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Carbonxt Group
Investor Insight
In an increasingly eco-conscious global market, Carbonxt makes a compelling investment case leveraging a current, approximate US$900 million addressable market, driven by a strategic joint venture that presents strong revenue and growth potential. This addressable market is anticipated to grow three to five fold to more than US$2 billion following the introduction of new rules to capture forever chemicals.
Overview
Activated carbon is typically derived from sources such as coconut husks and coal, and is among the most common ways to filter contaminants from both water and air.
Activated carbon is so named because the process by which it's produced oxidizes the carbon, 'activating’ a series of small, low-volume pores that considerably increase its surface area. There are a few different methods for producing the material, including carbonization, gas treatment and chemical treatment. It is also invaluable for a wide range of use cases across multiple industries, including healthcare, chemistry, agriculture, oil & gas and even food preparation.
For large-scale industrial use cases, activated carbon typically comes in one of three forms: powdered, pellet and granular. Depending on how the material is treated post-oxidation, activated carbon can be tailored to a multitude of individual use cases. For large-scale use, material cost can range from US$2,000 per tonne to as high as US$6,000 per tonne, presenting a considerable opportunity in activated carbon.
Carbonxt Group (ASX:CG1) is positioned to take full advantage of that opportunity. An innovative manufacturer of custom activated carbon, Carbonxt has locked in a joint venture with US-based partner Kentucky Carbon Processing, forming the joint venture NewCarbon, and effectively expanding Carbonxt’s addressable market and gross margin.
Much of this growth will be courtesy of a new Kentucky facility focused primarily on water treatment. This facility will leverage two pieces of legislation recently announced in the United States — the Environmental Protection Agency's (EPA’s) Clean Water Act and the Bipartisan Infrastructure Deal. The former aims to reduce pollution caused by polyfluoroalkyl substances (PFAS), while the latter provides a total of $10 billion in funding to help companies reduce PFAS contamination.
PFAS are a set of widely-used chemicals that take an incredibly long time to break down. Found in soil, water, air, fish and humans, multiple studies have linked PFAS to severe health problems, which include birth defects, developmental delays, thyroid disease, high blood pressure and increased risk of several types of cancer.
It’s why the EPA is cracking down hard on these chemicals, with additional regulations being proposed to further protect communities from the serious effects of PFAS. These regulations, which are set to begin enforcement between 2024 and 2028, will require the majority of companies in the water industry to upgrade their filtration systems.
Carbonxt provides products specifically targeting PFAS removal. Through the NewCarbon joint venture, the company intends to convert a waste-to-energy plant into an activated carbon plant, considerably increasing its production capacity and allowing it to directly serve the roughly 50,000 water utilities in the United States, which together account for roughly 50 percent of the granular activated carbon market.
If all goes as planned for Carbonxt, it will fully disrupt that market, unseating the current leader.
Company Highlights
- Carbonxt Group is a manufacturer of patented activated carbon products designed to treat toxic pollutants in both air and water. For example, Carbonxt Group has been awarded a US$159,000 (AU$240,000) research grant by the Florida state government to advance a groundbreaking water remediation study to combat the negative impacts of algae growth on coastal communities.
- Carbonxt currently has an addressable US market of US$290 million with a 5 percent market share. Its joint partnership with Kentucky Carbon Processing has the potential to increase this addressable market to more than $900 million.
- Together, Kentucky Carbon Processing and Carbonxt will form the joint venture company NewCarbon, affording Carbonxt several advantages:
- Increased US-based production capacity to over 20,000 tons per annum with the potential for further expansion.
- Control over input costs, considerably improving base margins.
- High-quality raw materials.
- In the near future, much of Carbonxt's growth will be driven by the United States Environmental Protection Agency's increasing regulation of PFAS.
- There are currently 50,000 water utility companies in the United States, 4,000 of which serve 10,000 or more customers. Collectively, they account for roughly 50 percent of the granular activated carbon market with annual expenditures of over US$300 million.
- Carbonxt is well-positioned to serve these companies, providing activated carbon pellets that offer improved filtration with a lower pressure drop as a replacement for granular activated carbon.
- In addition to a highly experienced leadership team, Carbonxt’s strong revenue and earnings growth potential from NewCarbon make the company an attractive investment prospect.
