("CIA" or the "Company")
Trading Update and Financial Reporting
Financial Reporting
CIA announces that, further to the guidance provided by Aquis on
CIA will today be announcing and publishing on its website its unaudited financial results for the year ended
The Company will highlight any material difference that may occur between the unaudited and audited accounts, when the audited Report and Accounts are announced.
CIA trading update
CIA is also pleased to provide this trading update in relation to CASA and Coaltech, (together referred to below as “Coaltech”). Whilst the past few months have been extremely challenging Coaltech is looking forward to the next period with significant optimism due to the substantial and strong pipeline and in addition a developing opportunity to expand beyond coal.
Bulpan Production facility
As announced on
Net creditor days has been extended beyond its normal anticipated ratio and management continues to closely manage impacted creditors, but overall, creditors, which are largely trade and routine, have and continue to be very supportive. CIA is also currently renegotiating its outstanding convertible loan to certain Directors and expects a satisfactory outcome in the near term.
Extensive and solid pipeline of opportunities
Notwithstanding the recent negative impacts discussed above, the Company and Coaltech are facing into the remainder of 2020 with renewed optimism and with an extensive and solid pipeline of opportunities. It is worth reiterating that the strategy of Coaltech is to secure long term, large scale customer relationships with whom it would develop one or more full scale plants and with long term offtake arrangements. Securing one such customer would be transformative, with any such project likely to have a project value well in excess of
The early stages of these commercial discussions typically also involve Coaltech running test batches. These batches are often initially small, for example 10’s of kilos and then increase to sample production size batches of, for example, 10’s of tonnes. Once batches are completed the outputs are exhaustively tested by Coaltech and by the potential client. This process is a considerable proportion of the Coaltech overhead and consumes the majority of the available production of the Bulpan production facility.
The Coaltech test production programme on the various ongoing client development opportunities had slowed to a very much reduced pace due largely to Covid-19. Between June and so far in July only one customer received a sample of pellets due to the various limitations still in force then.
Examples of active commercial opportunities
However the Coaltech pipeline for coal fines is substantial and robust and continually developing. Examples of the primary commercial opportunities for coal, currently in process, include:
1. Power generator client 1: Initial pellets produced and delivered to client
early June 2020 . Revised testing schedule with target date for a further
20Kg sample and then a 1,000Kg sample in August and September 2020 . The
final outcome of this testing programme if successful is the development of
a circa 30,000 tonnes/month dedicated plant. Investment would be in the
range of $10m-$12m .
2. Power generator client 2: 6,000Kg sample production anticipated 3rd week of
July. The final outcome of this testing programme if successful is the
development of a further circa 30,000 tons/month dedicated plant.
Investment would be in the range of $10m-$12m .
3. Coal Clients 1 &2: pellets produced end June and 1st week July
respectively, one client is executing internal testing, waiting for
results, although initial indications are quite positive, the second client
is organizing post covid logistics. The final outcome of these two testing
programmes if successful is the development in each case of a 10,000
tonnes/month dedicated plant at a coal mine. Investment would be in the
range of $6m-$7m per client.
4. Central Asia client: coal fines received in June, material was initially
too coarse and required crushing which has taken place 2nd week of July,
pellets production scheduled for 3rd week of July then the pellets will be
sent for independent analysis in South Africa and eventually sent to
Central Asia . The final outcome of this testing programme if successful is
the development of several 30,000 tonnes/month dedicated plants for their
mines across the region. Investment would be in the range of $10m-$12m for
each such plant.
5. Local Client RSA: coal fines sample received 1st week of July, pellets
production scheduled for 4th week of July. This local industrial user
seeks, subject to the outcome of this testing programmes and commercial
negotiations, the development of a 5,000 tonnes/month dedicated plant.
Investment would be in the range of $3m-$4m .
6. Southern African colliery. A large mine with millions of coal fines at
their mine, have already signed an indicative MOU with Coaltech and further
commercial discussions are underway. Delivery of material for testing
currently delayed due to Covid-19. The final outcome of this testing
programme if successful is the development of a circa 30,000 tonnes/month
dedicated plant at the colliery location. Investment would be in the range
of $10m-$12m .
The above are illustrative of the demands on the Bulpan production facility and the potential opportunities, all of which are of course subject to commercial negotiations. The long sales cycle is typical in this industry and is reflected in the long-term relationships that result if negotiations are successful. Further opportunities at various stages of development are under discussion across multiple continents. The above opportunities all relate to coal fines processing.
Business Development
Further business development is underway to expand beyond coal and a further announcement will be made in due course.
“We are confident, notwithstanding the much longer than expected lead times, that CASA and CoalTech can turn some of the existing opportunities into commercial contracts and expand further in
The Directors of the Company accept responsibility for the content of this announcement.
ENQUIRIES:
Company
Telephone: +973 3 9696273
Corporate Adviser
Telephone: +44 20 7469 0930
