CIELO ANNOUNCES APPOINTMENT OF ANDREA WHYTE TO BOARD OF DIRECTORS AND PROVIDES MCTO UPDATE

Ticker: CMC.V / CWSFF
Listings: TSX Venture Exchange / US OTC / Frankfurt
Website:https://www.cielows.com/
Market Cap: 374MCAD at time of publication
Share price: 0.58 CAD at time of publication
Industry: Converting waste to renewable fuel

Appointment of Andrea Whyte
Andrea Whyte is a Partner, with Osler, Hoskin & Harcourt LLP (“Osler”). Ms. Whyte’s practice
focuses on corporate finance, mergers and acquisitions, corporate governance, executive
compensation and general corporate matters.
Andrea’s leading expertise has been recognized by Chambers, Lexpert, International Financial
Law Review (IFLR) and Best Lawyers. Andrea is also a director of several non-profit and private
companies.


Ms. Andrea Whyte stated “I am delighted to join the Cielo board and be part of a company
focused on providing clean, innovative, renewable energy solutions to address excess waste. I
look forward to working with Don Allan and the entire Cielo team.”
Don Allan CEO of Cielo stated: “I am pleased and honoured to have Andrea Whyte join our
Board. Ms. Whyte will be an active member taking the “Lead Director” role. I look forward to
working with Ms. Whyte and welcome her to the Cielo Team.”

Update on MCTO
“The Company is also providing an update with respect to the previously announced management
cease trade order (the “MCTO”) issued by the British Columbia Securities Commission (the
“BCSC”) pursuant to National Policy 12-203 – Management Cease Trade Orders (“NP 12-203”),
as announced on August 27, 2021, and subsequently September 7, 2021 (the “Previous News
Releases”). The MCTO was issued in connection with the delayed filing of its annual audited
financial statements for the year ended April 30, 2021 (the “Financial Statements”), related
management discussion and analysis (the “MD&A”) and officer certificates (the “Certificates”,
together with the Financial Statements and the MD&A, collectively the “Annual Documents”)
on http://www.sedar.com as required pursuant to applicable securities laws.
The Company has been advised by its auditors that a short additional period of time is required to
complete their final review of the Annual Documents. The Company expects to file the Annual
Documents no later than September 20, 2021.

We own shares of these companies personally.

Investing in stocks is combined with certain risks and it is possible to lose your entire investment. Our posts are made for Educational purposes only and are not to be interpreted as tips , financial advise or recommendations of any kind to either buy or sell any stocks.

Companies may or may not be paying us for content posted on this blog

Market update 15/9 2021 – when the going gets tough, the tough get going.

After a rough couple of trading weeks we felt it was time for us to give our general view on the current market situation.

“It seems to me very clear that the stock market is extremely overvalued and this is very dangerous,” says Andrew Smithers, an economist who has written extensively on how to value the stock market. “Bubbles usually end in tears.”

This quote comes from a recent Financial Times article. So is this true and are we all doomed?

Of course not! Even though yes the markets do look like they are stretched in evaluations right now it has mostly been supported by economic growth but ALSO due to the Federal Reserve banks measures in quantitative easings. We think that the anticipated end of tapering ( meaning the end of quantitative easing in support of the financial system) could possibly trigger a correction in the stock market this fall.
We have therefore chosen to currently put 20 % of our portfolio right now in cash for this possible opportunity.

We have recently taken some gains of the table in the following positions:
Clear Blue Technologies – Whole position gone
Thermal Energy International- Whole position gone
Cielo Waste Solutions – Part of our position sold

We urge all our followers to do an inventory check of their portfolio to see if there are certain positions you think are too large or where you could take some profits in order to have a cash reserve in case of a possible correction.

Something to consider

“Prices in the US equity market look extreme relative to history, but they look less extreme relative to interest rates,” says Inker. “If this turns out not to be a bubble, the answer will be that the underlying environment for financial valuations has changed, so investing in stocks with a much lower expected return makes sense.”
“I’m sympathetic to the idea that with very low-interest rates you can sustain higher equity valuations,” he says. “But it’s still very explicitly a bet on where real interest rates are going to be or that they’re going to continue to go lower.”

So the conclusion is stocks can both be considered overvalued right now or reasonably valued depending on if you compare them to historic evaluations or relative yields available for bonds! Undoubtedly it’s impossible to judge when or how a correction/recession will occur. However for the time being we prefer to stay in the safe zone with our 20 % cash position being prepared for whatever this fall holds for investors.

Legal Disclaimer

We own shares of these companies personally.

Investing in stocks is combined with certain risks and it is possible to lose your entire investment. Our posts are made for Educational purposes only and are not to be interpreted as tips , financial advise or recommendations of any kind to either buy or sell any stocks.

Companies may or may not be paying us for content posted on this blog

CLARIFICATIONS FROM CIELO AFTER THE LATEST WEBINAR, OPERATIONAL UPDATE & OUR COMMENTS

Ticker: CMC.V / CWSFF
Listings: TSX Venture Exchange / US OTC / Frankfurt
Website:https://www.cielows.com/
Market Cap: 542MCAD at time of publication
Share price: 0.84 CAD at time of publication
Industry: Converting waste to renewable fuel

Cielo has had a rough trading in the last week and management decided yesterday (7/8) to clarify points made in the webinar last Thursday (2/9) that caught investors by surprise.

“Management would like to reiterate that there are no operational or financial reasons for the decline in Cielo’s share price over recent trading days. The Company looks forward to announcing its audited financials in the very near term. For more information on recent Cielo highlights, please see below.”

Highlights from the webinar:

  • Cielo’s strategic intent is to become Canada’s leading waste to fuel company using its environmentally friendly and economically sustainable technology.
  • There has been an increase in demand for Cielo’s waste to fuel products.
  • Cielo’s revenue stream is not dependent on the desulfurization process. However, a product with a lower sulfur content ought to increase the profit margin of Cielo’s waste to fuel product.
  • Cielo’s mid to long term plans remain intact.

  • Operational update:
  • The Aldersyde “Pilot” plant has been producing in batch mode since
    opening in July 2019.
  • Cielo’s proprietary technology has been proven out at bench scale and at the Aldersyde commercial pilot plant.
  • The Company has reached 1000-lph and has historically produced on a 24-hour continuous basis. Cielo has temporarily slowed production to improve the consistency of the product.
  • We have internal engineers and external engineering consulting firms engaged in continuous optimization and improvements for the
    development of full-scale facilities.
  • The desulfurization system is anticipated to be commissioned in September 2021. The Company expects to achieve its objective of producing fuel with a sulfur content under 15 parts per million.
  • Letter of Intent in place to enter into an agreement for the sale of Naphtha. This is a potential high margin revenue stream for Cielo.
  • Cielo is well capitalized and in a strong position to aggressively move forward towards revenue and the construction of facilities.
  • Cielo purchased a site with amenities in Fort Saskatchewan, Alberta and it is expected to accelerate the build-out of the proposed facility.
  • Engineering, site planning, and permitting are in process for the first joint arrangement site in Dunmore, Alberta.
  • Negotiation of the joint arrangement agreement with Renewable U Energy Inc. is in progress and expected to be finalized in the near future.
  • Multiple additional RUEI Joint Arrangement sites are being evaluated across Canada and potential entry into the US with pending RFP about to be released.
  • Cielo is in the process of setting up a new office in downtown Calgary to facilitate the growth of the Company.

ESG Comments:
As all of our readers most likely know any investment associated with stocks can be risky. What we have seen the latest week is most likely an overreaction to investor expectations that were higher than what Cielo were able to deliver at the given time. Investor sentiment last week was according to us that most people expected the desulfurization equipment to be done and installed which was clearly not the case. Could management have been more transparent about the issues? YES. Would it necessarily have been the best choice? NO. The reason for our conclusion is that personally, we prefer that the company informs investors about the issue when they have an actual solution.
If the company had gone out and informed about problems with their desulfurization equipment without having an overview of how to fix this or the timetable this likely would have caused even more panic.

We urge all our readers, after this eye-opener to evaluate what risk they want to expose their portfolio for. We always urge our readers to execute strict risk management and to never invest all their money into one stock. Our conviction in Cielo Waste Solutions remains firm however if your mental or physical health has suffered the last week due to Cielo’s share performance you are likely taking too big of a risk in your portfolio.

Legal Disclaimer

We own shares of these companies personally.

Investing in stocks is combined with certain risks and it is possible to lose your entire investment. Our posts are made for Educational purposes only and are not to be interpreted as tips , financial advise or recommendations of any kind to either buy or sell any stocks.

