Half Yearly Report and Accounts
Perth, Mar 15, 2016 AEST (ABN Newswire) - The Directors present their report on Altech Chemicals Ltd (
ASX:ATC) for the half-year ended 31 December 2015.
REVIEW OF OPERATIONS
On 29 June 2015, the Company released the results of its Bankable Feasibility Study (BFS) for the development of a 4,000tpa high purity alumina (HPA) manufacturing plant at Tanjung Langsat, Johor, Malaysia. The financial and technical outcomes of the BFS were compelling, they included total estimated capital cost for the project of US$76.9 million, project net present value of US$326.1 million (10% discount rate), annual revenues at full production of US$92.0 million and annual EBITDA at full production of US$59.4 million (refer ASX Announcement dated 29 June 2015 for complete details and key assumptions of the BFS).
During the half-year ended 31 December 2015, the Company made important progress towards the proposed development of the HPA plant by significantly advancing its efforts to secure project finance. In December 2015, the Company announced the execution of an exclusive mandate with German KfW IPEX-Bank GmbH (KfW-IPEX), a wholly owned subsidiary of the German promotional bank KfW, to provide advisory and structuring services in relation to senior debt project financing. The mandate with the bank contemplates financing that will maximise the use of German Export Credit Agency (ECA) insurance cover under the German government backed project finance export credit scheme, an instrument for the promotion of German exports which provides cover to bank lenders to insure against the risk of a project loan. The scheme is administered by Euler Hermes Aktiengesellschaft (Hermes), the German export credit agency. Furthermore, in mid December 2015, the Company announced that following a presentation by the Company, KfW-IPEX and its German based advisers to Hermes in Hamburg Germany, that it had received a Letter of Interest (LOI) from Hermes confirming its in principal support for the HPA project. The availability of ECA insurance cover and the securing of debt financing for the HPA project each remain subject to detailed due diligence, which commenced in January 2016. Whilst there is no guarantee for the completion of debt financing or ECA cover, the Company is encouraged by the interest shown in the HPA project by the highly experienced and well regarded KfW-IPEX and Hermes.
Other significant developments during the half year included:
- Malaysian company Melewar IIC Limited (Melewar) invested $1.0 million via the subscription to 16.9 million fully paid ordinary shares of the Company, which completed in October 2015. Melewar is now the second largest shareholder, holding approximately 11% at 31 December 2015;
- His Royal Highness Prince Ya'acob bin Tunku Tan Sri Abdullah of Melewar joined the Board as a non-executive director, and Mr Uwe Ahrens (also from Melewar IIC Limited) was appointed as his alternate director. The combined experience of Prince Ya'acob and Mr Ahrens in building businesses in Malaysia will be important to the Company's plans for the construction and operation of its HPA plant;
- The execution of a sales and distribution agreement with Mitsubishi Corporations Australian subsidiary, Mitsubishi Australia Ltd (Mitsubishi), appointing Mitsubishi as the exclusive seller and distributor of the Company's proposed high purity alumina production into the Japanese market;
- A 4Ha site was reserved within the Tanjung Langsat Industrial Complex, Johor, Malaysia for the Company's HPA plant;
- Dr Jingyuan Liu, a highly experienced chemicals engineer, was appointed as General Manager Operations. Dr Liu will manage the detailed design, construction, commissioning and transition to steady state operation of the Company's proposed HPA plant;
- The Company optimised the location of the kaolin beneficiation circuit for the HPA project. Kaolin beneficiation will now be located in Malaysia rather than Meckering, Western Australia, thereby reducing both capital and beneficiation operating costs;
- A kaolin mining rights agreement for bulk kaolin was finalised with Dana Shipping and Trading S.A. (Dana) on 28 October 2015. The agreement granted Dana the exclusive right to mine up to 10mt of bulk kaolin for a $1.0 million cash payment to Altech and a 2% gross sales royalty on all bulk kaolin sales. The right was subject to the grant of ML70/1334 within 3 months of the date of the agreement (First Condition) or the grant of any alternate mining licence that provides Dana with access to bulk kaolin within an area of exploration licence EL70/3923 within 9 months. If the First Condition had not been satisfied by the First End Date (28 January 2016), then either party may terminate the mining rights agreement by notice to the other. On 9 March 2016, subsequent to the half-year end, the Company announced that it had terminated the agreement with Dana.
To view the half year report, please visit:
http://media.abnnewswire.net/media/en/docs/ASX-ATC-756474.pdf
About Altech Batteries Ltd
Altech Batteries Limited (ASX:ATC) (FRA:A3Y) is a specialty battery technology company that has a joint venture agreement with world leading German battery institute Fraunhofer IKTS ("Fraunhofer") to commercialise the revolutionary CERENERGY(R) Sodium Alumina Solid State (SAS) Battery. CERENERGY(R) batteries are the game-changing alternative to lithium-ion batteries. CERENERGY(R) batteries are fire and explosion-proof; have a life span of more than 15 years and operate in extreme cold and desert climates. The battery technology uses table salt and is lithium-free; cobalt-free; graphite-free; and copper-free, eliminating exposure to critical metal price rises and supply chain concerns.
The joint venture is commercialising its CERENERGY(R) battery, with plans to construct a 100MWh production facility on Altech's land in Saxony, Germany. The facility intends to produce CERENERGY(R) battery modules to provide grid storage solutions to the market.
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