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Carbonxt Group Limited – September 2024 Quarterly Update
Highlights
- 4-year, $24m contract extension for the ongoing supply of premium PAC products to Reworld – an existing Carbonxt customer. Post quarter-end, Carbonxt commenced full-scale delivery of additional PAC volumes to Reworld from its Black Birch facility, in accordance with the contact terms.
- Quarterly revenue of $4.3m, with Powdered Activated Carbon (PAC) sales up 31% and Activated Carbon Pellets (ACP) sales up 27%, driven by increased demand from the power generation sector.
- Successful completion of a $3.02m capital raise, via the placement of 46.4m fully paid ordinary shares at $0.065 per share which was strongly supported by a network of sophisticated and high net-worth investors and family offices.
- Carbonxt made a further $0.625m investment in NewCarbon Processing, LLC (“NewCarbon”), the investment vehicle for the new state-of-the-art AC production facility in Kentucky jointly held with Kentucky Carbon Processing, LLC (“KCP”), with a further $0.625m to be completed in this quarter.
- Key construction works at the flagship Activated Carbon production facility in Kentucky were completed in the quarter; commissioning of the plant is now imminent with business development and operating processes being ramped-up.
Principal Activities
Carbonxt is a cleantech company that develops and manufactures environmental technologies to maintain compliance with air and water emission requirements and to remove harmful pollutants. The Company’s primary operations are in the US and include a significant R&D focus as well as manufacturing plants for activated carbon pellets and powder activated carbon. Carbonxt continues to expand its pellet product portfolio to address numerous industrial applications.
Managing Director Warren Murphy commented:
“The September quarter was highlighted by continued momentum across all our key growth drivers, with increased sales from existing operations complemented by the forthcoming commissioning of our state-of-the-art production facility in Kentucky.”
“With commissioning of the Kentucky facility now imminent, Carbonxt continues to execute on its strategy to deliver a step-change in growth and earnings, significantly scaling up its production capacity to meet the growing demand for premium Activated Carbon production in the US market.”
Overview
- Customer receipts for the quarter were $1.8m. As noted in the ASX announcement of 28 May 2024, Wisconsin Public Service (“WPS”) pre-paid for the volume delivered in this quarter. The pre-payment amount was received in the previous quarter and associated volumes have now been delivered in full. New business in the waste to energy market (see announcement of 17 October 2024) commenced on 1 October 2024 and these increased revenues will be seen the next quarter.
- Activated Carbon Pellet (ACP) primary sales during this period were higher by 27% for the quarter compared to last quarter as the WPS pre-paid volumes were delivered.
- Powdered Activated Carbon (PAC) revenue was 31% higher this quarter as compared to the prior quarter due to seasonally higher PAC usage in the summer by electricity utility customers.
Revenue and Operating Cash Flow
- Total revenue for the quarter was $4.3m with PAC sales contributing to 42% of this revenue. To mitigate the impact of seasonal fluctuations, which are a feature of the power generation sector, the Company continues to diversify its product offerings and expand into other markets, particularly in the water and wastewater sectors.
- As noted earlier, the Net Operating Cash for the quarter reflects the prepayment for 1,200 tons of ACP products from WPS in the prior quarter, with production and revenue recognition largely in this quarter.
- Revenue and cash receipts from the $6m p.a. contract extension with Reworld will be recognised in the December quarter, following the completion of first deliveries in October.
Figure 1 – Quarterly Net Operating Cashflows
Further Investment in NewCarbon
Carbonxt utilised part of its recent fundraising (see below) to meet the next instalment of its investment in NewCarbon. The total instalment is US$1.25m, with US$0.625m made in the quarter, with the remaining balance expected to be made by 15 November 2024. Carbonxt’s ownership stake in NewCarbon at the end of this September quarter is 38%.
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Troy Minerals: Targeting Near-term High-purity Silica Production in Mongolia and British Columbia
Troy Minerals (CSE:TROY;OTCQB:TROYF;FSE:VJ3);OTCQB:TROYF;FSE:VJ3), a rapidly emerging player in the critical minerals space, focuses on the development of high-purity silica and other essential materials for the clean energy transition. Troy Minerals has a diverse portfolio designed to capitalize on the increasing demand for raw materials needed in high-growth industries.
The company two high-purity silica projects: Table Mountain in British Columbia and the Tsagaan Zalaa project in Mongolia, both acquired through the strategic purchase of CBGB Ventures in September 2024. The projects are targeted for near term production, with Tsagaan Zalaa targeted to come online in 2025 and Table Mountain in 2026.
The Tsagaan Zalaa project is near the China-Mongolia border and is a near-term high-purity silica asset envisioned to commence production by 2025. The project’s proximity to key consuming markets, such as China, Japan and Korea, provides significant logistical advantages for the transportation of silica.
Company Highlights
- Troy Minerals acquired CBGB Ventures in September 2024, securing two flagship high-purity silica projects in British Columbia and Mongolia.
- The Tsagaan Zalaa project in Mongolia is being targeted to commence high-purity silica production by 2025, thereby positioning the company as a key supplier for solar and semiconductor industries.
- The Table Mountain project in British Columbia is being targeted to begin high-purity silica production by 2026, with a 24-month development timeline.
- High-purity silica, similar to the company’s projects, is critical for solar panel production, semiconductors, fiber optics and high-performance glass.
- The company also maintains an exploration portfolio of critical mineral assets, including vanadium and REE, in tier 1 jurisdictions.
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