Companies may or may not be paying us for content posted on this blog

Portfolio update August 2021

Best monthly performers
Biofrigas Option 1 : + 28 %
Environmental Waste International: + 21 %
Desert control: + 17 %

Worst monthly performers
Newlox Gold Ventures Corp: – 19 %
Nuvve Holding Corp: – 13 %
Absolicon Solar Collector: – 12 %

Current positions with monthly performance for August 2021

Absolicon Solar Collector – Down 12 % despite good news of cooperation with Carlsberg. We expect big things this fall!
Cielo Waste Solutions – Down 8,5 %.
Char technologies – Up 5 %.
Desert Control – Up 17 %.
Earthrenew – Down 2 %, BIG insider buys lately, 6 months financials report coming soon.
Environmental Waste international – Up 21 %.
Newlox Gold Ventures Corp – Down 19 %, reported a gross margin of 64,5 % in their latest financial report!
Nuvve Holding Corp – Down 13 % despite no negative news, feels like this is being heavily traded by market makers.
Vicinity Motor Corp – Down 13 % despite only good news with material orders, the market is clearly sleeping on this one.
Lion E-mobility – No material change, CEO is resigning which actually could be positive, awaiting news of the TIER 1 cooperation.
Landi Renzo – Up 5 %.
Solarvest BioEnergy – Down 10 %, very disappointing stock price lately but our conviction remains. We think big deals are around the corner.
Biofrigas Option 1 – Up 28 % We are expecting news of the verification for their system process during September /October.

New position;
Company: Aduro Clean Technologies Inc
Listing: CSE
Ticker: ACT

ESG comment:
Aduro Clean Technologies has been working to address some of the pressing environmental issues faced by the global community today. One is the matter of unlocking value from waste plastics that pollute our lands and waterways. Others include improving the characteristics of bitumen through a greener conversion process and increasing the economic value of renewable oils in scalable operations that can be implemented locally. Originally developed to upgrade heavy oil, Aduro has redirected and reconfigured HCT to upcycle plastics and upgrade renewable oils. Simply put, HCT leverages the unique properties of water in a chemistry system that transforms large molecules of low value into smaller molecules of higher value; materials with undesirable characteristics are converted into materials that are more useful, the result being a tremendous uplift in market value. We see this company as a great complement to our investment in Cielo Waste Solutions, they’re not direct competitors at the moment but they work in the same line of business. An extensive initial analysis will be done by us on the company in the coming months. This company likely, according to us, has an equally bright future like Cielo Waste Solutions.

Sold positions:

Clear Blue Technologies- CBLU
The company reported very good increases in revenues however we suspect the company may soon find themselves in a position where they once again will need to raise more money. The company is burning 500-800 000 CAD per quarter and the cash reserve is quickly disappearing. We have spoken to several of the investors who participated in the last financing who are disappointed in the development of the company since they would of hoped to see bigger orders in a shorter amount of time. We still like CBLU and will most likely return our position with participating in the financing that we are expecting will take place within the next few months. Should CBLU land a big contract in this time it may deffer the need for a placement however the company is currently heavily leveraged with debt.

We hope you enjoyed our portfolio update and don’t forget to subscribe to always stay ahead of the herd as we always aim to give our subscribers a head start before we release our blog posts on our other social media channels!

Legal Disclaimer

We own shares of these companies personally.

Investing in stocks is combined with certain risks and it is possible to lose your entire investment. Our posts are made for Educational purposes only and are not to be interpreted as tips , financial advise or recommendations of any kind to either buy or sell any stocks.

Companies may or may not be paying us for content posted on this blog.

CIELO SIGNS OFFTAKE AGREEMENT FOR ALL NAPHTHA FUEL AND PROVIDES OPERATIONAL UPDATE

Ticker: CMC.V / CWSFF
Listings: TSX Venture Exchange / US OTC / Frankfurt
Website:https://www.cielows.com/
Market Cap: 690,34 MCAD at time of publication
Share price: 1.07 CAD at time of publication
Industry: Converting waste to renewable fuel

Letter of Intent with Kodiak Chemical Solutions

Cielo Waste Solitions today announced that they have signed a non-binding Letter of Intent (“LOI”) with Kodiak Chemical Solutions (“Kodiak”). Kodiak is a Western Canadian based company interested in the purchase of Waste Derived Naphtha (“WDN”) for uses including but not limited to paraffin solvents, diluents, cleaning fluids, paint and ashphalt diluents and any other uses in their discretion. Kodiak wishes to purchase, from Cielo, WDN from all of Cielo’s Alberta production facilities. The material terms of the LOI are to be mutually agreed upon and set out in a definitive agreement, anticipated to occur prior to the end of 2021. This LOI does not conflict with a previously announced and existing memorandum of understanding with Elbow River Marketing, which is an offtake agreement for diesel fuels.

Lionel Robins, SVP Global Development & Indigenous Relations for Cielo, stated: “We believe the demand for naphtha in the current market is growing and seeing this demand further increases Cielo’s growth opportunity, as we can profitably produce more types of fuel. We now see the opportunity to have a WDN fuel that could demand a premium over its fossil-based counterparts. The price discussed with Kodiak will move with the weekly market price, and we expect that to generate a profitable revenue stream with good margins.”

Brian Venance, President of Kodiak Chemical Solutions, stated: “As the demand for energy continues to ramp up, Kodiak continues to look for and source sustainable alternatives where possible. Cielo’s WDN fuel is an alternative many of our customers are wanting and willing to pay for in the growing demand for sustainability and climate change.”

Operational Update

As to its operational update, and as previously announced, Cielo has hired 3 engineering companies to look for any improvements that can be made to the Aldersyde facility. Cielo has these engineers focused on the main pieces of the process, which include the reactor design and waste recovery to obtain optimized and enhanced performance.

Reactor Enhancements – Optimization of distillate production and achieving a steady-state production profile are priorities. Reactor modifications are anticipated to result in improved distillate production and carrier fluid efficiencies.

Waste Recovery – Cielo is working on modifications, including the implementation of a centrifuge system to the waste recovery process.

Desulfurization – The catalyst, intended for use in Cielo’s desulphurization process, designed by the University of Calgary, and produced in China, was not complete when it arrived to the Aldersyde, Alberta facility. The catalyst required further work and was sent to Texas, USA for catalyst activation and stabalization. Commisioning of the desulphurization process equipment is expected to be completed by the end of September, 2021.

New Corporate Office

Cielo is in the process of executing a commercial lease for corporate office space in downtown Calgary, Alberta. The lease is expected to be finalized in September 2021.

Don Allan, President and CEO of Cielo, stated: “We are delighted to have signed this LOI with Kodiak and look forward to working with them to build out our WDN business. I would also like to thank Kodiak Chemical Solutions and Brian Venance for their commitment and interest in our Waste Derived Naphtha.” Mr. Allan continued: “The process improvements our engineers are working on are creating better optimization of
our process facility which is beneficial prior to building multi million dollar facilities. We believe this is the right thing to do for our shareholders, investors, and financial lenders.” Additionally, Mr. Allan stated: “ The move to downtown Calgary from Red Deer will allow Cielo to expand and attract additional talent required for the anticipated growth of the Company. The inducements offered were quite competitive and Cielo is delighted to have the opportunity to support the recovery and transformation of downtown Calgary.”

ESG Comments & Calculations: We are happy to see that the timeline for finalizing the desulfurization stage is set for the end of September, the technology is not new in itself so we are not worried that it wouldn’t work.

In terms of production capacity, each modular of Cielo’s technology is on pace to produce 4000 litres per hour. Of those 4000 litres, 10% is Naphtha, so we end up with 400 litres per hour, per plant. Which is equal to 9600 litres per day. If we estimate 341 production days (24 days maintenance), each modular will generate 3.3M Liters of Naptha. If we make a conservative of the litre price tag Cielo’s naphtha will be, we land on $0,78 CAD. $0,78 multiplied by 3,3M litres give us over 2,5m CAD in revenue per year for the cheapest and lowest quantity of fuel. In a plant like Dunmore, that number is much higher and lands on $7.5M per year in revenue for just 10 % of the fuel produced. This is an “additional income” for the company for fuels that are worthless compared to the other fuels the company plans to sell! 

If we multiple the “additional income” on all future hundreds of plants in North America, the sales number for the Naphta alone becomes huge!

Legal Disclaimer:

We own shares of this company personally.

Investing in stocks is combined with certain risks and it is possible to lose your entire investment. Our posts are made for Educational purposes only and are not to be interpreted as tips, financial advise or recommendations of any kind to either buy or sell any stocks.

Companies may or may not be paying us for content posted on this blog.

Desert Control – The Solution for the war against Desertification

Desert Control – Ticker DSRT ( NEW!)
Ticker: DSRT
Listings: Merkur Market Norway
Market Cap: 638 MNOK
Share price: 15,7 NOK

Desert Control offers the solution that can revolutionize the war against desertification which is one of humanity’s greatest challenges since every year millions of people become climate refugees due to infertile lands. The patented product Liquid Natural Clay (LNC) from Desert Control can turn desert sand into fertile soil in less than 7 hours. A process which previously has taken between 7 and 12 years. This is a true game-changer. Desert Controls product offers a strong value proposition for customers with short payback times. Their LNC product reduces water consumption up to 50% and increases crop yields up to 62%. Payback times for customers on water consumption alone is expected between 1-2 years. Changing desert to green land also reduces CO2 emissions by between 15 – 25 tons/hectare annually.

Below you will find an extensive CEO interview with Ole Kristian Sivertsen which took place in the middle of june 2021.



Below you will find an extensive CEO interview with Ole Kristian Sivertsen which took place in August 2021.

