Footer text here1
a breakthrough in clean energy…July 22,
2012
Disclaimer
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Certain statements made in this presentation are forward-looking statements that involve risks and uncertainties. These forward-looking statements reflect the Company’s best judgment based on current information, and although we base these statements on circumstances that we believed to be reasonable when made, there can be no assurance that future events will not affect the accuracy of such forward-looking information. As such, the forward-looking statements are not guarantees of future performance, and actual results may vary materially from the results and expectations discussed herein. Any number of factors could cause Elementa’s actual results to differ materially from those anticipated in forward-looking statements including, without limitation: global and North American political decisions related to alternative energy; technological developments; competitive actions; foreign exchange rates and particularly the value of the Canadian dollar; plant operating performance; capital investments, project execution problems and the related effect on performance; substitute technologies; natural gas prices and usage; electricity prices in various jurisdictions; raw materials availability and prices; changes in environmental, tax and other laws; North American and global economic performance and political developments; and fluctuations in interest and lending rates.
Corporate OverviewOctober, 2013
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Future ElementaCommercial Demonstration PlantIn Sault Ste. Marie ON - SSM CDP. Converting 50,000 tonnes of MSW
into 9.5 MW ofClean Power.
Elementa – the right time
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Landfills are no longer acceptable and harm our environment. Elementa – no landfill, combustion free technology.
Clean Energy - we need enormous amounts of it in all forms. Elementa has the technology to efficiently create every energy product required globally. Climate Change - Technology needs to act fast – solve the biggest global challenge ever. Elementa technology is designed to substantially reduce GHG’s.
• No pollution• Reduce
GHG’s
Eliminate
Landfill
• Efficient Energy• Extensive
Energy ProductsClean Energy
• Reduce methane from landfills
• Provide low-carbon energy
Climate Change
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Elementa at a glanceElementa Group Inc. Public non reporting Ontario corporation
Approximately 150 shareholders Incorporated in 2003 Head Office Niagara-on-the-Lake, Ontario
Commercialization Journey
Focus of company has been on perfecting the technology not promoting
Sault Ste Marie Ontario Pilot Plant Waste Agreement signed with City of Sault Ste Marie Power Purchase Agreement with Ontario government Final stages of Certificate of Approval from Ministry of Environment
International Application
Elementa’s platform technology will play a key role in providing economically viable clean energy sources for global economies
Advanced economy countries Emerging economies 3rd world countries
Elementa at a glance.
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Commercial Value Proposition
Eliminate Landfill.
Elementa’s technology is a solution for three of the world’s most pressing environmental problems:
Waste management Generating cost competitive sustainable clean energy Climate change
NO Incineration Elementa’s process is based on a proven chemistry - Steam Reformation:
New technology applied to old well-known chemistry Modular and scalable Robust off the shelf systems & equipment Surpasses stringent emission standards
Proven & Patented.
Elementa has: A proprietary & patented process Demonstrated experience and validated success Global clients and world class partner relationships, with a rapidly growing list of potential projects based on Elementa’s results to date
Competes with conventional power generation.
On a life cycle basis Elementa’s technology cost is 3.3 cents/KW with no gov’t funds – comparable to conventional power generation
Elementa Value Proposition
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Capital raiseRecent media articles on Elementa:
http://www.battelle.org/media/press-releases/battelle-wins-two-energy-awards http://www.waste-management-world.com/articles/2013/11/steam-reformation-waste-to-energy-technology-wins-u-s-defense-award.html
http://www.saultstar.com/2013/11/05/kudos-for-elementa
http://www.enertechcapital.com/management.asp
http://www.internationalresourcejournal.com/resource_in_action/dec_13/elementa_group.html
Elementa in the News
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Capital raiseSources of capital• Sale of common shares $15.0m• Notes payable note 1 $1.7m• Convertible debentures note 2 $.7m
Total $17.4mAccrued interest on debt $.3m
$17.7m
Common shares issued and outstanding 47m
Common share warrants and options outstanding 5.4m
