Carbonxt (ASX:CG1) investors are likely keeping a close eye on their watchlists as management assures the market it will soon reach a ‘transformational’ outcome, when it brings new manufacturing assets in Kentucky online.
Before we get into downstream refining, let’s look at the big picture: Carbonxt is making carbon-based pellets for sale to industrial customers which currently run at an average cost of US$3,725 a tonne.
Attached to the future Kentucky facility are existing contracts for 2,400 tonnes. At 100% capacity, the company expects to see revenues of $100m.
Already somewhat transformational is the company’s latest revenue update of $4.1m, up 50% on Q1 revenues. A further $800,000 remains pending, payable to Carbonxt, from industrial customers buying its industrial carbon pellets.
The cleantech company is currently pivoting towards the manufacture of activated carbon pellets (ACPs) and powdered activated carbon (PAC).
In short, both products are used in industrial processes given their ability to remove certain pollutants and toxins, typically within gas-based industrial refining practices.
The pellets are used as a filtration screen to remove mercury, and can also be used to purify air and waste water. Mercury removal is what Carbonxt has its eyes on—the process is needed for coal-fired power plants.
And right now, the world is burning a lot more coal than it was three years ago.
Carbonxt recently highlighted its decision to launch a capital raise for a production facility in Kentucky, on a JV basis. It will partner with US counterpart KCP on a 50/50 basis, all things in order.
To help speed all this up, Carbonxt is seeking to raise $6.6m via a 1-for-4 non-renounceable issue. It has also executed term sheets to raise $5m from institutional investors in Australia, as well as a boost to an existing loan facility from PURE Asset Management.
Investors ought to note the Kentucky facility is already under construction, and while it’s possible a future snag could emerge, it appears fairly guaranteed the Kentucky plant will go ahead.
An announcement is expected in the coming weeks—keen investors will just need to wait, given the company’s trades are currently halted.
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