant & equipment provider for Coldry projects worldwide, who would also be capable to playing a constructor role in India. A detailed review was undertaken, with subsequent interviews of eleven international standard EPC contractors in India being carried out in recent weeks. Efforts continue to secure the full range of funding required to advance the project in either location, and this announcement includes the securing of an important element of that portfolio of project financing. Figure (above) – Coldry Commercial-scale Demonstration Plant Underwriting Lind and Peloton Capital will provide commitments of up to a total of $2 million towards the planned new options series issue and Peloton Capital has agreed to provide marketing support to the offer. The Prospectus for the new options series is currently being developed per the outline under Resolution 7 in the Notice of Meeting issued on 28 October 2013. The underwriting fees consist of the following: ! 5% fee for the underwritten amount. ! 20 million new options Full and binding agreements will be developed in the coming weeks, ahead of the planned issue of the prospectus on 17 January 2014. The full terms and conditions, when finalised, will be incorporated within the prospectus. Under certain circumstances a break fee will be payable by ECT if it elects not to proceed with the contemplated funding package. The Underwriting arrangements, which cover more than 95% of the full issue as now envisaged, will be supportive of the successful execution of the new options program. Trade Finance Line Lind will also provide up to $A20 million for use by the company in its planned Coldry Commercial-scale Demonstration Plant (CDP) projects. As previously announced, locations for the project have been developed for both the Victorian and Indian markets. The finance line will only be available to directly support the CDP, and will not be accessed for general working capital. Agreement on disbursement timing and sizes will be made following the securing of an agreement for partnered financing from a Coldry project partner sufficient to meet the balance of the total project finance requirements. The Trade Finance line will be secured through the company's equity, and structured according to the disbursement program required to support the project development. Once in place the company will have certainty of funding provision, along with flexible, marketcompetitive exit mechanisms in the event that better terms of financing are available at the time of initiating a project. The detailed agreements of the Trade Finance facility will be completed in the coming weeks, and further detail released to the market as noted above. Strategic Alignment The CDP is the next and most significant advancement for commercialisation of our Coldry technology. Lind has worked extensively over the last few months with the company to design a funding program that suits ECT’s needs. This has culminated in a bespoke facility to further support ECT’s project financing capabilities. Managing Director, Ashley Moore stated, "The capital challenge associated with delivering on our CDP objective is complex. This new Trade Finance facility is directed solely towards that objective and secures an important part of the portfolio of finance needed to deliver the CDP. Successful delivery of the CDP will result in a ready-to-license Coldry technology, and a move to a revenue generating footing for the company. We continue to develop solid lines of inquiry around additional sources of capital towards this objective, including engagement with those parties who have previously expressed an interest in participating in the CDP.” About Lind Partners The Lind Partners LLC is a New York-based alternative asset management company and manager of the Australia Special Opportunity Fund, LP. Lind selectively invests across a broad range of industries and economic environments with a focus on companies with market capitalisations ranging between $A25 million and $A1 billion having definable milestones and key inflection points that have the potential to create considerable shareholder value. For further information contact: Ashley Moore – Managing Director +61 3 9909 7684 or [email protected] About ECT ECT is in the business of commercialising leading-edge coal and iron making technologies, which are capable of delivering financial and environmental benefits. We are focused on advancing a portfolio of technologies, which have significant market potential globally. ECT’s business plan is to pragmatically commercialise these technologies and secure sustainable, profitable income streams through licencing and other commercial mechanisms. About Coldry When applied to lignite and some sub-bituminous coals, the relatively simple Coldry beneficiation process produces a black coal equivalent (BCE) in the form of pellets. Coldry pellets have equal or superior energy value to many black coals and produce lower CO2 emissions than raw lignite. About MATMOR The MATMOR process has the potential to revolutionise primary iron making. MATMOR is a simple, low cost, low emission, production technology, utilising the patented MATMOR retort, which enables the use of cheaper feedstocks to produce primary iron.
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