Other share classes issued none
Note 1 – $1.1m is with the SSM CDP equity investor, $.6m is with private equity firm that has a technology that could be a potential JV partner with Elementa
Note 2 – 3 debentures of which 50% of total is held by members of Elementa’s B of D
A look at Elementa Group Inc. - Existing Capitalization
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Capital raise
Current capital raise of $10M of which $3m are Flow Through Shares
Planned use of funds• Cash reserve for corporate burn $2.2M• SSM CDP related payables $.7M• Corporate payables $1.1M• Pay down corporate debt $2.0M• Investment in SSM CDP $4.0M
Close Q1 2014
Next capital raise Q1 2015 of $15M, target share price $5.00 3m shares issued for a dilution of 5%
Corporate Capital Raise Approach
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Raise capital as needed, under favourable conditions to minimize dilution and increase share value
2013 2014 2015 2016 $-
$3.00
$6.00
$9.00
$12.00
$15.00
$18.00
Elementa - increasing shareholder value
Sign PPA
SSM CDP
Constructio
n
SSM CDP stea
dy
state2n
d plant
constr
uction
Q1 ‘14 $10m raise, price TBD, estimated dilution of 11%
Q4 ‘14 $15m raise target @$5.00/share, dilution of 5%
Q1 ‘16 $30m raise target @ $10.00/share, dilution of 5%
2017 $425m raise @$17.00 /share, Q4 ‘13
Corporate Share Value Increase: to 2017 major equity market capital raise based on major milestones
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Phase 1First 8 plants
Phase 2Next 7 plants
Phase 3Full business
model implementatio
n
Business Model Rollout Plan
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• Elementa has minority ownership position• under contract Elementa provides certain services during construction and ongoing operational management once commissioned• Elementa earns performance bonuses and dividends• Elementa less involvement at plant level compared Phase 1 • Elementa creates JV entities in 3-4 selected markets with market partners for development of plants within market territory owned by the JV entity• market partners have engineering, gov’t relations, BD, and financial capabilities • Elementa earns license and engineering fees from plants, a per plant market fee from JV entity partner and royalty and/or share of plant profits via the JV entity • Elementa little involvement at plant level • Elementa creates other JV entities in remaining markets with market partners for development of plants within market territory owned by the JV entity• market partners have engineering, gov’t relations, BD, and financial capabilities • Elementa earns license and engineering fees from plants, an up front market fee from JV entity partner and royalty and/or share of plant profits via the JV entity
ViaBusiness model is market JV partnerships where Elementa will
earn technology licensing from the plants and share of profits along with JV partner.
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2014 2015 2016 2017 2018 2019 2020 20210123456789
10
50 k tonne100 k tonne300 k tonneTotal
# of
Fac
ilitie
s
Phase 1 - 8 plants
Total Capital $630M
Phase 2 – 7 plants
Total Capital $950M
Phase 3 – future plantsTotal Capital
$2,130M
Elementa Plant Rollout Plan - MSW to power
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July 22, 2012
2013 2014 2015 2016 2017 2018 2019 2020 Revenue (note 1) Engineering fees 0 2.0 6.0 16.0 0 0 0 0 License, EP fees 0 0 0 0 48.8 74.0 116.0 171.0 Technology development fees 4.0 9.5 17.5 17.0 18.0 20.0 25.0 Total Revenues 0 6.0 15.5 33.5 65.8 92.0 136.0 196.0 Operating Expenses Engineering 1.4 1.8 3.3 4.9 6.9 8.7 10.5 12.3 Bus.Dev. .2 1.0 1.9 3.0 4.8 6.1 7.1 8.3 G&A 1.2 3.0 4.6 6.3 8.4 10.4 12.1 14.0 R&D plants 0 .2 1.3 1.9 2.4 3.0 3.0 3.0 Total Expenses 2.8 6.0 11.1 16.1 22.5 28.2 32.7 37.6 EBITDA (2.8) 0 4.4 17.4 43.3 63.8 103.3 158.4 Depreciation 0 .5 2.0 2.6 2.6 3.7 4.5 5.1 Profit before tax (2.8) (.5) 2.4 14.8 40.7 60.1 98.8 153.3 Taxes 0 0 0 0
2.5 16.0 26.2 40.6 Net profit (2.8) (.5) 2.4 14.8 38.2 44.1 72.6 112.7
Stabilization period per share value using average $20.51 $33.70 $52.31of 5 publically traded waste management companies Oct 2013 earnings per share multiple
Note 1 – Elementa will not earn revenue from royalty and/or dividends from plant operating results because these revenues fall outside the projection period, i.e. they start in 2021.
Elementa Group Inc. projected Income StatementIn millions of $’s except for per share value
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ShareValue
Increase
2018 2020 2022 2024 2026 2028 2030
$100.00
$75.00
$50.00
$40.00
$30.00
$25.00
$20.00
$17.00
Increase from fossil fuels to all outputs
Increase from Waste to Synthetic Green Fuels &
Chemicals
Increase from Waste to Hydrogen
Increase from MSW to Power
N EW MARKETS
2003
2008
2013
2017
$-
$5.00
$10.00
$15.00
$20.00
Market
capital
raise
Today
Value increases with Technology Platform
& commercialization of new products.
