Patience grasshoppers
Cielo Waste receives prepayment for 60,000 L of diesel
2020-11-23 10:07 ET - News Release
Mr. Don Allan reports
CIELO ANNOUNCES PRE-SALE OF RENEWABLE DIESEL AND PROVIDES BUSINESS UPDATE
Cielo Waste Solutions Corp. has received prepayment in full for 60,000 litres of renewable diesel, which is now being produced at the company's Aldersyde waste to renewable fuel facility. The renewable diesel will be shipped to a third party of the purchaser's choice once Cielo reduces the sulphur content of its renewable fuel down to less than 15 parts per million sulphur. (See desulphurization update below.)
Cielo has sold small quantities of renewable diesel in the past, however this sale marks the first commercial presale of 60,000 litres. Cielo received $1.25/litre from the purchaser, which is much higher than the cost to produce the renewable diesel, including the pending projected costs to lower the sulphur content to meet the diesel industry's spec. Management believes this premium price per litre confirms the purchaser's confidence in Cielo. The purchaser will be able to resell the renewable diesel it prepurchased, at a significantly higher price, early in the new year once the desulphurization equipment is installed and commissioned at the Aldersyde facility. It is the purchasers intent to have Cielo remove the sulphur from the renewable diesel and then allow Cielo to sell it as a ultralow sulphur diesel and the purchaser will receive the upside of the higher margin when sold.
Don Allan, president and chief executive officer of Cielo, stated: "After several years of advancing our waste to high-grade renewable fuel technology, we feel receiving our first more substantial commercial order, as a prepayment, is a significant milestone. We are holding our heads up high today and are delighted to say that we are one step closer to achieving positive cash flow."
Engineering meeting and joint venture update and further scale up of the Dunmore facility
On Nov. 17, 2020, Cielo and Renewable U Medicine Hat Inc. held the previously announced engineering kick-off meeting. This meeting was held on site at the proposed facility just outside of Medicine Hat, Alta., in Dunmore, including the companies that have been awarded contracts to begin work on the Dunmore facility, located between CP Rail's main line and the Trans Canada Highway, just east of Highway 41. In attendance was Cielo's management, representatives from Renewable U Medicine Hat, Cielo's lead engineer company, civil and railway engineers and Cielo's primary rail contractor. It was decided to further scale up the Dunmore facility from 10,000 litres per hour to 12,000 litres per hour or 100 million litres per year. This will allow Cielo to maintain a 4,000-litre-per-hour module for the Dunmore facility (as well as the other facilitates intended to be built pursuant to Cielo's previously announced joint ventures) such that one, two or three modules can be constructed to build a single facility. This provides an advantage by allowing the size of the facility in each respective territory to be tailored.
Ryan Jackson, chief operating officer of Renewable U Medicine Hat, stated: "It was an exciting day having our first engineering meeting for our Dunmore facility. I was pleased to see so many professionals on site with many of them local residents. In a time where we need it most, this Dunmore facility will bring jobs and economic prosperity to our region and tackling our garbage and waste issues all while creating needed clean, renewable fuels. I am beyond excited and cannot wait for the next steps."
Mr. Allan stated: "We believe we have a very strong group of professionals working with us on constructing our game-changing technology and believe the additional increase in production capacity at the Dunmore facility will simplify the buildout and there is plenty of waste feedstock and fuel purchasers to make this viable. Nov. 17, 2020, marks the day we kicked off the design and preconstruction phase of our Dunmore facility and all parties showed their intentions to move forward with the building of follow-on waste to energy facilities. We anticipate this facility will be able to convert 200,000 tonnes of garbage into 100 million litres a year of high-grade renewable fuel."
Cielo and the group of companies controlled by Renewable U Energy Inc., including Renewable U Medicine Hat, are in the review stages of the joint venture agreements that are anticipated to form the joint ventures resulting in the next five facilities to be built. Further updates will be provided as they become available.
Aldersyde facility update
At the Aldersyde facility, Cielo is seeing increased production rates as a result of the design changes and improvements made to increase the distillate flow from the reactor. With the newly fabricated equipment installed late last week, Cielo was able to begin making renewable naphtha and diesel on a continuous-flow basis. The Aldersyde facility is engineered to run 24 hours a day, seven days a week.
The Aldersyde facility is continuing to produce approximately 800 litres per hour of distillate for 18 hours per day and then undergoing a cooling process for the remaining eight hours per day.
The newly purchased equipment designed to further cool down the waste is scheduled to be installed over the next two weeks, which is expected to eliminate this daily interruption of the production of the distillate.
Updates regarding the naphtha and diesel volumes will be provided once they become available following the implementation of this equipment.
Cielo is working closely with a project team at the University of Calgary (U of C) to complete a design of the customized desulphurization process. Cielo has been advised that the U of C team members are confident in the design modifications and Cielo's engineers are working on finalizing the engineering of the desulphurization vessels with fabrication to begin over the next few weeks.
Government funding
Management has determined that Cielo meets the requirements for newly extended environmental grants from the provincial and federal governments and is currently in the final stages of review of one substantial grant from the Alberta government. Additionally, Cielo has submitted federal grant applications and management expects to receive a response in the near future. Management's intention is to continue to apply for all grants available to the company.
About Cielo Waste Solutions Corp.
Cielo Waste Solutions is a publicly traded company with its shares listed to trade on the Canadian Securities Exchange (CSE) under the symbol CMC, as well as OTC Markets Group, on the OTCQB, under the symbol CWSFF. Cielo is a waste to renewable fuel company with a game-changing technology engineered to help solve the world's garbage crisis. Cielo's technology transforms landfill garbage into renewable high-grade diesel, naphtha and kerosene (aviation jet and marine fuels). Cielo's proven and patented technology is currently being deployed in the company's Aldersyde facility, Alberta, where wood waste is currently being converted into renewable fuels.
Cielo is headquartered in Alberta, Canada, with plans to build and operate green facilities across North America as well as globally.
Cielo has already begun expanding its footprint by signing multiple memorandums of understanding pursuant to which third parties are in negotiation with Cielo to build, at no cost to Cielo, joint venture renewable diesel facilities in Grande Prairie, Calgary, Medicine Hat and Lethbridge, Alta., as well as in Nova Scotia. Each JV facility is projected to cost approximately $50-million to build, commission and place on production. Cielo will be the general contractor and operator of all the proposed JV facilities. The feedstock that will be used in the company's green facilities is the world's most available and inexpensive feedstock -- garbage; including household, commercial/construction/demolition garbage, used tires, railway ties and telephone poles as well as all types of plastic that currently cannot be recycled.
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