licensing with ergo may be painfulinthefuture, page-2

RC1

That is such a tired and flawed argument.

So, franchising within the Australian business landscape is doomed?

LNC has spent probably well over $100 mill and has just raised another $80 mill and has no proven technology to show for it.

CNX has probably spent $50 mill and and is spending at quite a current click and has no proven technology to show for it.

Both companies could spend three times current expenditures and still be no nearer a working UCG technology. To be fair, one or both of them might hit the jackpot with their current/next gasifier trials .... or not.

When/if one or both succeed in developing a workable UCG technology, there is absolutely no guarantee it will be any better than Ergo's working UCG technology ... it could indeed end up being less efficient or reliable or both. Again, to be fair, it could be the other way.

When/if either company finally develops a working UCG technology that may or may not be more efficient and/or reliable than Ergo's, they then have to develop, get planning approval, construct and commission their stated and preferred commercialisation ... liquids for LNC and fertiliser for CNX. There could be a minimum 5 yrs or more tied up in this stage.

On the other hand, whilst all of the above has been played out over the past 2-3 yrs, Cougar has spent almost 100% of their efforts on fine tuning their long term, unwaivering powergen commercialisation model ... every deal/MOU bar Wandoan is focussed on powergen and syngas to suit.

Cougar's spend has been a fraction of that of LNC/CNX and because they are not trying to reinvent the UCG wheel, their efforts are directed on the business of UCG, not the technology.

Whatever the fees payable to Ergo are, they are embedded in the financial models reported to date that all have attractive ROI after technology payments. The logic of Ergo fees being so high as to kill the commerciality of the syngas the technology delivers is simply ridiculous imo.

Cheers
Dex