REG - Active Energy Group - Update on the Ashland Facility

Active EnergyAnnouncement

26/01/2024 07:00

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RNS Number : 9835A  Active Energy Group PLC  26 January 2024

Prior to publication, the information contained within this announcement was
deemed by the Company to constitute inside information for the purposes of
Article 7 under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With
the publication of this announcement, this information is now considered to be
in the public domain.

 

26 January 2024

 

Active Energy Group Plc

("Active Energy" or the "Company")

Update on the Ashland Facility

 

Active Energy (AIM: AEG, OTCQB: ATGVF), the international biomass based
renewable energy business, is today updating shareholders on the status of
future production at the CoalSwitch® fuel reference plant being constructed
at Ashland, Maine (the "Ashland Facility") by Player Design, Inc. and its
associates ("PDI").

 

Since the Company's announcement on 20 November 2023, Active Energy has been
in discussions with PDI and its associates in an effort to understand and
resolve construction issues announced on that date and to secure commitments
from PDI delivery dates of CoalSwitch® fuel. The Company's announcement of
20 November 2023 followed a series of delays at the Ashland Facility which the
Company has previously disclosed and are summarized in the Appendix to this
announcement.

 

To date these discussions have proven to be unproductive and PDI has now
informed Active Energy that PDI is no longer willing or able to commit to
either: i) a future production date for CoalSwitch® fuel; or ii) future
production volumes of CoalSwitch® fuel. This recent development is hugely
disappointing for Active Energy, who have several potential customers lined up
to receive CoalSwitch® fuel at the earliest opportunity.

 

The Company retains ownership of some of the production equipment and
components being used in the construction of the Ashland Facility. The book
value of this equipment currently situated at Ashland was, as of 30 June 2023,
valued at $1.5m.  Additionally, Active Energy has contributed the cash sum of
$1.1m towards the development of the Ashland Facility and prepaid PDI a
further $300,000 for future services.  The Board is now seeking the immediate
return of these cash balances and has retained legal counsel in the United
States to investigate and advise in regard to all of Active Energy's rights
and remedies.

 

Throughout 2023, Active Energy has been actively marketing CoalSwitch® fuel
to a range of potential customers, including companies operating in the pulp
and paper, cement, and power generation industries. These conversations have
reinforced the Board's view that there is significant market appetite for
CoalSwitch® fuel. Notwithstanding the production delays and the failure of
PDI to produce CoalSwitch® fuel at the Ashland Facility, this customer
interest remains, and the Board is now looking for the most expedient way to
commence CoalSwitch® fuel production, using its proprietary technology in
North America or Southeast Asia. Since the announcements in the Interim
Results in September 2023, Active Energy has focused on improvements to both
CoalSwitch® fuel and the production processes.  The Company had announced,
at that time, a working partnership with Omega Thermal Solutions Group LLC,
based in the US, to develop a new manufacturing process and create variants of
CoalSwitch® fuel focusing on a torrefaction production process. The improved
performance metrics, such as higher fixed carbon content allows these
biocarbon fuels to participate in the growth markets such as soil amendments,
air filtration, ferro silicon and the metallurgical steel industries. This
product development, assisted by the recently appointed US management team is
opening new revenue opportunities. Once the Company has received the monies it
is owed by PDI, it will have sufficient cash resources to progress the next
stage of its strategy.

 

Michael Rowan, CEO of Active Energy, commented:

 

"The actions of PDI are as surprising as they are disappointing after a long
journey toward the production of CoalSwitch® fuel, especially given the fact
that Tyler Player is a shareholder of Active Energy. The Board is taking swift
and decisive action in the interests of our shareholders to minimize the
impact, and to actively investigate and pursue all available claims arising
from Active Energy's dealings with PDI over the last 3 years. Shareholders
should be rest assured that we are taking all the necessary steps to protect
Active Energy's current and prospective interests.

 

"Based on the continuing strong product interest from potential customers, the
Board is confident in the significant future commercial opportunities for
CoalSwitch® fuel, notably both in North America and Vietnam, and is
encouraged by the ongoing discussions and evaluations currently being
undertaken by several alternate commercial production partners. The
shareholders will be updated with these developments at the earliest
opportunity."

Enquiries:

 Active Energy Group Plc        Michael Rowan (Chief Executive Officer)                                 info@aegplc.com

                                James Leahy (Non Executive Chairman)
 Allenby Capital Limited        Nick Naylor/James Reeve/Daniel Dearden-Williams (Corporate Finance)   Office: +44 (0)20 3328 5656

 Nominated Adviser and Broker   Amrit Nahal (Sales/Corporate Broking)
 Camarco                        Tom Huddart / Emily Hall / Lily Pettifar                              aeg@camarco.co.uk

 Financial PR Adviser                                                                                 Office: +44 (0)20 3757 4980
 Scoville PR                    John Williams                                                         jwilliams@scovillepr.com

 US PR Adviser

 

 Website         LinkedIn                                Twitter
 www.aegplc.com  www.linkedin.com/company/activeenergy   https://twitter.com/aegplc (https://twitter.com/aegplc)

                                                        @aegplc

 

About Active Energy Group

Headquartered in London with operations in the United States, Active Energy
Group plc (AIM: AEG, OTCQB: ATGVF) is an international biomass-based renewable
energy company focused on the production and development of next generation
biomass and biocarbon products that have the potential to transform coal fired
power and heavy industries and the existing renewable biomass industry.

 

Active Energy has developed a proprietary technology which transforms waste
biomass material into high-value renewable fuels. Its patented product
CoalSwitch® is a leading drop-in biomass renewable fuel that can be blended
and co-fired with coal at any ratio without requiring significant plant
modification or wholly replacing existing biomass fuels.

 

 

Appendix

Chronology of Development updates supplied to the Company by PDI

Since July 2022, PDI has missed a series of production deadlines for the
delivery of CoalSwitch® fuel to Active Energy.

·    In July 2022, PDI assumed the role of production partner for
CoalSwitch® fuel and agreed first production volumes would commence at the
Ashland Facility during the first quarter of 2023.

·    In January 2023, the Board was informed by the CEO of PDI that
construction would be completed before the end of Q1 2023, and first
production volumes would commence early in Q2 2023.

·    In March 2023, PDI confirmed that initial production volumes were
targeted at an annualised rate of 35,000 tons per annum, but delays in the
issuance of relevant construction and air permits for the Ashland Facility
created consequential construction delays toward the end of Q2 2023.

·    In May 2023, the Company announced that it had now been informed by
the CEO of PDI that the Ashland Facility could only be completed in Q3 2023
owing to continuing construction and component delivery delays.

·    In September 2023, Active Energy announced that PDI was continuing to
have component and construction issues at the Ashland Facility but
nonetheless, the CEO of PDI believed that production of CoalSwitch® fuel
could commence in late November 2023.

·    In November 2023, the CEO of PDI informed AEG that the Ashland
Facility could only commence operations by the end of Q4 2023 at the earliest
and that production of fuel volumes for customer delivery would only commence
in Q1 2024. On 20 November 2023, the Company announced that it had been
informed by PDI that there were continuing construction and engineering delays
at the Ashland Facility, and, as a result, the Board of Active Energy had
concluded that it no longer had confidence in any of the time estimates
provided by PDI for the delivery of CoalSwitch® fuel from the Ashland
Facility.

 

 

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