ESGFIRE: Hi Ole and Welcome to this interview!

Ole: Thank you!

ESG: Have you secured your production method in a way that makes it a sustainable process? Scalability of the production?

Ole:
 Yes, we have done, and this is also why we choose to go with distributed approach using mobile factories to produce on site where we are delivering the LNC treatment.

Otherwise, the alternative would have been to build centralized factories with a lot of shipping with negative effects compared to sourcing raw materials locally and create job opportunities in our local markets as is our current business plan. Our current approach gives us a good ESG and circular economy. Everything in our production is produced locally. We aim to create a platform that can scale exponentially on a global level.


ESG: You just took in 200 MNOK for your listing, how far will this money get you?

Ole: It will get us quite far in terms of finalizing our scale up based on the prototypes of mobile factories into commercializing our product into UAE and enter our market presence into the US. We are confident we will reach those objectives.

We have shared a prognosis with the market in which we believe we will become profitable with the funds currently at our hands.

ESG do you see the need for more external funding?

Ole: Our entire fund raising for the Euronext listing was built on 2 by 2 model which means two countries and two segments:

Two segments being the commercial greenery and landscaping market and second more important one is the agriculture market including forestry and elements of food security. Our third market will be eco system restoration which will be added on.

The current business plan focusses on these two markets, and we have sufficient funding for the UAE as a platform for the Middle East, North Africa (MENA) region and then to also enter into USA focused on California, Arizona, and Nevada.
Worth mentioning is that with this plan we are only tapping into a fraction of the total addressable market. When we have more revenues it’s also easier to fund our expansion with green bonds and similar financial instruments.
The Total addressable market is about 110 countries and 3-4 different segments. Our only hindrance to taking on all of these is operational scalability, and if we run into obstacles for raising more funds.



ESGFIRE: Do you have any competitors in this field? What does competition look like?

Ole: I think the biggest competitor is the one I call ignorance and lack of knowledge.
The issues that our products address, topics such as desertification, are happening out of sight for most people. Soil degradation is happening under our feet, and the vital top soli is getting thinner from underneath. Some people become aware by seeing documentaries like «Kiss the Ground» on Netflix.
There are substitute products that could be used as complementary with Desert Control’s products such as biochar, polymer’s, peat moss and other things. The main difference from us is that while we are liquid, they are solid. We could potentially help liquify some of these products to decrease their intrusiveness or use them in combination with our solution.
There are of course other things that compete with us occupying a piece of customers wallets. However, if you look at the global market, the costs of desertification for the global economy is 490 million USD per year. We definitely need competitors because this is a huge market, and we must turn it around to safeguard the future for people and planet.

ESG: Do you have any plans to get a secondary listing perhaps on Nasdaq in the US in the future?

Ole: No plans, but it is possible. The nature of our business is global.
We are currently listed on the Euronext Growth index of the Oslo Stock Exchange in Europe where we are born.

It made sense to have access to capital from our closest market. However, if you look at our global expansion it may at some point make sense to consider other markets to be listed on.
We do already frequently get requests from investors who want to be part of our journey and who say it would be easier if the company was listed on other markets.



ESGFIRE: Patent protection, how comprehensive and how long is your product protected for?

Ole: Our patent is solid it covers the process and the actual binding between clay and sand particles in the soils. I’m not a big believer in building castles and walls and protecting things with patents, we need to focus on being the best at what we do. Our main patent was filed 2007 and approved, so naturally it will last 20 years (2027). We are working on potential additional patents. We have main patents and then we create patents around it. Even before Desert Control was established in 2017 it took 12 years to make it work in a way that it does not bring any harm to nature. Our product is not like software, when you deal with nature you need a full calendar year and then 4-5 natural cycles over time to get it right. It’s a lengthy process for any potential competitor. Further we believe our know-how and understanding about how to formulate our product optimally for each targeted soli type and the unique preferences of different plants and crops will be a good way of adding value for customers and staying ahead of competition at the same time.

If we play our cards right and execute on our official strategy we will maintain our competitive advantage for the unforeseeable future because it’s about how you build a competitive platform before competitors arrive. Our goal is to have a product and knowledge base as a constantly learning and evolving platform. That way, anyone who tries to copy us they will simply copy yesterday’s news.

Our goal is to have a product that’s so scalable and automated that it does not require training because then you cannot scale. Our goal is to create a model that can scale comparably to Starbucks, McDonalds etc. with a mobile soil health kitchen. The mobile soil platform will be the core. The algorithms for soil treatments will be the core IP treatments and will be in the digital cloud and not in the unit.

ESGFIRE:  What will be your primary customer focus initially?

Ole: Our primary focus now is the UAE, and next we will expand to the USA. The customer focus is within agriculture, forestry and landscaping. In many ways these segments tie closely together when it comes to for example food security. We even discussed it with on our Board of Directors in terms of core values. When we have powerful innovation why focus on landscaping? Food security is most important. But it ties together as I said. Let me explain.

A country like the UAE have to maintain green landscapes, parks and gardens. The alternative would turn these areas into desert, temperatures would increase, CO2 is released. This would make it uninhabitable. But what if we could reduce the amount of water required to maintain green landscapes? That could free up water to be used to cultivate agricultural land and strengthen food security.

If we can reduce water consumption for landscaping by up to 50 % AND shift that water into agriculture and food security initiatives, we clearly see how it all plays together.

I have met farmers that are only cultivating half of their land because they can’t get enough water. They only have half the water they need. So, if Desert Control can reduce water consumption by 50 % these farmers can double maybe even triple their production.

The revenue split in our initial business plan was something like 60 % landscaping and 40 % agriculture, but it will shift soon. We needed to free up water for agriculture which will likely outgrow landscaping as the biggest market ahead. Future revenue split will likely be 60 % agriculture and 40 % landscaping.

ESGFIRE: Does your LNC product make customers eligible for carbon credits?

Ole:

We have looked at it and we are getting advice from a group specializing in this with Equinor and others.  We see a high potential for this. Nature based solutions can offset sufficient CO2 to make up for 57 % of the Paris Agreement’s 2DS target. Soil rehabilitation has a global potential between 5-6 gigaton offsets of Carbon dioxide (CO2) per year and could stop deforestation which represent another 8 gigatons. People cut down trees because they need to make space for agriculture. To avoid that with sustainable farming and restoring soil holds a massive potential.

Getting carbon credits is a lengthy process and getting measurements where you are able to actually able to calculate the net additive effect needs to consider if you are doing anything that is releasing carbon. This is good for us because we have a non-intrusive way to apply our product into the soil in ways ensuring no carbon escaping in the process.

A supplementary product such as biochar is great because it also contains carbon. So, for every tone put in the ground you could imagine getting a ton of carbon credits, but it’s not that easy. Because when tilling and turning soil to work the biochar into the ground, it releases a lot of carbon stored in the soil, this because when carbon is exposed to oxygen the reaction may turn it into carbon dioxide (CO2), and as a result it will be released.

We think it will take about 1-3 years until we are eligible for Carbon Credits.

Luckily, we are not depending on it, but it could help the people who are most dependent on our LNC product that can’t afford it such as people in Africa.


ESGFIRE: You had a project in Egypt a while back how is the progression on this?
 
Ole: The project in Egypt was part of the 12-year R&D by the inventor and co-founder. During this time there was a lot of testing in the field where the LNC product was tested in Egypt, Pakistan and many different places even in a wind tunnel in China.
At the moment now we have a lot of requests because it’s been tested in Egypt, we naturally also get requests from there. We however are not expanding beyond UAE yet since we focus and momentum before expanding more broadly ahead.



ESGFIRE: Is there any dialogue with foundations and climate NGOs for companies to use Desert Control’s LNC product as a way of CO2 compensation?

Ole:

We have requests, and we may run some pilots with 1-2 of them and see how it works out. We are also discussing with the likes of United nations, UNCCD and also with an organization called ARK 2030 who are dedicated to massive restoration of global ecosystems. It’s a very good idea and we have requests from local companies in Norway looking for this, asking for example if we could create a green oasis in the desert to contribute towards CO2 offsetting and serving as a CSR initiative for the company.
Further I believe it will be important to drive more public engagement. To succeed with this, we need to simplify the message. It’s very visual and easy relating to paying a dollar to plant a tree as an example. In the same way we should make it visual and engaging to donate dollars for turning desert into fertile land producing food.

ESG: Since your product still requires additives such as fertilizer, have you considered teaming up with any regenerative agricultural supplier in the organic fertilizer industry such as for example Earthrenew?


Ole:
 Correct, our product is not a fertilizer, LNC makes sandy soil capable of retaining water and nutrients. If you thereafter manage the land in regenerative way, you may have lasting impact of the treatment, but the soil still needs nutrients. For this, partners in the organic fertilizer industry can definitely add value. Our product does not require tilling, and we could simply apply liquid fertilizers and other substances such as natural fungi or soil microbes specifically for that area.


