Vancouver, British Columbia--(Newsfile Corp. - June 20, 2022) - ReGen III Corp. (TSXV: GIII) (OTCQB: ISRJF) (FSE: PN4) ("ReGen III" or the "Company") is pleased to report the following progress with the Company's first facility:
- FEL-2 (pre-FEED) is complete. A subsequent Value Engineering ("VE") review process, led by Koch Project Solutions ("KPS"), resulted in an updated capital cost of US$293 million for the Texas recycling facility. Final capital costs will be defined during FEL-3 (FEED). Inflationary escalation and scope changes were the drivers of this update.
- Based on current data and bp contractual base oil prices, the Company is now forecasting first full year EBITDA[1] of approximately US$230 million for the proposed Texas recycling facility.
- The final Lifecycle Assessment study ("LCA") conducted by GHD Services Inc. ("GHD") estimated that CO2e emissions from the Company's ReGen™ process are 82% lower than comparable, traditionally refined base oils combusted at end of life.
- Draft Phase 1 Red Flag Due Diligence Report conducted by EDC's Independent Engineer has been successfully submitted, with no red flag concerns identified.
- The Company was recently awarded three new process patents, bringing its total to 14.
- Now that FEL-2 is complete, the Company has established a non-exclusive financial and exclusive advisory services relationship with one of Canada's leading banking and financial services institutions.
- The Company continues to negotiate with the PE Firm and provide bp with regular project updates.
ReGen III has established a non-exclusive financial and exclusive advisory services relationship with one of Canada's leading banking and financial services institutions (the "Canadian Financial Institution"). The relationship has been established to assess appropriate levels of project and public company funding to advance the Company's proposed Texas recycling facility. The Canadian Financial Institution will also advise on ReGen III's strategic objective of acquiring additional UMO recycling projects. This relationship will augment the previously announced financing work underway with Export Development Canada ("EDC") and the U.S. based multi-billion-dollar green energy infrastructure-focused private equity firm ("PE Firm").
Greg Clarkes, Chairman and CEO of ReGen III stated, "The past few months have been nothing short of intense as our team continued to mobilize and provide numerous deliverables to our financiers against a background of inflationary pressure and shifting global financial markets. Fortunately, the economics of our Texas recycling facility are robust and this, coupled with the strength and skills of our project partners, has enabled us to continue making steady progress. With the recently added bench strength of a multi-disciplinary team from a major Canadian Financial Institution, we see an increased capacity for securing project funding that will advance not only our Texas recycling facility, but other expansion opportunities. Our business is a marathon and not a sprint. I am pleased to say we are continuing to deliver the fundamentals that position us to succeed globally."
Financing Update
With the objective of securing final term sheets for the Texas recycling facility, ReGen III continues to deliver due diligence materials to EDC, the PEFirm, several other potential debt providers, and the Canadian Financial Institution.
Further to the Company's update on April 8, 2022, the draft Phase 1 Red Flag Due Diligence Report by EDC's Independent Engineer has been submitted to EDC with no red flag concerns identified. ReGen III also continues to advance the contractual engagement process for the independent market advisor selected by EDC.
Four draft definitive agreements have been received from the PE Firm and the Company continues to negotiate final investment terms. Further details, including the name of the PE Firm, will be made available upon signing of definitive agreements.
Engineering Update
FEL-2 engineering packages for the Texas project are complete and the Company is currently negotiating FEL-3 completion fees and timelines with KPS. KPS has also advised that initial geotechnical field work for the Texas recycling facility is complete with an initial geotechnical report expected in June. KPS's work to prepare a preliminary air emissions permit is also ongoing.
Between April and June, an intensive nine (9) week VE review process was undertaken by KPS to address inflation driven cost escalation and project scope changes resulting from site-specific conditions. The VE process resulted in approved savings of approximately US$68 million to reach a capital cost proposal of US$293 million. Based on updated cost estimates, other factors and bp current contractual base oil prices, the Company is currently forecasting first full year EBITDA[2] of approximately US$230 million for the proposed Texas recycling project.
In addition, ReGen III continues to advance contractual arrangements with Advario Galveston County, LLC, an affiliate of Advario North America, LLC ("Advario", formerly known as Oiltanking North America, LLC). A draft throughput service agreement has been received for the Advario Galveston County Terminal site ("AGAL"), in addition to the previously announced draft site lease. Both agreements are currently under review.
Life Cycle Assessment Study
ReGen III is pleased to report the Lifecycle Assessment study ("LCA") conducted by GHD Services Inc. ("GHD") is complete. GHD is part of GHD Group Pty Ltd., a global technical professional services firm providing advisory, architecture and design, buildings, digital, energy and resources, environmental, geosciences, project management, transportation and water services. Founded in 1928, GHD Group Pty Ltd. employs approximately 10,000 professionals with operations in 200 offices and 14 countries. https://www.ghd.com/en-ca/index.aspx.
