Mr. Chris Robertson reports
VIRIDIS ENERGY SIGNS LOI FOR OFF-TAKE AGREEMENT WITH LEADING ASIA DISTRIBUTOR HERACLES INTERNATIONAL
Viridis Energy Inc. has entered into a letter of intent with HeraclesInternational Investment Inc. to supply palm kernel shells (PKS), anatural pellet used for heating and co-firing with coal. The letter ofintent specifies an off-take agreement that contractually will obligateHeracles to initially purchase a minimum of 40,000 metric tonnes orapproximately $2.8-million of PKS per month from Viridis.
Palm kernel shells are the byproduct of palm plant processing throughwhich palm oil is extracted. During the process, which the palm kernelsare mechanically extracted from the shells, the shells are crushedrendering them a non-fossil, virgin biomass with a high calorific value.PKS have very low ash and sulphur content making it a high grade solidrenewable fuel for burning.
Heracles International Investments, headquartered in Hong Kong, withbranches in Canada, China and Singapore, has established aninternational business throughout East and South Asia (encompassingKorea, Japan, Thailand, Indonesia, the Philippines and the PeoplesRepublic of China), Europe and Africa over its 15 year history. Withits success in the trading industry, Heracles diversified its businesswith investments in green energy, biomedical, mining and real estate.
Under the terms of the agreement, Heracles will serve as exclusive agentin the greater China area, which consists of mainland China, Taiwan,Hong Kong and Macao, for all the Viridis' biomass products. In return,Viridis will be the exclusive biomass supplier to Heracles in thegreater China area. The initial term of the off-take agreement withHeracles is for one year, which is automatically renewed at the end ofeach year for an aggregate term length of 10 years. To support Viridisin overseeing this key project, it has secured the services of Dr.Chenguang Jiang who will serve as the Company's senior liaison andadministrator of the business between Viridis and Heracles, facilitatingthe rapid expansion of biomass energy business in Asia. Dr. Chenguang,who received his doctorate in biological chemistry from University ofBritish Columbia, is a senior researcher and development scientist inthe biology and biomedical industry, with over 10 years of extensive anddiversified experience.
"This pending agreement with Heracles will provide material progress inforwarding our diversification strategy into agri-biomass. Ourproprietary biomass additives played a key role in Heracles' decision topartner with us," said Chris Robertson, Viridis' chief executiveofficer. "Based on Heracles' knowledge of the market for renewableenergy in Asia and their extensive distribution and logisticscapabilities, they expect their monthly demand may exceed the initialvolume of 40,000 metric tons over time. The agreement is projected togenerate gross revenue in the range of $2.8 million per month or $33.6million over the first twelve months, from which Viridis expects to netapproximately 10% to 15% after all costs."
We seek Safe Harbor.