Zilkha Black® PelletsThe Clean, Renewable Alternative to Coal

Renewable Power from Coal PlantsBiomass Pellets Trade Asia

Seoul, Korea

September 23-24

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Zilkha Black® Pellets Fuel Renewable Baseload Power

An advanced wood pellet is:

• Grindable

• Low-dust

• Water-resistant

• Can be burned in existing

steam turbine power plants

• Co-fired up to 100%

• Minimal capital expenditure

Certified sustainably harvested

Carbon neutral compared to

traditional fossil fuels

Thermally treated pellet

NOT a torrefied pellet

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Zilkha Accomplishments

Construction nearly complete on 275,000 metric

tonne/yr Black pellet plant in Selma, Alabama (U.S.)

Selma plant output sold under long term contract to

European utility

First license agreement executed with third party

covering multiple sites in Northeast U.S.

Zilkha announced a second, larger plant located in

Monticello, Arkansas (U.S.)

Additional offtake being negotiated to be supplied by

Zilkha and additional licensee plants

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Zilkha Black® Pellet Advantages for Korea and SE Asia

Reduced shipping cost means delivered energy cost in line with

white pellets, but with better performance than white pellets

Greatly improved safety and reduced storage costs compared to

white pellets or chips

Korean companies can benefit from Black pellets:

o Genco’s who begin with co-firing can move up to a 100% conversion in

the REC market

o Trading houses who source fuel for those Genco’s can also supply fuel

to commercial and industrial customers

o Engineering companies and boiler/burner manufacturers can provided

guidance and services to Genco’s and commercial/industrial market

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Zilkha Business Model: Emission Driven Market

Europe and Asia are focused on SOx, NOx, and CO2 reduction

and have mandates and incentives in place today

North America is focused on SOx, NOx, and Hg with tighter

emissions standards that require significant capital investment

Our current customers are European utilities who have experience

burning biomass in pulverized coal-fired units

We serve this market with a better product—Zilkha Black® pellets

o Patented Zilkha technology

o NOT torrefaction

o Durable, water resistant pellet with reduced dust and better safety

o Drop-in replacement for coal with minimal capital investment

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Zilkha Black® Pellet Advantages

1) COST: Zilkha Black® pellets contain

and retain more energy than white

2) SAFETY: Zilkha Black® pellets are

safer than white

3) DROP-IN: Zilkha Black® pellets grind

and burn more like coal than white

Significant capex

and opex avoided

by customer

Key Criteria Zilkha Black® Pellets Conventional White Pellets

HANDLING Water-resistant Disintegrate upon water contact

LOGISTICS 19.5 GJ per bdmt

750 kg/m3

17.0 GJ per bdmt

640 kg/m3

DUST 98% durability index

99% is >74 microns (low-risk)

96.5% durability index

Dust particles prone to explosion

SAFETY No self-heating

Minimal off-gassing

Self-heating common

Off-gassing significant

GRINDING 25-35 grindability index

15 hp-hr/mt mill energy demand

15-20 grindability index

26 hp-hr/mt mill energy demand

COMBUSTION Higher ignition potential at

16.28 [kJ/kg fuel/°C]

Lower ignition potential at

12-14 [kJ/kg fuel/°C]

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Parameter Zilkha Black®

Pellets(1)

Russian Coal #1,

G Grade(2)

Central Appalachian

(Long Fork)(3)

Powder River Basin

Coal-Eagle Butte(4)

Moisture % 1.44 7.37 7.16 23.92

Ash, Dry % 0.72 14.1 11.52 4.65

Volatile, Dry % 78.53 35.92 31.23 33.95

Sulfur, S, Dry % 0.03 0.229 1.07 0.29

Calorific Value, BTU/lb 8,447 11,218 12,114 8,966

Calorific Value, kJ/kg 19,647 26,093 28,117 20,854

Carbon, C, Dry % 54.42 69.38 66.93 53.46

Hydrogen, H, Dry % 6.03 4.69 4.43 2.71

Nitrogen, N, Dry % 0.15 2.25 1.34 0.58

Mercury, ug/g 0.01 0.52(5) 0.15(7) 0.08(7)

Source:

1) Analysis Report 0089_C1_SWPELLET_10-3-11. SGS North America Minerals Services Division. South Holland, IL. October 18, 2011.

2) LQSi Data Statistical Results By Program. SGS Minerals Services Division. 2010.

3) Tillman, David A., Duong, Dao N. B. Fuel Selection for Cofiring Biomass in Pulverized Coal and Cyclone Fired Boilers. Foster Wheeler North American Corp. Clinton, NJ. 2009.