Core Product
High-performance Activated Carbon
Carbonxt designs specialized activated carbon products for its customers, which consist primarily of industrial sector organizations and power utilities. Available in pellet and powder form, the company's oxidizing, non-brominated activated carbons are non-corrosive and designed to remain efficient throughout their entire lifecycle. Although Carbonxt’s origin and listing is in Australia, its products are manufactured and distributed exclusively within the United States.
Carbonxt is currently focused on developing an activated carbon manufacturing facility in Kentucky, the result of a joint partnership with Kentucky Carbon Processing. Once this facility is operational, water utility companies are expected to form a much larger part of its customer base. The facility is also expected to re-invigorate the company's industrial pellet market sales.
Highlights:
- Strong Market Outlook: Industry demand for powdered and pelletized activated carbon remains strong. Prices have trended considerably upwards over the past year and will likely continue to do so for the foreseeable future.
- Pricing Trends: Carbonxt's primary competitors in the activated carbon market have both announced price increases ranging from 15 to 40 percent. The company's activated carbon products have the potential to offer better filtration at a considerably lower price point.
- Looking Up: Carbonxt has also recently improved its existing carbon manufacturing facilities. This has translated to a more than 20 percent increase in gross margins in the last financial year, with further double digit percentage gains expected in FY24.
- Making a Good First Impression: Carbonxt's high-specification sample products have been well-received by end customers. Management is currently in talks with numerous water utilities to purchase capacity from the company's new facility once it comes online.
- Use Cases: Carbonxt currently manufactures activated carbon products for the following:
- Powdered activated carbons for mercury and flue gas component removal. Customers for this use case include coal-fired power plants, cement plants and industrial boilers & incinerators. Carbonxt manufactures a specialized activated carbon for each type of customer.
- Pelletized activated carbon for the removal of VOCs and hydrogen sulphide from gas streams.
- High-quality pelletized activated carbons designed to remove drinking water contaminants as well as taste and odor compounds.
- Contract Agreements: Carbonxt has secured a $4.3 million purchase order for activated carbon (AC) products from US utility Wisconsin Public Service. The company also secured a four-year contract extension to supply premium PAC products to Reworld, a global leader in sustainable waste solutions. The deal will generate group revenues of approximately $6 million per annum for the duration of the contract.
Management Team
David Mazyck – President, NewCarbon (the Kentucky JV) and Director of Technology
Dr. David Mazyck is a world-leading expert on activated carbon (AC) and its applications including mercury capture. He has developed AC products for major multinational AC manufacturers and has regularly consulted them on technical issues. Mazyck is the former chairman of the Activated Carbon Standards Committee for the American Waterworks Association and has developed products for NASA.
He received his PhD in environmental engineering from Penn State University, where he also earned a PhD minor in fuel science.
Matthew Driscoll - Chairman
Matthew Driscoll has significant experience across several industries, including online technologies, financial services, fintech, cleantech, property and resources. He has more than 30 years’ experience in capital markets and the financial services industry and is an accomplished company director in roles across listed and private companies.
He has significant experience in international business growth, mergers and acquisitions, equity and debt raisings and building strategic alliances. His current directorships include NED Energy Technologies, NED Blina Minerals, NED Eco Systems, and NED Smoke Alarms Holdings.
Warren Murphy - Managing Director
Warren Murphy has led a large number of acquisitions and financings across the energy, resources and infrastructure sectors. This includes the development of over 2,000 MW of Greenfields power stations and the acquisition of over 3,000 MW of generation assets.
He was co-head of the Australian Infrastructure & Project Finance Group and Head of Energy at Babcock & Brown based in the Sydney office and led the development of Babcock & Brown’s energy sector capability in Australia and New Zealand, including the founding of Infigen Energy and its unlisted predecessor, Global Wind Partner, where he served as a director from inception until June 2009.
Murphy was also a director of the ASX-listed Alinta and Sydney Gas, as well as the unlisted Coogee Resources.
Dr. Regina Rodriguez - Senior Executive
Dr. Regina Rodriguez has a PhD from the University of Florida, where she received the prestigious National Science Foundation Graduate Student Fellowship. She was the chairperson of the Activated Carbon Standards Committee for the American Waterworks Association.
Rodriguez holds nine patents. Her leadership has resulted in one-of-a-kind sorbents and systems for power stations and water treatment.