ESGFIRE :
Can you tell us more about the cooperation with the United Nations


Ole:
 Yes, basically we are looking to when we reach scalability with our production to be a part of the so called great green wall initiative, it’s on a high-level ambition to rehabilitate. (hyperlink https://www.greatgreenwall.org/about-great-green-wall)

The green wall project is 8000 kilometers from Senegal to Djibouti it’s about creating a 100 million hectares ecosystem restoration which will offset 250 million tons of carbon a year and create more than 10 million green job in rural areas in Africa.

We were planning before covid to launch a pilot in Senegal study but unfortunately Covid has put slow to this. However, once it’s feasible to operate there again with vaccines we will reengage with the UN team to look at countries where we will cooperate with the local government and the United Nations for a feasibility study. The Great Green Wall has already attracted 17 billion dollars of funding and is making progress.


ESGFIRE: What do you view as main possibilities and risks for Desert Control in the coming years?

Ole:
 The main possibilities are in the middle east and for us at this stage, and we focus on developing a scalability platform, generate revenue, and expand across the region and enter USA with agriculture as our primary segment supported by landscaping .

The larger opportunities come to play with forestry’s and planting of trees with the shift of the Biden administration in USA. There are supportive programs when it comes to what we do for both agriculture and climate actions. These are programs we can tie into, and they could accelerate our expansion in the US; once we have a solid foundation, we can start attacking the rest of the 110 countries exposed to desertification around the world.

The main risks as I see it is how quickly can we scale up if there are tightened Covid-19 restrictions again?
What will be the financial impact on our customers if we have issues with Covid-19?

However, there will, regardless of Covid-19 still be a big need for local food security driving the need for our product.

ESGFIRE: What do you view as current short-term catalysts?

Ole:
 I think the potential of the deal and partnership MoU we just announced ( https://newsweb.oslobors.no/message/535373) can be a significant catalyst. If you read about the customer we have signed with, the potential becomes clearer. They manage UAE forests, nature reserves, wildlife and other natural resources. In the PR its mentioned that they maintain 11-13 million trees as an example. If we in partnership are able to demonstrate through the initial pilot, the benefit from LNC and how we can bring it to market in partnership, the potential is ENOURMOUS.

ESGFIRE: What does the financials look like for 10 million trees?

Ole:
 Let’s make a hypothetical simulated scenario for illustrative purposes .

An average tree needs 100 liters per day and a palm tree in the warmest summer needs 250 liter per day per tree. The bare minimum for survival that I’ve seen is 25 liters per day for one tree.

Let’s say you have 10 million trees that use, very conservatively, 25 liters per day, that’s 250 million liters of water every day. IF we can save 50 %, which we think is possible, we are saving every day 125 million liters. The average selling price with subsidies for farmers in UAE is 1 dollar per cubic liter.

That’s 125 000 dollars per day saved. Close to 3 750 000 dollars saved per month

Just the water saving alone here could be transferred to 1,5 million tomatoes of half a kilo each per day. Per year the savings is 40 million dollars per year saved.

The Saudi prince has said he wants to plant 10 billion trees but obviously he will need water for this. We have the solution.



ESGFIRE is there a backup plan if the UAE deal does not go well?

Ole:
 We will have deals in other areas to make sure we have plan A, B and C, this (UAE) will be our main priority because its huge and its already bringing us close to half of the revenue we need for this year 2021 in our projections anyway.  With some other smaller project, we will reach our revenue target for this year.
We will not be quiet until October (when the results are expected for the UAE project). We are already in this potential partnership starting to develop opportunities for larger deals. We also have other opportunities that our team has developed over time through pilots mentioned in our latest operational update.

ESGFIRE: What does the current situation look like with warrants /options outstanding?

Ole:
 All is disclosed, the only thing we have is this stock option for employees nothing besides that.

The holdup period for employees is most likely a 4-year restriction.



ESGFIRE: What is the Lockup period for current shareholders?


Ole
: Primary insiders are on a 12-month lockup.
 

ESGFIRE: What does the current burn rate look like?  Do you expect to be profitable before needing more money?

Ole:
 Desert Control is well funded for future development and growth. The nature of the business allows flexibility for investments and cost to be aligned with customer demand and revenue. There are of course risks to all business ventures. For example, if Covid-19 suddenly causes a 4th wave with lockdowns we may suffer delays. However, the flexibility of our business model allows us to be prudent and aggressive at the same time. We are not taking on unnecessary burn rate before passing key milestone as an example.


ESGFIRE What does margins look like for Desert Control:


Ole: Our business plan announced for the IPO targets a gross margin of 40-50% and as the business reaches scale the model targets an EBITDA margin towards 30%. This is still to be proven with real numbers from projects and deliveries, and instead of overinflating expectations, we prefer to deliver and build the business ground up, stone by stone. We don’t have any need to overinflate the share price on the short-term, since we have a rock-solid long-term plan. We prefer to under-promise and over-deliver.
 
ESG: Thank you for participating in this Interview Ole we are looking forward to following the progress of Desert control!


Ole: Thank you!

Legal Disclaimer

We own shares of these companies personally.

Investing in stocks is combined with certain risks and it is possible to lose your entire investment. Our posts are made for Educational purposes only and are not to be interpreted as tips , financial advise or recommendations of any kind to either buy or sell any stocks.

Companies may or may not be paying us for content posted on this blog.

SOLARVEST BIOENERGY SIGNS MAJOR SALES AGREEMENT WITH 23 MILLION USER PLATFORM ORGHIVE

Company: Solarvest Bioenergy Inc.
Listing : TSX Venture,Frankfurt
Ticker: SVS.V , 0ZJ:FRA
Market cap at time of publication: $14.94 MCAD
Stock price at time of publication: $0.25 CAD
Business: Patented plant based pharmaceuticals from algaes and Clean Energy Hydrogen production
Comparable peers: Else Nutrition market cap : 306 MCAD
Website:http://www.solarvest.ca/ and for the omega 3 products: https://eversea.ca/

Solarvest Bioenergy today (1/9) announced a major sales agreement with OrgHive, China’s leading Organic Blockchain Verified Digital E-commerce platform with 23 million unique users.

Solarvest announces that its wholly owned division, Eversea Inc., has signed sales and promotional agreements with OrgHive, China’s leading digital marketing and e-commerce platform dedicated to organic consumers.

The OrgHive organic community has garnered 23 million unique users since inception last year. They provide organic related content to consumers online and have developed a blockchain-based verification system for organic products that are purchased throughout mainland China. Furthermore, the platform developed by OrgHive will reach organic consumers beyond China, including those located in other parts of Asia. There are no commercial or regulatory barriers for Eversea to sell its products to Chinese consumers through OrgHive’s online platform.

OrgHive will promote Eversea’s algae-based, certified organic omega-3 DHA, the first of its kind in the world, to millions of its registered subscribers. OrgHive will be responsible for logistics, fulfilment and all digital marketing activities, including social media.

“We are thrilled to partner with Eversea and help bring its groundbreaking organic omega-3 DHA to Chinese organic consumers,” said Anastasios Papadopoulos, co-founder of OrgHive. “We have built the most engaged and active community of organic consumers in the country, and these people are on a constant search for the most cutting edge, healthy products. It is a perfect time to introduce Eversea’s products to them.”

Due to its sheer volume and growth, it has been our goal to enter the Chinese market, and there is no better way for us to reach Chinese organic consumers in a cost-effective, highly-targeted, rapid way than the OrgHive platform,” said Gerri Greenham of Solarvest. “OrgHive has already demonstrated its leadership and scale in the Chinese organic market, and we are very excited to leverage that with our novel organic products.”

“In a very short period of time, OrgHive has become the most dominant digital platform and trusted source of organic food-related information for Chinese consumers, and this relationship will allow Eversea to target Chinese organic consumers in an unprecedented way,” said Max Goldberg, founder of industry newsletter Organic Insider. “China represents the world’s biggest, untapped market for organic products, and I expect Eversea’s game-changing organic omega-3 DHA products to see very wide online penetration in this country, thanks to the power of the OrgHive platform.

Eversea will soon begin its social media outreach in China, which will be followed in the fourth quarter by the launch of four organic omega-3 powder supplements and a dried fruit organic gummy for children. All the products are based on the foundation of the company’s certified organic omega-3 DHA ingredient.

ESG comment:

Orghive is a division of a large Chinese private company with 300 employees. It looks like they are aiming to be the Chinese organic version of amazon, in one year they have grown 23 million customers. They grew their customer base 88 % from December 2020 to May 2021. A quick calculation by ESGFIRE shows that if Solarvest attracts ONLY 0.1 % of the customer base (23000 customers buying 12 bottles a year at 20 USD per bottle) could equal 5.5 million USD in annual sales. Omega 3 is a daily use product so we can expect recurring revenues from this platform if the customers are happy with the omega 3 product.    It’s worth to mention that all of Orghive’s customers have signed up because they are interested in organic products.

Legal Disclaimer:

We own shares of this company personally.

Investing in stocks is combined with certain risks and it is possible to lose your entire investment. My posts are made for Educational purposes only and are not to be interpreted as tips , financial advise or recommendations of any kind to either buy or sell any stocks.

Companies may or may not be paying us for content posted on this blog.

