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A POTENT AGRICULTURAL MIX THAT CAN RECLAIM DESERT

Sydney - Monday - November 10: (RWE Aust Business News)
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OVERVIEW
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At the end of October a small company called Soil Sub
Technologies (ASX:SOI) was pulled up by the ASX over a significant share
price movement - from a low of 20c to a high of 57c.
The ASX noted that the company lodged a statement around the same
time about its biodiesel project update under the licence agreement with
Timms Cho Group Ltd in China.
Soil Sub Technologies also announced a deal with a Middle East
group.
The company told the Exchange that it did not believe either of
the announcements would have affected the price rise, or the increase in
volume of securities traded on October 27.
However, it later admitted that anticipated revenue from the
quarter was less than that reported due to the delay in the receipt of
royalties from the China contract.
It advised the revenues from China would be deferred until after
the Chinese winter.
This meant that revenues and expenses would not substantially
match its anticipated revenues and expenses.
The company has arranged to raise an additional $2.5 million
capital by mid January subject to shareholder approval.
Directors say the company is continuing to pursue its business
objectives and strategies and believes it is making excellent progress.
The only setback to date has been a timing issue relating to the
royalties due from Timms Cho Group.
Last week, Soil Sub Technologies signed a heads of agreement to
use its NutriMix product in a major desert reclamation project in China.
The agreement also provides for Soil Sub to provide technical
expertise and be involved in the management of the project.
The deal is with the Timms Cho Group, which has signed a
tripartite agreement with two large Chinese companies that requires the
use of NutriMix in a desert reclamation project west of Beijing.
The Timms Cho tripartite agreement relates to the reclamation of
400,000 hectares of desert using NutriMix and provides for an initial
trial area to be treated.
Subject to a successful trial, Timms Cho plans to apply for a
grant under a $US6 billion grant scheme which has been approved by the
Chinese Government to fund the reclamation of the desert.
Chairman Graeme Scott said the signing of the agreement was a
very significant development for Soil Sub in the commercialisation of its
products and technology.
The NutriMix product range has been progressively developed by
the company since 2001.
The growing medium is derived by the mixing to a formula of
organic products which include the by-products of sugar and palm oil
production.
In excess of 100 million tonnes of waste product is produced
annually worldwide by the sugar industry alone, according to the Sugar
Industry Year Book 2005.
To achieve its initial sales targets the company requires less
than 1 per cent per annum of this waste.
Depending on the formulation applied, the product can be used as
a complete soil substitute, as a mulch, as a potting mix, or can be mixed
with other mediums for adaptation to grow most types of vegetation.
NutriMix has the benefit of high moisture retention resulting in
substantial water savings, a complimentary level of slow release,
organic, plant available nitrogen and has been shown to provide
outstanding growth for all types of plants.
Independent tests and trials have been carried out to establish
that NutriMix is a product that can deliver substantial advantages to its
users.
The NutriMix growing medium offers the only known patented
complete organic growing medium/soil substitute that is transportable
across international borders (subject to individual country legislation).
The company holds patents for the formulae and use of the raw
materials derived from the processing of sugar cane and palm oil to form
the product.

SHARE PRICE MOVEMENTS
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Shares of Soil Sub Technologies on Friday slipped 2c to 17c.
Rolling high for the year to date is 95c and low 16.5c. The company has
50.1 million shares on issue with a market cap of $8.7 million.
In September, Soil Sub Technologies appointed Terence Timms as
the managing director of the company.
Mr Timms had been serving as a non-executive director on the
board of Soil Sub Technologies and is currently chairman of the Timms Cho
Group, a company with extensive interests in China.
Mr Scott said that Mr Timms's wealth of global experience means
he is very well placed to provide the company with great insight into
industry-related issues and the management requirements of the company.
He was instrumental in helping Soil Sub Technologies to forge its
strong and fruitful relationships in China.
Previously, Mr Timms was the Asia Pacific Vice President for
Operations of Mincom Ltd, which is Australia's largest provider of
specialist services to global mining.
He has had extensive executive mining experience throughout
Australia, South America, South Africa, Chile and the US working with
companies such as BHP Billiton, Western Mining Corporation, and Rio
Tinto.
In August, the company released its preliminary final report for
the year to June 30 in which it emphasised a number of key events for the
year.
Most significant of these were the signing of the first
commercialisation agreement for NutriMix and listing on the Australian
Securities Exchange.
The company ratified a licence agreement, with an initial term of
10 years, with Timms Cho Group to distribute NutriMix in China, Taiwan
and Macau.
The agreement is automatically renewable for two further periods
of five years each, subject to meeting the minimum performance criteria
imposed on Timms Cho Group.
Under the terms of the licence agreement a fee of $US5 million is
payable to the company.
The licence fee is payable by six equal instalments of $US830,000
on a six-monthly basis in arrears, with the first payment due the later
of six months from the date of the first planting, or 12 months from the
date of the licence agreement is ratified.
Preparation of land and the propagation of seedlings is under way
in respect to the first planting relating to the bio-diesel project. The
first licence fee instalment is still expected in early 2009.
The first project under the agreement with Timms Cho Group is for
the use of the product in a Chinese government sponsored bio-diesel
project in the Jiangxi province.
Ongoing royalty fees of $US62.50 per hectare of planting under
the biodiesel project are also payable.
A minimum performance criterion of 100,000 hectares for each of
the first four years of the licence is included in the agreement.
The royalty is payable upon completion of planting of every
100,000 hectares.
The first 100,000 hectares is expected to be planted by December,
meaning that the first royalty payment of $US6.25 million is due to be
received by the company in December.
On May 14 the company announced the execution of a contract for
the sale of additional NutriMix product into China under the Timms Cho
Group licence.
Sales under the extension relate to bulk sales to the
horticulture and landscape market as well as packaged product for retail
distribution. Under the extension the company will receive a royalty of
7.5 per cent of gross sale.
Revenue of $2.85 million is expected in the first year, rising to
$4.5 million per year at current expected volumes.
It is anticipated that volumes will further increase in future
periods.
Soil Sub revenue from sales licence and royalties was $5.2
million for the year to June 30.
The group delivered an EBITDA before non-recurring items of $2.8
million for the year compared to a loss of $1.3 million for the previous
corresponding period and net profit before non-recurring items for the
year was $900,000 compared to a loss of $1.2 million in the previous
year.

BACKGROUND
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Soil Sub Technologies Ltd was listed on the Australian Securities
Exchange on March 27.
Since 2001, the company has completed the development of
NutriMix, a highly water retentive, nutrient efficient fully organic
growing medium.
It has developed intellectual property rights including patents
enabling it to manufacture and market NutriMix, and has commenced
international commercialisation of the product with the signing of the
licence agreement in China, in addition to initial sales in Australia.
NutriMix is manufactured from renewable waste resources produced
by the processing of other agricultural products which are available in
abundance in many parts of the world.
The efficacy of NutriMix has been shown in independent
international trials, while the commercial utility has been demonstrated
in the company's first licence agreement in June 2007 for the use of the
product in a Chinese government sponsored bio-diesel project in the
Jiangxi province.
Soil Sub Technologies believes it is set to change international
agricultural and horticultural practice with NutriMix.
Features of the product include:
* An environmentally friendly growing medium;
* Manufactured from agricultural waste products - a renewable
resource;
* Proven and tested growth with high water-management
capabilities and complimentary nutrient profile; and
* Readily available worldwide.