Imtiaz Kathawalla – Independent Director
Imtiaz Kathawalla was a vice-president at NYSE-listed Cabot Corporation, a global specialty chemical company where he had a 27-year career. Kathawalla's most recent position with Cabot Corporation was as general manager of Cabot's purification solutions division. He ran the group's US$300-million global activated carbon business where he oversaw a material increase in EBITDA before managing the sale of the business to a large private equity group.
Nicholas Andrews – Independent Director
Nicholas Andrews has held the role of executive chairman and CEO at Magontec (ASX:MGL), an established business in the global magnesium sector. He is a member of the executive committee and serves on the board of the International Magnesium Association. Prior to his executive career, Andrews held several senior roles in the financial services sector across both investment management and investment banking.
Troy Minerals Reports Drilling Results from the Lake Owen Project, Wyoming. Critical Minerals inclusive of Scandium (Rare Earths Element) Discovered
In Q3 2024, the Company drilled two diamond holes totalling 607.77 metres (see Table 1). The holes were scouting in nature, drilled near the southwestern claims boundary and they represent the first holes drilled by Troy Minerals on the Project (see Figure 3). This release is for all initial selective core samples for which analytical results have now been received. Follow up infill / continuous sampling results are pending and once received and processed, reported intersections will be recalculated.
Key Highlights
- The two DDH holes at the Lake Owen Project targeted titanium (TiO2) and vanadium (V2O5) mineralization associated with magnetite in gabbro, as well as potential reef style PGE mineralization.
- Although sampling along the holes was visually selective, associated with high magnetite zones, several anomalous zones of Titanium (>1%) have been encountered.
- Elevated values of Vanadium are also associated with increased titanium enrichment.
- Most importantly, associated with these anomalous zones, is elevated concentration of Scandium (Sc), a rare critical metal belonging to the REE group with no domestic supply in the United States.
"The first hole drilled by Troy at our Lake Owen project, from historical data knowledge, was planned targeting to intersect magnetite, titanium and vanadium mineralization; beyond that, it also revealed seriously elevated Scandium, a rare-earth element (REE), classified by the USGS as a critical metal." said Yannis Tsitos, President of Troy Minerals. "Scandium has green-energy technologies applications, but additionally it is the most effective known microalloying element that can strengthen aluminium, while also offering improved flexibility, resistance to heat and corrosion, and lighter weight, therefore Scandium finds applications in the space, military and civilian aviation industries. We have recently expanded our total Claims footprint over the mafic layered intrusion at Lake Owen in Wyoming to 185 Claims and Troy is currently designing the 2nd Phase, summer 2025, exploration program."
Figure 1. Lake Owen, Location Map, Wyoming, USA
Figure 2. Lake Own Project, Troy's Claims on Topo Map
Drilling Results & Exploration Outlook
Several anomalous zones of titanium (>1%) were encountered. Elevated values of vanadium are correlative with the titanium. Sampling was highly selective to assess various lithological units and all zones with magnetite content up to 15-20% and or visible sulfide mineralization. Magnetite content in the gabbro in hole LO24-01 is consistently about 5-10%. In LO24-01, the limited sampling to date suggests a large zone of titanium and vanadium-enrichment and higher relative values correlate with the green gabbro.
Figure 3. Drill Hole Locations on top of Geology and Company's Claims
Associated with these anomalous zones are elevated concentration of scandium. Anomalous values of scandium were found in sampled Mag Gabbro and especially with Green Gabbro zones containing >10% magnetite. Scandium is considered a critical metal by the United States Geologic Survey (USGS) and a rare earth element (REE). This presents an additional critical element with no current domestic supply. The USGS recognizes the critical metal potential of the Lake Owen Complex and flew an airborne survey over the entire complex in 2023, including all of Troy's claims. The high value of scandium coupled with the total dependence on the metal from China and Russia makes scandium a potentially high-value critical metal target for the Lake Owen Project.
Table 1: Drill hole specifications
Drill hole LO24-01 was designed to test the extent of the Lower Mag Gabbro down to the basement contact. Drilling revealed a series of interlayered magnetic gabbro and a distinctive coarse-grained green gabbro. The green coloration is imparted by pyroxenes altering to chlorite. These layers are generally constrained to widths of less than 4 metres.
Table 2. Drill hole LO24-01 intersections
1: All intersections lengths are drill indicated thicknesses; insufficient work has been completed to reliably determine true thicknesses.
2: Analysis of titanium and vanadium converted to titanium oxide and vanadium oxide using conversion factor of 1.6681 and 1.7852, respectively.