Newlox Gold reports Q1 financials + CEO interview

Company: Newlox Gold Ventures Corp
ESGFIRE 5 year price target: 9,28 -13,6 CAD
Listings : Canadian Securities Exchange, Frankfurt , US OTC Pink sheets, Formal US OTC in progress
Tickers: LUX, NGO , NWLXF
Market cap at time of publication: 49,4 M CAD
Stock price at time of publication: 0,405 CAD
Number of shares fully diluted 190,390,637
Business: Environmentally friendly and socially responsible gold mining
Market Size: US$27bn – US$180bn 
Website: https://newloxgold.com/

Newlox Gold yesterday (30/8 2021) reported their consolidated financials for the 3 months ending of June 2021.
We are happy to see that revenues s are doubling from 134 000 CAD to 266 000 CAD but what’s even more fascinating is to see that the gross margin is a staggering 64,5 % ! This certainly bodes well for the future expansion. The cash position was also very comfortable at close to 3.2 million CAD. The full report can be found here.

3 quick questions with Ryan Jackson, CEO of Newlox Gold

ESG: 1. What catalysts are you most looking forward to in the next 6 months for Newlox Gold?

Ryan:
Newlox Gold has four main initiatives currently underway; ramp-up of productivity at Plant 1, construction at the Boston Project, expansion into the Brazilian market, and technology development. In the next six months, we believe that the catalysts will be the achievement of full-scale operations, and the associated cashflow, at Plant 1, commissioning of the Boston Expansion Project in Costa Rica, and the announcement of our first Brazilian project.  


ESG : 2. How do you view your current funding capabilities and liquidity position?

Ryan:
The Company currently has a strong treasury and is fully funded for the ramp-up of Plant 1 and the completion of construction and commissioning at the Boston Expansion Project. Part of our financing strategy is the expectation that the Company’s investors will exercise their convertible securities. All the warrants outstanding a firmly in the money, and we are regularly receiving wire transfers to top up the Company’s treasury. This represents financing that does not require more legal or finder’s fees and supports Newlox’s regional expansion strategy. The combination of internal cashflow and financing from warrant exercise will likely make up a large percentage of the initial funding for our medium-term plans.


ESG: 3. What do you see as the biggest challenges foNewlox Gold to reach its goal of extracting +145,000 ounces of gold in 5 years?

Ryan:
Newlox Gold is growing rapidly; however, it is still a small company. Because of this, human resources are the major consideration when executing our regional growth strategy. We have access to a strong pipeline of expansion projects in many countries, the major reason we picked Brazil is because the company has excellent contacts there including experienced and trustworthy engineers and geologists. Growing our team, especially in new jurisdictions, will be an exciting challenge for us but we benefit from the legions of young engineers who have trained under Dr Veiga, Dr De Tomi, and Dr Sobral over the years.

Legal Disclaimer:

We own shares of this company personally.

Investing in stocks is combined with certain risks and it is possible to lose your entire investment. My posts are made for Educational purposes only and are not to be interpreted as tips , financial advise or recommendations of any kind to either buy or sell any stocks.

Companies may or may not be paying us for content posted on this blog.

Newlox Gold, A safer ESG bet on gold

Company: Newlox Gold Ventures Corp
ESGFIRE 5 year price target: 9,28 -13,6 CAD
Listings : Canadian Securities Exchange, Frankfurt , US OTC Pink sheets, Formal US OTC in progress
Tickers: LUX, NGO , NWLXF
Market cap at time of publication: 48,79M CAD
Stock price at time of publication: 0,40 CAD
Number of shares fully diluted 190,390,637
Business: Environmentally friendly and socially responsible gold mining
Market Size: US$27bn – US$180bn 
Website: https://newloxgold.com/

Short summary:


We are initiating coverage on Newlox Gold which is a junior gold mining company like no other on the public market. In fact it’s more fair to call Newlox Gold an Environmental remediation company. Newlox Gold’s works with local artisanal miners (with which they share profits ) to clean up historical mining waste while simultaneously recovering precious metals. They have developed revolutionary technology that recovers precious metals from historical mining sites, waste areas as well as recently mined rock using non-toxic reagents. Since the company’s unique OAR technology uses NO water in the extraction process this is as ESG friendly as it gets in the gold mining industry. The OAR technology which currently is planned to commence in-field testing later this year or early in 2022 is further explained below. The company is initially targeting an untapped US$27bn market using a solid low capex business model. Newlox Gold technology could potentially be applied to the whole formal gold industry valued at US$180bn. Seeing as there are almost no formal companies focusing on the artisanal mining industry Newlox Gold has a great first mover advantage.

The business idea of Newlox gold is to extract gold, silver (and other metals in some projects) by working with local artisanal miners. In simplified terms the company recovers mainly gold from historical waste material as well as ore mined by artisanal miners in Latin America. The implication of this is that the projects that the company execute have far less risk than other junior gold miners. Junior gold mining companies typically spend millions of dollars to find gold but Newlox Gold already knows where to find it. For example Newlox Gold does not have to perform expensive geological examinations nor do they need to perform expensive drilling projects and instead they can work in areas which have historical and ongoing gold mining. Traditional artisanal mining technology can extract only 40 % of the gold it mines, Newlox Gold technology on the other hand can extract over 90 %. 

The initial project for the company is in Costa Rica. This is a country that has suffered environmental damage from mercury use in gold recovery by artisanal miners. In the second quarter ongoing, the plan is to ramp up gold production from tailings at its first plant and commission a second plant in Costa Rica to crush ore to be brought there by miners. Newlox Gold also plans to initiate a third and fourth project in Brazil as recently announced. The operations are fully funded for both projects in Costa Rica and for the Due Diligence being performed in Brazil and they plan to finance further expansions mainly using existing cashflow or debt financing, so it does not dilute shareholders. The company is basically debt free apart from a convertible debenture totalling 4 MCAD.

The goal for Newlox is to become a mid-cap gold producer within the next 5 years.

Stock history background

Newlox Gold went public in 2014 through the purchase of a shell company and their first financing was done at $0.05 CAD with a $0.10 warrant.  The road has not been fast or straight, but the company is now quickly approaching profitability and we believe the company has enormous potential moving forward despite a huge return on the share price in the last 12 months. The company has achieved significant milestones lately which has fuelled the surge in the share price meaning there are fundamentals to back the latest increase in the share price. Recently famous Canadian investor Robert Mc Whirter has invested in the company and have brought with him a lot of attention from the general investor community [1]. We see it as a strong bullish signal that Mc Whirter has chosen to invest in Newlox, he reportedly purchased shares at 22 cents originally.

Ownership structure

Insiders and other persons/corporations who are considered close to insiders hold approximately 30 % of the shares in Newlox Gold. Current institutional ownership is hard to come by however participation in company’s financings has been made by several institutions such as Canaccord, Desjardins, Hampton, and Quinsam Capital. Quinsam Capital and its principal, Roger Dent, at one point filed statements that it held over 10% of Newlox Gold. As previously stated, famous Canadian investor Robert McWhirter has also recently disclosed that he has taken a considerable position in the company.

Technology and market overview

The global market for gold should reach $189.6 billion by 2022 up from $163.9 billion in 2017 at a compounded annual growth rate (CAGR) of 3.0% from 2017 to 2022.

It may be rather unknown to the larger investment community that Artisanal and Small-Scale Mining (ASM) is a major source of mineral production in the world.[2] The typical ASM production facility is unfortunately associated with low safety, high levels of work accidents and poor environmental / health aspects. In many countries ASM workers use mercury for gold extraction. Mercury is used to mix with gold-containing materials, forming a mercury-gold amalgam which is then heated, vaporizing the mercury to obtain the gold. This process can potentially be extremely dangerous and brings with it significant health and environmental risks and not to forget also inefficient. Initiatives such as the Minamata convention, a global agreement, aims to reduce the use of mercury in gold production. For those who wish to read more about Artisanal mining without the use of Mercury we recommend reading below.[3] . Amalgamation technique which is being used by ASM miners is not favoured by the gold industry at large because it creates pollution and it is not very effective although the technique has been used before more effective methods were developed.

Newlox Gold is currently using a gold extraction technique called gravity and floatation technology for which they have designed a customized approach. This technology is widely used and does not require patenting.  This technology uses a customized intensive carbon in leach (CIL) system which has been designed in partnership with the Company’s advisors at the Norman B Keevil Institute of Mining Engineering at the University of British Columbia. The company, according to management, plans to duplicate this process at each project to ensure they deploy a suitable system based on every projects individual conditions. Worth mentioning is that the company has a very strong technical team, good relationships with governments and university labs which adds credibility and strength on all projects executions. This technology is already highly profitable for the company.

Newlox Gold currently has a technology under development in late stage research used for recovering gold at a potentially higher than previously possible extraction rate and in a way which does not require mercury or any other harmful toxins. The technology, which is called organic aqua regia (OAR) also uses considerably less water than current methods.

Water management is a big deal in the mining industry; mining competes with other uses, such as domestic and agricultural, and any reduction in water use has significant advantages, especially in arid climates. Additionally, because the process does not use water as an input, there is no wastewater, or effluent, produced. This is a major environmental advantage because the management of effluent, and potentially chemical residues, is a major problem in the resource industry. This creates an extremely improved working environment for ASM miners, a more sustainable environment and contributes to an improved social community for local miners.

