Australia-headed biotech developer Leaf Resources Ltd has announced the signing of binding legal agreements with US-based project developer Claeris, LLC (Claeris), to establish a joint venture (JV) entity, Leaf Development, LLC, for the purpose of developing up to five renewable chemical projects that utilise Leaf Resources’ proprietary Glycell process.
According to Leaf Resources, Claeris has a proven track record of developing successful, large-scale renewable projects and believes that both the investment community and chemical industry are keen to participate in well-structured, well-credentialed renewable chemical projects.
We have reviewed many emerging technologies in the renewable chemical sector, but we have not seen anything quite as revolutionary and potentially profitable as Leaf’s Glycell process. After a detailed technical and financial review of the Glycell technology, we are convinced that Leaf has the best process on which to base a platform company of renewable chemical projects. We are confident that we can secure the key project partners necessary to quickly develop our first project, commented Michael Slaney, Managing Partner of Claeris.
Leaf Resources will provide a license for its Glycell process for the five projects and technical expertise as required. The agreements, which are subject to performance hurdles for both Claeris and Leaf Resources, allow for Leaf Resources to own up to 75 percent of Leaf Development.
We believe our arrangement with Claeris has put Leaf Resources firmly on its next phase of growth, as it will accelerate the commercialisation of the many opportunities available to us in the renewable chemical markets. We expect leveraging Claeris’ experience, network, and expertise will position us to achieve better and quicker economic outcomes for Leaf, said Leaf Resources’ Managing Director Ken Richards.
Leaf Resources’ previously announced joint ventures and MoUs with Monaghan Mushrooms, ZeaChem, and projects related to rice husks are excluded from the Claeris arrangement. Leaf Resources will continue to develop these pre-existing partnerships.
Leaf Resources will provide ongoing funding for Leaf Development in return for increased equity ownership. Initial funding of US$750 000 will be met from Leaf Resources’ internal sources. On the basis that Leaf Developments meet specified project milestones a further US$1 million may be due on October 31, 2016. These funds will be used by Leaf Development for permitting, engineering, management, consulting fees, and other costs relating to the development of commercial-scale projects.
Further capital contributions from Leaf Resources will fund costs principally associated with engineering design and feasibility studies and will be required as projects are successfully identified and advanced. Each project will be externally financed as a standalone operation.
Leaf Development expects to recoup the funded development costs, as projects are brought to construction. Claeris will invest US$500 000 in Leaf Resources at an issue price of AU$0.125 per share and will also be issued approximately 1 560 000 options in Leaf Resources at an exercise price of AU$0.1375. The options have a five-year term, with one-third vesting each year after issue.
While the scale of the first facility is not yet finalised, the parties believe a facility with a feedstock capacity of 100 000 bone dry tonnes per annum makes economic and technical
sense.
