Active Energy PLC’s (LON:AEG) has been encouraged by the “substantive nature” of discussions with potential off-take partners in Europe and Asia in recent weeks.
The renewable energy and forestry management business said the discussions have further increased its confidence in the scale of the commercial opportunities for its Coalswitch and SuperFuel technologies.
The company is currently performing due diligence on a covered factory space in Lumberton, North Carolina, and assuming it pulls the trigger on plans to purchase it, the group’s attention will then focus on installing the initial five tonnes per hour Coalswitch plant and generating revenues at the earliest opportunity.
The Lumberton site is fully permitted for operations and the permits can be transferred to Active Energy (AEG) upon completion of the purchase, thus reducing the time to market of the planned production of CoalSwitch.
The Lumberton Site also includes ancillary facilities, such as water treatment, an analysis lab, offices and IT hardware which AEG expect to be included in the proposed sale, thus reducing the amount of capital expenditure required for the site, AEG said.
Meanwhile, the board continues to assess longer-term international expansion opportunities, with a particular focus on Western Europe and South East Asia.
The company has received multiple expressions of interest from potential partners in Asia and the CoalSwitch technology is now being evaluated by a number of engineering, procurement and construction contractors to build CoalSwitch production facilities.
The board has received a number of approaches from a variety of industries regarding the possible application of its PeatSwitch technology, which produces a beneficiated, soil substrate product made from waste fibre.
The company's previously announced memorandum of understanding (MOU) with Young Living Farms (YLF) relating to PeatSwitch plant sales has not resulted in a definitive contract at this stage due to an internal strategic review at YLF.
On the forestry side, discussions regarding the group's MOU with Powerwood Canada continue to progress. Powerwood and AEG have commenced a process to allow financial due diligence by potential funders for the joint venture project in Alberta.
"The board sees the commercial introduction of CoalSwitch as the springboard for both product credibility and the catalyst for new prospective customers to sign for both new plants and for new off-take agreements. We have already generated considerable interest from a range of potential customers, partners and off-takers,” said Michael Rowan, the chief executive of Active Energy.
"Alongside the large-scale market introduction of CoalSwitch, we continue to advance our activities in Newfoundland following the grant of cutting permits in November 2018, with the objective of delivering cash flow in the near term.
"The AEG team is focussed on generating value for our shareholders and although there can be no guarantees, I firmly believe that the quality of our intellectual capital, our partner and customer relationships and our long term strategic focus will be reflected in excellent returns for our shareholders. This is a strategy which I believe will dominate our corporate development during the first part of 2019 as we chart a course towards achieving critical commercial milestones, revenue generation and corporate growth," Rowan declared.