Newlox Gold has stated that they are currently not applying patents for this process however they may do this at a later time. The reason for this is, according to the company’s CEO that “The patent process can be lengthy and costly while providing international entities with process details for reverse engineering. At present, our strategy is to develop the technology, test it in the lab now and in the field at our processing plant later this year. We may enter the patent process once the technology is mature. We can begin marketing to third parties at that time, giving us a firm first mover’s advantage while being covered by patent pending. OAR is non-toxic, requires no water, and has delivered over 95% recovery in stage 1 testing. We are very excited by this research and are currently undertaking stage 2 R&D. “

Lastly the most exciting technology under development by Newlox Gold is the so called low-energy mercury remediation system. The company is developing this technology in a partnership with their advisor Luis Sobral at CETEM (the Brazilian National Metallurgical Lab).
Field testing has been done and a commercial sized unit is currently in process of being deployed. This technology will most likely be revolutionizing for the disastrousenvironmental effects that gold mining with mercury has caused.


To conclude Newlox Gold has several unique technologies which have been developed using a very little of the company’s time and capital,  while delivering extremely promising results.  The current value of the research and development department of Newlox Gold does not seem to be priced into the evaluation of the company by the market. Especially the organic aqua regia (OAR) system which could potentially change the whole way that the US$180bn formal gold industry is performing today and generate substantial licensing revenues! It should however be mentioned that this technology is currently in stage 2 research. The first round of testing showed that the technology could dissolve almost 100 % of ore material during elevated temperature at ambient Costa Rican levels. The next stage should be to test the scalability of the technology. We expect the company to provide a full report on the technology this fall (2021) and perhaps a teaser before this, according to the company’s latest webinar presentation (14/5 2021).

Business model

Newlox Gold intends to grow their business using a low capex business model using cashflow from ongoing operations for organic growth. The plan is to use the profits expected from projects in Costa Rica to finance the Brazilian expansion. This is very interesting for any potential shareholder since this could mean far less dilution than having to fund growth with repetitive external capital injections. The company already has full funding for their two first plants. The company also has an inhouse laboratory which means they can get lab results far quicker than having to wait several weeks and sometimes months to determine the quality of potential mining sites.

The current technology applied by the company has raised the efficient level of gold recovery from 40 % to 90+ % and according to our interview with the company the OAR system of their R&D project could raise this far above 90 %.

As previously stated, the company applies a profit-sharing model with their ASM mining partners. The two first projects are located in Costa Rica which is a democratic stable and developed country that has 98 % renewable energy production[4]. At the company’s first processing plant however, they are simply buying artisanal tailings, which is basically waste material, on a tonnage basis model. The company’s second project, also called the Boston project, has a 50/50 profit sharing agreement with local ASM miners. The way it works is local ASM miners supply the Newlox Gold facility with raw material from local mines and the company does the chemical processing. The great part of this is that it can reduce social and environmental problems that are normally accustomed with ASM mining. The miners in turn receive payment equal to the same amount of tonne they usually mine but it frees up more time for them to work on improving their community and with considerable added beneficial health aspects as they do not have to deal with mercury or any other toxic materials.  The company calls this the “Partner mining model and we assume this model will be applied in other upcoming projects. Usually ASM miners are able to extract 40 % gold recovery rate from tailings, with Newlox Gold the local miner cooperatives get to profit split a recovery rate of 90 % without having to do the hard work of processing the tailings. The ASM miners are processing mined rock and getting 40% of the gold, Newlox is the only one processing tailings. Because of this, the local miners can earn the same amount per tonne that they normally mine by working with Newlox Gold, but they save a lot of time and effort as well as gain improved health since they do not need to use any toxic materials for their extraction. This in turn leads to higher profits while addressing the environmental and social issues usually associated with artisanal mining.

Each Newlox plant has a low Capital Expenditure (CAPEX) of between 2-3 million USD. The company expects all projects will pay back their entire capex in less than one year at full production. The 5-year plan of the company is to commission 2 new plants each year to reach a total production of +145,000 ounces per year. If this plan is successful it equates revenues of close to 260 million USD per year based on a gold price of 1816 USD per ounce.

Newlox gold activities have been well received by the government of Costa Rica as they provide a solution to a real environmental problem. We are expecting this welcoming to continue on other geographical locations where the company seeks to establish their business since they improve both the environmental aspects as well as the social aspects of the community where they are engaged.

The company currently operates with a 9 gram per tonne gold grade cut off because material at the grade is easily available. Gold prices does not have to increase for it to be profitable to process these tailings for Newlox Gold. The recently reported  project one has total gold recovery cash costs of only $535 per ounce.

One big revenue aspect that could potentially transform the whole revenue model is if Newlox Gold manages to license out their OAR technology to other miners and mining sectors.


The revenue potential for this licensing could be far bigger than the company’s goal of +145,000 ounces per year / 260 Million USD in annual revenues.

5-year ESGFIRE price target: 13,6 CAD calculation

We believe the current plan of Newlox Gold to commission 2 new plants each year and reach production numbers of +145,000 ounces per year to be realistic. The reasons for our assessment is that the company has revolutionizing technology which has already proven to give an astoundingly fast return on capex in as little as less than a year. The company seems to have no visible problems finding new projects and they have so far been well received on all locations where they have established themselves. In fact the company’s 5-year plan may even be slightly overcautious as it does not take into account any revenues from technology licensing or joint venture partnerships.

At current gold prices the company’s 5-year production target would equal 260 million USD in revenues. Using conservative numbers and applying the 50 / 50 profit sharing model on the entire revenue stream the pre-tax profit should stand at 131 million USD. Using standard Canadian corporate tax of 28 % the net profit should be 94.32 million USD. These numbers are excluding any potential revenues from licensing out Newlox Gold technology or joint venture partnerships.

The current number of shares fully diluted is currently 190,390,637. Applying the 94.32 million USD net profit gives us an earnings per share of 0,495 USD.
Mature gold miners in Canada are currently valued between 15 – 30 X EPS. We will be using a 15-22 X multiple for conservative calculations.
Applying 15- 22 X EPS multiple on Newlox Gold’s possible 5-year EPS of 0,495 USD gives us an implied share value between 7,425 – 10.89 USD.

This equates to 9.28 – 13.61 CAD and a 23 – 34 X upside on today’s stock price at 0,40 CAD. We believe Newlox Gold due to its unique ESG aspects is worth to be valued at least at a multiple of 22 X earnings (if not higher) if they can reach their 5-year target.

Current ongoing operations

We will be assuming gold prices of 1816 USD per ounce in our calculations.

The two projects in Costa Rica are currently ramping up to produce at full scale in the next few months, according to the company’s latest investor webinar  (13/7 2021)  they are expecting to provide an update on this shortly. . Project number one in Oro Roca is estimated to process 80 tons of tailing per day with 9 grams of gold per ton. Applying a 90% recovery rate gives us 648 grams of gold per day or 20.83 troy ounces of gold. Applying 320 operational days per year gives us 6667 ounces of gold equaling 12.107million USD in revenues and with a cost of $535 per ounce the gross profit should equal 8.54 million USD per year for this project alone. Newlox Gold buys tailings from local ASM miners at a cost of 200 USD per truckload.

The second project called the Boston project is run with a profit-sharing partner model. Local ASM miners simply bring ore material to Newlox facility which saves them time and also pays better than extracting the gold by themselves. Local methods seldom give a higher extraction rate than 40% and with Newlox technology over 90% the ASM miners get 50% of the net profit without the excruciating and health damaging labour associated with their usual extraction that often uses mercury.

The production numbers are stated to be at 150 tons of tailing per day giving approximately 15 grams of gold per ton. With 90% extraction rate this equals 2025 grams of gold per day, or 65.1 ounces. Assuming operations of 300 days per year this should equal to 19531 ounces of gold extracted per year. Total revenue should stand at 35.47 million USD per year with a net profit after profit splitting of approximately 15 million USD using conservative figures. This project is expected to be in production this year and ramping-up to full scale in 2022.

On these two projects alone the total gross profit should therefore equate to approximately 23,8 million USD. In Costa Rica Newlox Gold has signed agreements with ALL local ASM mining cooperatives (according to CEO Ryan Jackson on investor webinar 13/7 2021). Currently Newlox Gold is doing due diligence for three projects in Brazil. The company already has the team on the ground and contacts necessary in Brazil thanks to Doctor Veiga and Doctor Giorgio De Tomi. Doctor De Tomi has worked closely with Doctor Veiga alongside ASM miners.
Doctor Veiga is of Brazilian origin and probably has the most knowledge about ASM mining globally. Therefore, it makes perfect sense for Newlox Gold to enter the Brazil as its next market.

To give a comparison of the size this market has it should be mentioned that in Costa Rica there is a total of 1000 ASM miners. A single project in Brazil on the other hand engages close to 6000 miners in one cooperative. The area that Newlox Gold is currently doing due diligence in had an active production of close to 5 tons of gold in 2020. According to the latest investor webinar by the company (13/7 2021) some drilling is being made and results have so far been very encouraging. The due diligence of Brazil is expected to be done later this year. Decision on which projects to go forth with and construction should begin early next year (2022). The infrastructure challenge in Brazil is greater than in Costa Rica which could pose some challenges for scaling up production. Having Doctor De Tomi on the team certainly helps since he is considered somewhat of a local hero in Brazil (According to the latest investor webinar by the company 13/7 2021) .