In its report, GHD used greenhouse gas ("GHG") lifecycle analysis to compare the global warming impact of ReGen III's process to the production and end of life scenarios of base oils. Based on GHD's Scope 1-3 emissions analysis, GHD concluded that the lifecycle CO2e emissions from the Company's ReGen™ process are expected to be 82% lower than traditionally refined base oils combusted at end of life. Furthermore, GHD stated that using the ReGen™ process may reduce up to 903,000 mt CO2e / year from entering the atmosphere by preventing combustion at end-of-life and by producing base oils more efficiently than the equivalent production from virgin crude oil. This would be the equivalent of removing 195,000 passenger vehicles from the road for a year.[3] Based on these findings, the Company continues to explore opportunities to monetize GHG credits from its Texas facility.
Figure 1: GHD LCA results
To view an enhanced version of Figure 1, please visit:
https://orders.newsfilecorp.com/files/7692/128296_905acc41840b1b13_004full.jpg
Patents Update
The Company was recently awarded three new patents in Malaysia and Mexico and now holds fourteen (14) ReGen™ patents globally. The Company also has eighteen (18) ReGen™ patent applications pending worldwide. These ReGen™ patents provide protection over the ReGen™ process.
About ReGen III
ReGen III is a cleantech recycling company creating more sustainable solutions that include better environmental outcomes and compelling economics.
Last year, ReGen III engaged Koch Project Solutions, LLC ("KPS") to provide project execution management services leading up to the turnkey delivery of its new facility in Texas whereby, KPS will lead ReGen III's world class engineering, construction and licensed vendor teams (PCL Industrial Management Ltd., Koch Modular Process Systems and Duke Technologies) through the completion of detailed design, construction, commissioning, and start-up. ReGen III has already signed a definitive offtake agreement with bp to purchase 100% of the Company's base oils produced at the proposed Texas recycling facility.
For more information on ReGen III or to subscribe to the Company's mailing list, please visit: www.regeniii.com/investors/corporate-presentations and www.regeniii.com/newsletter-subscription.
For further information, please contact:
Kimberly Hedlin
Vice President, Corporate Finance
Tel.: (403) 921-9012
Email: Info@ReGenIII.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain information other than statements of historical facts contained in this news release constitutes "forward-looking information" or "forward-looking statements" (collectively, "forward-looking information"). Without limiting the foregoing, such forward-looking information includes statements regarding the Company's business plans, expectations, capital costs and objectives. In this news release, words such as "may", "would", "could", "will", "likely", "believe", "expect", "anticipate", "intend", "plan", "estimate" and similar words and the negative form thereof are used to identify forward-looking information. Forward looking information should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. Forward-looking information is based on information available at the time and/or the Company management's good faith belief with respect to future events and is subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the Company's control. For additional information with respect to these and other factors and assumptions underlying the forward-looking information made in this news release, see the Company's most recent Management's Discussion and Analysis and financial statements and other documents filed by the Company with the Canadian securities commissions and the discussion of risk factors set out therein. Such documents are available at www.sedar.com under the Company's profile and on the Company's website, https://www.ReGen III.com/. The forward-looking information set forth herein reflects the Company's expectations as at the date of this news release and is subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.
EBITDA is a non-GAAP financial measure that the Company defines as net income or loss (GAAP) plus depreciation and amortization, interest expense and income taxes. EBITDA provides no information regarding a company's capital structure, borrowings, interest costs, capital expenditures, working capital movement or tax position. EBITDA does not represent funds available for future discretionary use because it excludes funds required for debt service, capital expenditures, working capital, income taxes, franchise taxes and other commitments and obligations. However, management believes EBITDA is useful to an investor because this measure is widely used to measure a company's operating performance without regard to items that can vary substantially from company to company depending upon accounting methods, the book value of assets and capital structure, among other factors, and helps investors to more meaningfully evaluate and compare the results of the Company's operations from period to period by removing the effect of its capital structure from its operating structure. EBITDA is used by management for various purposes, including as a measure of operating performance, in presentations to the Company's board of directors and as a basis for strategic planning and forecasting. There are significant limitations to the use of EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring and non-recurring items that materially affect the Company's net income or loss.
[1] EBITDA is a non-GAAP financial measure. The Company is unable to provide a reconciliation of the forward-looking EBITDA projections contained in this press release to its most directly comparable GAAP financial measure because the information necessary for such quantitative reconciliation is not available to the Company without unreasonable efforts and such reconciliation would imply a degree of precision that would be confusing or misleading to investors.
[2] EBITDA is a non-GAAP financial measure. The Company is unable to provide a reconciliation of the forward-looking EBITDA projections contained in this press release to its most directly comparable GAAP financial measure because the information necessary for such quantitative reconciliation is not available to the Company without unreasonable efforts and such reconciliation would imply a degree of precision that would be confusing or misleading to investors.
[3] US EPA Greenhouse Gas Equivalencies Calculator
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