4) Testing of Biomass/Coal Blends in WRI’s Combustion Test Facility. Western Research Institute. May 9, 2011.

5) Yudovich, Ya E., and M. P. Ketris. "Mercury in Coal: a Review." International Journal of Coal Geology 107-134 62 (2005): 117.

6) Leaner, J., James Dabrowski, R. Mason, P. Ashton, K. Murray, T. Resane, M. Richardson, M. Ginster, R. Euripides, E. Masekoameng, and G. Gericke. Mercury Emissions from

Point Sources in South Africa. Council for Scientific and Industrial Research, 2008. PPT.

7) United States. Department of the Interior. U.S. Geological Survey. Mercury in Coal--Abundance, Distribution, and Modes of Occurance. By Susan J. Tewalt, Linda J. Bragg, and

Robert B. Finkelman. 2001. USGS Fact Sheet FS-095-01.

Zilkha Black® Pellets Perform Like Common Coals

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HANDLING: Black pellets are water-resistant

Zilkha Black®

Pellets compared

to conventional

white pellets after

soaking in water

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LOGISTICS: Black pellets will always be cheaper to ship

~30% savings with

Zilkha Black® pellets

vs. white pellets and

~80% vs. chips

1) Each tonne of Black

pellets holds 15% more

energy than white, 140%

more than chips

2) Each ship will hold 15%

more tonnes of Black

pellets than white, and

115% more than chips

TWO DISTINCT ADVANTAGES: ZILKHA BLACK® STD WHITE CHIPS

Net Calorific Value (CV) 19.5 GJ/mt 17.0 GJ/mt 8.0 GJ/mt

Pellet Bulk Density 750 kg/m3 640 kg/m3 350 kg/m3

Cubic space onboard 58,500 m3 58,500 m3 58,500 m3

Tonnes onboard 43,875 mt 37,440 mt 20,475 mt

CV onboard 851,175 GJ 636,480 GJ 163,800 GJ

Relative freight 1.00 1.34 5.20

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LOGISTICS: Loads Like Coal and No Problem with Rain

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Fines = dust = very real explosion risk

Explosion mitigation takes capital beyond that required to handle coal

Venting during transportation

Off-gassing of CO, CO2, and CH4

Pellet pile self-heating

SAFETY: White pellets require extra safety measures

Source: Staffan Melin.

Safety in Handling Wood

Pellets. 2008.

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SAFETY: Black pellets limit dangerous gas emissions

Less methane:

WHITE

BLACK

Less carbon monoxide:

WHITE

BLACK

More oxygen:

BLACK

WHITE

Zilkha Black® pellets tested as far

less reactive than white

Zilkha Black® pellets showed

reduced oxygen depletion

Oxygen depletion is a significant

operational issue. Extra workers

and other special safety restrictions

are required for workers entering

white pellet storage areas

These results @ 25 C. but

similar results @ 45 C.

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Zilkha Technology at a Glance

Manufacturing of Zilkha Black® Pellets is

similar to the production of standard

white pellets, with the addition of our

patented thermal treatment step.

IntakeSawdust, wood chips,

pulpwood, and other

fibrous waste

DryingReduce moisture content

from ambient (~50%)

to 10-12%

Proprietary

Patented Zilkha

Thermal Treatment

Milling & PelletizingFeedstock is resized then

passed through dies to

create Zilkha Black® pellets

* - Source: Poyry Wood Pellet Multiclient, 2012

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First Commercial Zilkha Plant: Selma, AL (275,000 mtpy)

Zilkha Black

Pellet

Technology

Wood Yard

Pelleting

First full-scale Black pellet plant

275,000 metric tpy

Construction complete October

2014

Commissioning 4Q 2014

First Black pellets ship Q2 2015

to Europe, long term contract

Export from Port of Mobile

Plant staffing: 55 jobs

Project financing

Dryers

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Successful Full-Scale Testing by Utility Customers

Over ten (10) full-scale tests completed in European coal units and

additional tests planned

Black pellets recently delivered for a power boiler test in Oct-Nov 2014

in Japan

Unit co-firing levels from 20-70% in large units to 100% in smaller units

Units ranged in size from 80-500 MW

Black pellets stored outdoors in Sweden since Mar-2012

2,700 tonne test burn in the Netherlands, Mar-2012

Success grinding in existing coal

pulverizers (ball and roller) as well as

hammer mills

Coal mills have successfully run on

100% Black pellets

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Many Paths for Korean Companies to Supply Market

North &

South

America

Southeast

Asia

Korean

Trading

Houses

CustomerCustomer

CustomerGenco

and IPP

Customers

Korean

Engineering

and Boiler

Companies

Black Pellet Plants