Upcoming catalysts for Newlox Gold Stock


– Sales numbers  
Newlox Gold released their latest financials sometime at the beginning of August 2021 which did not show exciting revenues. However, they were early in the ramp-up of operations at Plant 1 in Costa Rica and recent company news shows that plant operations have reached 50 tonnes per day this summer. The recent update on operations stated that production is being achieved with a cash cost of approximately 535 USD per ounce and operations are now past the break-even point and continuing to grow.

– Initiation of new projects
Newlox Gold has already informed the market of two potential prospective areas suitable for gold extraction in Brazil. The projects are currently in due diligence. The initiation of these projects should be an important catalyst for the company. Other potential new markets for projects could be Ecuador, Peru, Colombia, Chile, Giana and Nicaragua (in which the company believes they are close to signing a deal according to the latest investor webinar 13/7 2021).

-Licensing of technologies
With the unique technology that Newlox Gold is developing we would not be surprised if the company took the chance to earn licensing fees from this once the technology is fully protected.
The mining industry has historically been very conservative since companies spend millions of dollars derisking projects with various tested and tried technology features. Newlox Gold will use their inhouse developed technology themselves and will have plenty of demonstration facilities to show potential customers if their various technology projects are proven to be successful.


-Expansion in Costa Rica
According to the latest operational webinar by Newlox Gold (13/7 2021) there are two other areas where the company could potentially expand into two other locations , these locations are according to the company a bit trickier to expand into due to regulatory factors however it’s not something that management is ruling out.


-JV partners
It’s not unlikely that the company might be approached by large joint venture partners who are interested in doing mutual projects using Newlox Gold technology. This could also provide an important share price catalyst. In the latest operational webinar (13/7 2021) management expressed that expansion beyond Latin America would likely be in the form of a Joint venture partnership.

-ESG premium on gold sales
It’s not inconceivable that a gold producer like Newlox Gold may be paid premium prices for their gold if they can develop some form of ESG standard that consumers are willing to pay higher prices for. With the global consumer market becoming increasingly aware of the environmental and social aspects of mining production this could prove to be an important differentiator.

-Profitability leading to dividends                 
Management has ambition for Newlox Gold to become a company that can pay out sizeable dividends and with their smart low capex business model this should prove to be an exciting upcoming catalyst.


– Quicker expansion with debt financing
The company currently only has roughly 4 million CAD in convertible debenture on the liability side.
A faster expansion with the help of loans and other types of debt financing could prove very lucrative for Newlox Gold. Stated during the investor webinar (13/7 2021) CEO Ryan Jackson does not rule out debt financing however plant 1 needs to come into full production in order to prove the business model for debt financing from banks.  Since the company is currently fully funded for their first two projects and the due diligence period in Brazil, they count on being able to finance forward capex through a combination of internal cashflow, the continued exercise of existing convertible securities, and potential outside investment.


Risks associated with an investment in Newlox Gold

Although we at ESGFIRE consider Newlox Gold to be a far less riskier investment than other junior gold miners there are several risk aspects that investors need to be aware of.
The section below addresses some, but not all, risks associated with an investment in Newlox Gold.

Political risks
The current geographical locations which Newlox Gold are currently active in (Costa Rica + Brazil) have stable democracies and prospering economies however, as these are located in Latin America, this is not something which can be taken for granted. Investors should be aware that political turbulence can affect an investment in the company negatively.

-Uncompliant local miners
One risks risk is that the local miners may not want to participate in the company’s endeavours, but these projects have government support because of the environmental concerns. Seeing as local miners also make the same amount of money with far less work, we view this as a miniscule risk.

-Fluctuations in gold prices
Gold prices are currently at an historical all time high. Fluctuations in gold pricing will most certainly affect the profit and revenues of Newlox Gold. The advantage that Newlox has however is that their cost of production is considerably lower than for other junior gold miners. However, this is a risk that must be considered.
https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart

-Covid-19
Production had to be shut down in June 2020 at Newlox plant 1 due to Covid-19 and was reopened in November the same year. Production remained steady throughout the second wave of cases in Costa Rica so hopefully the facilities should be able to work without shutting down despite new waves of Covid-19. This is however a risk that should be addresses since production could be halted at some or all facilities if there is a peak in local cases.

-Technology intrusion
Newlox Gold has the ambition to patent their unique OAR technology. Since the technology is revolutionizing it’s not unlikely that competitors may attempt to either reverse engineer or simply copy the technology which could result in costly legal battles for the company.

-Technology risks
Newlox Gold’s revolutionizing OAR (organic aqua regia) technology has yet to be tested on a large scale. The company has received results which are very promising and at this stage it’s a matter of being able to scale at a big enough size. One interesting aspect of this is being able to recycle the reagent of the process which commercial actors have shown interest in. Should the technology not work on a large scale this could significantly affect the company’s business model.


Management overview

Our loyal followers know we only invest in companies that have a great management team and our investment in Newlox Gold is no different. The company hosts an impressive line-up of executives and advisors described below.
Management team

Further introduction:

Ryan Jackson CEO
Holds degrees from McGill University in environmental science, with an emphasis on human health, and political science. He has worked in the mining industry both in the field and in the boardroom and spent three years as the Canadian editor of an international mining industry magazine. Ryan’s experience in the industry includes field work, primarily in Latin America, as well as business development in North America, Europe, and East Asia.

Jeffrey Benavides CFO
Jeffrey Benavides, Chief Financial Officer – Resides in Costa Rica and manages the accounts payables, receivables, payroll, cost controls, purchasing systems, and inventory control. He is an experienced chartered accountant and computer engineer with extensive managerial experience and a background in mining. Mr. Benavides has over a decade of experience in mining in Latin America and manages a capable team of engineers, geologists, and technical personnel.

Dr Giorgio de Tomi – a valuable edition for the Brazilian expansion!

Dr. de Tomi has over 30 years of experience in the resource sector and has a degree in mining engineering from the University of Sao Paulo, a Ph.D. from the Imperial College, London, and an MSc from Southern Illinois University, USA. He leads the Centre for Responsible Mining, at the University of São Paulo (USP) in Brazil, as an associate professor and former Head of the Department of Mining and Petroleum Engineering. Dr. De Tomi is a Fellow of The Institute of Materials, Minerals & Mining (FIMMM, UK), Chartered Engineer CEng (Engineering Council, UK). He is a member of SME (USA) and acts as mining QP and CP for numerous mining enterprises worldwide. Currently, he is a member of the Technical Board of CBBR (Brazilian Commission for Mineral Resources and Reserves), a member of the Executive Board of EMBRAPII’s Unit Tecnogreen, a Research Scholar with FAPESP and CNPq (Brazil) and a member of the Editorial Board of the Mining Technology journal and the Brazil Mineral journal (Please see the link here to Dr. De Tomi’s professional biography: https://bit.ly/3qd93PQ).We believe the recent addition of Dr De Tomi will be very valuable for Newlox Expansion into the Brazilian market since he has an extensive contact network and has professional experience working  in Brazil.

Advisory board

Further introduction:
Marcello Veiga, Chief Technical Advisor – Has over 40 years of experience in the resource field, including degrees in Metallurgical Engineering, Environmental Geochemistry, and a doctorate in Mining and Mineral Process Engineering. Dr. Veiga is a professor at the Norman B. Keevil Institute of Mining Engineering at the University of British Columbia and was the Chief Technical Advisor of the GEF/UNDP/UNIDO Global Mercury Project based in Vienna. Marcello is the global academic leader in artisanal mining and is a well-versed in the technical, environmental, and social challenges of working with artisanal mining. Doctor Veiga is considered one of the leading scientists of the global mining industry and his participation in Newlox Gold is an extreme quality stamp for Newlox Gold.

Competitors

Below is not a complete list of competitors but we have chosen the most relevant ones for Newlox Gold comparison.

Bactech Environmental corp – Market cap 9 MCAD
https://bactechgreen.com/

BacTech’s is planning to build a 50 tonnes per day bioleach plant capable of treating high gold/arsenic material in Ponce Enriquez, Ecuador. According to their calculations A 50 tpd plant, processing 1.5 ounces of gold per tonne of feed, would produce approximately 26,000 ounces per year. Plant designs are modular and can be expanded without affecting ongoing production. The actual capex per plant is calculated at approximately 10M  USD which is 5 X more than the capex of Newlox Gold. However, test results have shown promising results with gold recoveries of 99.4% and 100% for prospective plant feeds validated (announced April 21, 2021) through ongoing ALS diagnostic test work. The first plant is planned to commence construction in Q1 of 2022.The company seems promising but have not yet proven anything on a larger scale.