Projected Increase in Share Value: to 2017 major equity market capital raise and Beyond
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See Platform Technology Slide 15
IPO Highest Apr 1 13 Oct 3 13
0
5
10
15
20
25
30
35
40Amyris
Gevo
KiOR
So-lazyme
Average
Industrial synthetic biology platform to convert plant sugars into flexible building blocks that can be used in a wide range of products.Using a combination of synthetic biology and
chemistry producesisobutanol, a platform chemical for the liquid fuels andpetrochemical marketProprietary technology platform to convert biomassinto renewable crude oil .
Feedstock flexible platform using standard industrial
fermentation equipment to efficiently scale and accelerate
microalgae's natural oil production time to just a few days.
All 4 bio-energy company have a technology to convert a singe feedstock grouping - biomass to produce one output group - petroleum based products, fuels and chemicals
Share price
Elementa converts at least 4 feedstock grouping into 5 output grouping for a maximum of 20 input/output
combinations. The average market value of one input/output combination at $4.23 per share or enterprise value of $300M, therefore Elementa’s share price
should be $111 (Platform Technology Business).
Bio Energy Companies:Post IPO performance and implications for Elementa
Market value stabilization
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Technology Overview – process schematic
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Elementa’s Patented
TechnologyU.S. Patent
No. 7,794,689 “Method for Steam
Reforming Carbonaceous
Material”
A process technology used to convert waste to clean syngas. No combustion
occurs and H2O is used to create
clean energy from waste.
MSW
Power Hydrogen
Green Fuels &
Chemicals
WasteMSW & Bio-
Solids
Biomass
Fossil Fuels
CLEAN ENERGY MATRIX
COMBUSTION FREE
No Oxygen
Indirect HeatingH2O
Syngas
Cleaned
Syngas
Cleaned
Syngas
CARBONACEOUS MATERIAL
FEEDSTOCK
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Platform Technology: Projected economics of converting MSW to 6 energy products*
0%5%
10%15%20%25%30%35%40%45%50%
Return on Capex
Power
Hydroge
nMeth
ano lSyngas
Diesel
Ethanol
Bio Fuels
Elementa’s Platform Technology:investment grade potential
beyond MSW to Power – a unique
business potential.
Elementa’s Business ModelUse the Technology Platform asa driver for establishing highly
profitable business opportunities. Opportunities are based upon market and
geographical conditions. The chart assumes best global
economic conditions.
*300,000 tonne of MSW per year plants at selected markets
Projected Elementa Share Value Increase using established metrics 2014 2015 2016 2017
Average value using 5 metrics;1. 9.9% cap rate of cash flow $.01 $.20 $.56 $1.302. Multiple of Net Income per share (note 1) $.00 $.38 $1.71 $4.433. Discounted NPV of future cash flow – 8% $3.59 $3.78 $3.02 $3.274. NBV plus 8 multiple of Net Income (note 1) $.05 $.37 $2.07 $3.34Per share value $3.65 $4.73 $7.36 $12.34Elementa enterprise value $204m $278m $595m $997m
Enterprise value increase from additionalFeedstock output combinations ( 67% of current market valuation)5. Biomass to electricity $200m $200m $200m6. MSW to hydrogen $200m $200m7. MSW to diesel $200m
$200m $400m $600mTotal enterprise value $204m $478m $995m $1597m
Number of shares outstanding 55.8m 58.7m 80.9m 80.9mPer share value $3.66 $8.14 $12.30 $19.74
Projected capital raise share value $5.00 $10.00 $17.00
Inputted option value of future earnings $1.34 $1.86 $4.70
Note 1 – Oct 10 2013 listing information of the average of 6 publically traded waste management companies stock symbols as follows WM, RSG, CLH, WCN, SRCL, DAR
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Elementa’s First Plant - Sault Ste Marie Commercial Demonstration Plant (SSM CDP)
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• 20 year waste agreement with city signed• site selected and offer to purchase in place• Certificate of Approval in final stages •20 year PPA with government of Ontario• Investor secured• indicative debt term sheet from Cat Finance• SDTC (Federal) grant application for $9m at board approval stage• CCEMC (Alberta) grant application submitted for $10m• IDF (Ontario) grant application to be submitted in October 12 for $5.5m
Key Metrics• Capital cost $54m• Tonnes of waste processed 50,000• MW produced 9.5• Average annual revenue $13.5m• Average annual EBITA $4m
Land and building $2,990,000Engineering $8,409,000Waste handling equipment $2,637,000Elementa process and gas cleaning equipment $9,859,000Power generation equipment $15,012,000Misc equipment $4,342,000Contingency (10%) $4,325,000EPCM (15%) $6,487,000Total $54,061,000
Governments grants and statusSDTC - past stage 2 at approval stage $8,929,000IDF – preparation for submission in Oct $5,500,000CRIBE – previously approved for $900k $1,850,000IRAP – approved previous submissions $1,250,000NOHFC – 50% approved $1,000,000