3: The release is for all initial selective core samples for which analytical results have now been received. Follow up infill / continuous sampling results are pending and once received and processed, reported intersections will be recalculated.
Drill hole LO24-02 was also planned to test the extent of the Lower Mag Gabbro as well as the contact with basement rocks. This was collared lower in the stratigraphic sequence than hole LO24-01 starting in a weakly magnetite gabbro. At 28 metres, weak to strong foliation or schistosity was present. This schist is likely of gabbroic to slightly granitic in composition. It is speculated that these schists reflect basement rock ripped up into the intrusion as large xenoliths.
The drill program was managed on-site day-to-day by BRS Engineering Inc. of Riverton, WY under the supervision of Troy personnel. The drill core was quick-logged at the drill site by BRS staff including collection of geotechnical, magnetic susceptibility data and selective testing utilizing an XRF device. Upon completion of drilling, all drill core was shipped directly to BRS Engineering's secure facility in Riverton, WY.
Drill core was detail logged and sampled by Company staff. Core was selectively sampled based on lithology and mineralization with 45 samples taken. Core was split by saw with samples sent to ALS Global's laboratory in Reno, NV for preparation and analysis. Samples were analyzed for multi-elements (ME-MS61) and gold plus PGE's (PGM-MS23L).
The Company's quality control monitoring consisted of inserting certified reference material in the sample stream. No quality control issues were identified.
Figure 4. DDH Cross Section, LO24-01
Drill hole LO24-02 intersected gabbroic units that are weakly magnetic and contain no anomalous values of titanium, vanadium, or scandium.
Only a very small portion of the Lake Owen Complex has been drill-tested to date. As currently mapped, the prospective Lower Mag Gabbro unit continues along strike to the west. The Company has yet to drill test the stratigraphically higher Upper Mag Gabbro. Surface mapping and sampling in 2023 identified two massive magnetite rock samples that returned 8.812% TiO2 and 0.548% V2O5, and 15.505% TiO2 and 0.586% V2O5 (Figure 5) These represent priority drill targets for 2025. An historical drill hole was completed here but there was no assessment of titanium, vanadium, or scandium.
Figure 5. Rock Geochemistry, Titanium
Rock sampling also returned four anomalous scandium results (>59 ppm): three collected from gabbro-norite outcrop within the mapped "Layered Unit" which strikes across the Property and is stratigraphically situated between the Upper Mag and Lower Mag Gabbro units; and one from near the collar of LO24-02, within the Lower Mag Gabbro (Figure 6).
Figure 6. Rock Geochemistry, Scandium on top of Airborne Magnetics (1st Vertical Derivative)
A massive magnetic anomaly due to the very high magnetite content that covers Troy's claims and the interpretation of the airborne magnetic survey will be reported and discussed in another news release in due course.
* Cautionary Note
The reader is cautioned that grab samples are selective by nature and may not represent the true grade or style of mineralization across the property.
Qualified Person
The information contained in this news release has been reviewed and approved by Ted Vander Wart, P.Geo., a consultant to the Company, who is a qualified person as defined under National Instrument 43-101.
About Troy Minerals
Troy Minerals is a Canadian based publicly listed mining company focused on building shareholder value through acquisition, exploration, and development of strategically located "critical" mineral assets. Troy is aggressively advancing its projects within the silica (silicon), vanadium, and rare earths industries within regions that exhibit high and growing demand for such commodities, in both North America and Central-East Asia. The Company's primary objective is the near-term prospect of production with a vision of becoming a cash-flowing mining company to ultimately deliver tangible monetary value to shareholders, state, and local communities.
ON BEHALF OF THE BOARD,
Rana Vig | CEO & Director
Telephone: 604-218-4766
Email: rana@ranavig.com
Forward-Looking Statements
Statement Regarding Forward-Looking Information: This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address events or developments that Troy Resources Inc. (the "Company") expects to occur, are forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include results of exploration activities may not show quality and quantity necessary for further exploration or future exploitation of minerals deposits, volatility of commodity prices, and continued availability of capital and financing, permitting and other approvals, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. Except as required by applicable securities laws, the Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.
The Canadian Securities Exchange has not reviewed this press release and does not accept responsibility for the adequacy or accuracy of this news release.
Carbonxt Group Investor Kit
- Corporate info
- Insights
- Growth strategies
- Upcoming projects