Dynacor – Market cap 98 MCAD

Dynacor is a dividend-paying industrial gold and silver ore processor headquartered in Montreal, Canada. The corporation is engaged in gold production through the processing of ore purchased from the ASM (artisanal and small-scale mining) industry. At present, Dynacor operates in Peru, where its management and processing teams have decades of experience working with ASM miners. It also owns a gold exploration property (Tumipampa) in the Apurimac department. They are expecting to process approximately 375 tons per day in 2021.  Dynacor produces environmental and socially responsible gold through its PX IMPACT® gold program. The artisanal miners benefit via reinvestment of the premium into their communities Dynacor is trading at P/E ratio of 20 which makes us confident that Newlox Gold should at least be trading in the same range. The fact that they have been able to sell gold at a premium also makes us confident Newlox Gold should be able to do the same thing.

Conclusion

We believe Newlox Gold is the most ESG friendly and safest (although obviously not risk free) bet on gold in the public market. Their technology has largely been proven, they are approaching full production and their capex is currently fully funded. Management has a great track record and the participation of Doctor Vega and Doctor De Tomi adds both credibility and serious leverage when negotiating with governments and other stakeholders. What remains to be seen is if management can scale up as quickly as they have planned, according to management it does not seem to be a lack of potential mining sites in their targeted geographical area. With close to a 30 bagger potential based on the company’s own 5 year projections excluding any potential licensing revenues or JV projects. We believe now is the time to jump on the journey with Newlox Gold and that this is truly an investment everyone can feel good about from an ESG perspective. The company  truly improves both the environment and the social aspects of the local population on all fronts where they are in business.

3 quick questions with Ryan Jackson, CEO of Newlox Gold

ESG: 1. What catalysts are you most looking forward to in the next 6 months for Newlox Gold?

Ryan:
Newlox Gold has four main initiatives currently underway; ramp-up of productivity at Plant 1, construction at the Boston Project, expansion into the Brazilian market, and technology development. In the next six months, we believe that the catalysts will be the achievement of full-scale operations, and the associated cashflow, at Plant 1, commissioning of the Boston Expansion Project in Costa Rica, and the announcement of our first Brazilian project.  


ESG : 2. How do you view your current funding capabilities and liquidity position?

Ryan:
The Company currently has a strong treasury and is fully funded for the ramp-up of Plant 1 and the completion of construction and commissioning at the Boston Expansion Project. Part of our financing strategy is the expectation that the Company’s investors will exercise their convertible securities. All the warrants outstanding a firmly in the money, and we are regularly receiving wire transfers to top up the Company’s treasury. This represents financing that does not require more legal or finder’s fees and supports Newlox’s regional expansion strategy. The combination of internal cashflow and financing from warrant exercise will likely make up a large percentage of the initial funding for our medium-term plans.


ESG: 3. What do you see as the biggest challenges for Newlox Gold to reach its goal of extracting +145,000 ounces of gold in 5 years?

Ryan:
Newlox Gold is growing rapidly; however, it is still a small company. Because of this, human resources are the major consideration when executing our regional growth strategy. We have access to a strong pipeline of expansion projects in many countries, the major reason we picked Brazil is because Company has excellent contacts there including experienced and trustworthy engineers and geologists. Growing our team, especially in new jurisdictions, will be an exciting challenge for us but we benefit from the legions of young engineers who have trained under Dr Veiga, Dr De Tomi, and Dr Sobral over the years.


[1] https://ticotimes.net/2020/12/18/costa-ricas-electric-grid-powered-by-98-renewable-energy-for-6th-straight-year


[1] https://www.stockwatch.com/News/Item?bid=Z-C:LUX-3026396&symbol=LUX&region=C

[2] https://www.oecd.org/daf/inv/mne/artisanal-small-scale-miner-hub.htm

[3] https://www.epa.gov/international-cooperation/artisanal-and-small-scale-gold-mining-without-mercury

[4] https://ticotimes.net/2020/12/18/costa-ricas-electric-grid-powered-by-98-renewable-energy-for-6th-straight-year

Legal Disclaimer:

We own shares of this company personally.

Investing in stocks is combined with certain risks and it is possible to lose your entire investment. My posts are made for Educational purposes only and are not to be interpreted as tips , financial advise or recommendations of any kind to either buy or sell any stocks.

Companies may or may not be paying us for content posted on this blog.

CIELO ANNOUNCES THE CLOSING OF THE PURCHASE OF THE FORT SASKATCHEWAN INDUSTRIAL SITE AND CDN$12M LOAN

Ticker: CMC.V / CWSFF
Listings: TSX Venture Exchange / US OTC / Frankfurt
Website:https://www.cielows.com/
Market Cap: 697 MCAD at time of publication
Share price: 1.08 CAD at time of publication
Industry: Converting waste to renewable fuel

Cielo Waste Solutions has today announced that it has closed on the acquisition of a 60 acre industrial site with a 31,750 square
foot industrial building in Fort Saskatchewan, Alberta . The Company also
announces that, immediately prior to the closing of the acquisition of the Property and
completion of the Loan, it repaid an existing loan with a principal amount of CND$1M.


Cielo management believes it has received substantial savings on this asset. The
previous owner developed the Property in 2014/2015 and spent approximately CDN$22M
on site development, compaction and gravelling of the entire yard, which is also fenced
and lighted, and the erection of a sizable building that Cielo can utilize for its purposes.


Cielo was able to purchase the Property for CDN$13M, a net realized savings of
approximately CND$9M as well as construction costs
. In addition to the cost savings, the
site has been more than adequately prepared for Cielo to begin planning its waste to fuel
facility and therefore save substantial time in development.


Don Allan, President and CEO of Cielo, stated: “We believe this location will quickly
advance Cielo’s commercial development in Canada’s largest hydrocarbon industrial
park. We have Canada’s two largest rail companies with their rail yards in direct sight,
offtake customers for our waste to fuel products, feed stock suppliers and all required
subtrades and service vendors in close proximity.”
The Company, as borrower, concurrently closed a CDN$12M mortgage loan (the
“Loan”) from First Choice Financial Incorporated (“FCF”) and KV Capital Inc. (“KV”), as
lenders. The Company used the net proceeds from the Loan towards the purchase
price of the Property. The Loan is subject to an annual interest rate of 6% and is
secured with the assets of the Fort Saskatchewan and the Aldersyde facilities. The
Loan has a 12 month term, which is subject to automatic renewal at the end of the
original term for further six month periods in consideration for a renewal fee equal to
1.5% of the then outstanding balance, subject to the lenders’ rights to terminate the
automatic renewal at their discretion.
The Company has issued 12,000,000 non-transferable share purchase warrants (the
“Bonus Warrants”) as inducement for the Loan. Each Loan Bonus Warrant will entitle
the holder to purchase one common share of the Company at an exercise price of
CDN$1.00 for a period of 36 months, however, in the event that the Loan is repaid in
whole or in part during its term, a pro rata number of the total Bonus Warrants will have
their term reduced to the date that is 90 days from such repayment.
The TSX Venture Exchange (the “TSX-V”) has conditionally approved the terms of the
Loan and the Bonus Warrants, noting the terms thereof had substantially been agreed
upon prior to the listing of the Company’s shares on the TSX-V.


Don Allan further states: “We also appreciate FCF’s continued support of Cielo and belief
in our vision for the Company to become a leader and dominant player in the renewable
energy sector. We want to thank FCF as their investment in Cielo over the last year has
firmly positioned Cielo with the capital needed to complete several ongoing initiatives.
FCF also introduced us to KV, who has shown strong interest in supporting Cielo with
future financing opportunities.”


Vikas Sharma, President of FCF, stated “First Choice Financial is proud to be a funding
partner of Cielo Waste Solutions. FCF always looks for companies with unique business
models to assist them in achieving their goals. FCF is proud to support Cielo which, we
believe, through their hard work and propriatery technology, has the potential to change
the world as we know it. Plastics, landfill waste, and emissions are all global problems
and we believe Cielo has the ability to transform the way the world deals with these
issues, which have real life impacts to our environment and health. We are pleased to be
supporting Cielo’s decision in acquiring this new land as they have proven their
technology through their existing Aldersyde facility, and expansion seems to be the next
logical step. FCF has been a long time supporter of Cielo and its global mission and looks
forward to further supporting Cielo in its future endeavours and being a trusted ally in
building a sustainable future.”


Aleem Virani, KV Capital’s CEO, stated “This financing is another example of KV Capital’s
commitment to the success of its clients through our focus on making complex financial
transactions as simple and efficient as possible. We are proud of our team’s flexibility,
creativity, and speed of execution in completing this deal and our role in supporting the
growth of an innovative and dynamic company like Cielo.”

ESG comments: We are please to see the purchase of the Fort Saskatchewan site finalize.
This is yet another important pusle piece coming together for the massive expansion of Cielo Waste Solutions.
We are also eagerly awaiting to hear , hopefully within 4-6 weeks, on the progress of the
dezulphurisation process currently being installed at the Aldersyde site.

Legal Disclaimer:

We own shares of this company personally.

Investing in stocks is combined with certain risks and it is possible to lose your entire investment. Our posts are made for Educational purposes only and are not to be interpreted as tips , financial advise or recommendations of any kind to either buy or sell any stocks.

Companies may or may not be paying us for content posted on this blog.