Total $18,529,000Government loans – NOHFC $1,000,000Total government funds $19,529,000Net Capital Cost to be financed $34,532,000
Projected SSM CDP Capital Costs & Gov’t Funding
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Net capital cost to be financed $34,532,000
Capital lease on front end equipment $2,000,000Debt on land, building $2,000,000Toromont owning power island $15,012,000
$19,012,000Remaining capital cost to be financed $15,520,000
Elementa equity $5,000,000
Debt to be provided $10,520,000
Cat Finance $5,270,000EDC $5,270,000
Projected SSM CDP Financing
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20 yr annual averageRevenues
Electrical $7,412,000
Tipping fee $4,952,000
Other $1,114,000Total revenue$13,478,000Operating costs
Labour $3,290,000
Consumables $4,311,000
Maintenance and other $1,623,000Total operating cost $9,224,000EBITDA $4,254,000Cash Flow $2,021,000
Capex$54,061,000Government funding$19,529,000Net Capex$34,532,000Equity $5,000,000Debt and capital lease$14,520,000
Key performance indicators
EBITDA Return net capex12%
Equity cash flow before principal IRR 10%
Debt interest & term 8%, 10 years
DSCR in lowest yr 1.3 in 2024
Debt % of non leased capex 30%
Avg electricity production 9.5mw
Waste processed/yr 56,160 MT
Projected SSM CDP Financials
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20 yr annual average
(000’s $)Revenues
Electrical $55,786
Tipping fee $30,263Other $ 3,317
Total revenue $89,366Operating costs
Labour $9,870Consumables $32,233Maintenance and other $16,430
Total operating cost $48,533EBITDA $40,833Cash Flow $22,379
Capex $198,045Equity $49,511Debt and capital lease $148,534
Key performance indicators
EBITDA Return net capex18.9%
Investor cash flow IRR36.2%
Debt interest & term 7%, 15 years
DSCR in lowest yr 2.5 in 2029
Debt % of non leased capex 75%
Avg electricity production 64.5mw
Waste processed/yr 300,000 MT
Projected Elementa Plant Financials at full scale
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The Waste Challenge
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Key Market Challenges• Waste generation levels are growing rapidly (over 2 billion tonnes per year and
rising)• Landfilling is no longer acceptable• Communities are demanding clean technology• Climate change issues are driving market conditions • Energy security is a global concern• Global requirements for clean energy is rapidly growing• Meeting strict environmental permitting conditions
Via Eliminate Landfilling – Provide
Clean Energy
Elementa Solutions• Advanced Conversion Technology – no landfill• Economically viable in today’s market• Open community approach and outreach – a cleantech solution• Reduces Greenhouse Gases and Exceeds stringent environmental
regulations• Alternative Energy Options – using waste, scalable design and
adaptable outputs• Validated thermal-chemical process – pilot plant tested• Based on proven Germany processing systems with the Elementa
technology
1979 1988 20060
5000100001500020000
Land fills in operation in USA
Land fills in opera-tion
Technology Breakthrough
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Your “bag of garbage” contains the elements to unleash a cleaner more sustainable world.
Steam Technology Basics - known as the chemistry of “Steam Reformation”:• Indirectly heat “Waste” to 900oC • No oxygen (therefore combustion free – no burning of
waste)• Add water (already in the waste – moisture of garbage – unique
value), and • Unleash an incredible, clean energy source called–“syngas”
A Patented Steam Technology: Combustion-Free - Unconventional Chemistry
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Elemen
ta
Incine
ration
Pyroly
sis
Gasifica
tion
Plasm
a Arc
0100200300400
Homes Powered /M$ of Capex
Electrical Efficiency Comparison: Elementa out performs other technologies & achieves “Grid
Parity”The first plank of 6 energy products
$- $0.020 $0.040
Levelized Cost of Energy LCOE
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WTE Competitors Mature Power Producers
Strong competitor advantages driving unique economic solutions in cleantech.
Elemen
ta La
ndfill
Incine
ration
Gasific
ation
Pyrol
ysis
Plasm
a arc
Energy conversion efficiency
Waste volume reduction
Dioxin and furan emissions
Capital cost $M/net MW
Scalability and modularity
Syngas heating value BTU/cubic ft
Carbon in waste converted to syngas
60%
98%
n/d
2-4
large
350
95%
n/a
nil
n/a
nil
none
nil
nil
17%
85%
large
9-14
some
n/a
n/a
30%
93%
some
6-8
some
180
65%
30%
65%
n/d
5-7
some
300
40%
25%
98%
some
10-13
some
180
65%
Partial oxidation
n/a – not applicable n/d – not detectable
Elementa’s Technology Comparison – other WTE technologiesElementa is clearly superior – why? Elementa is
more efficient
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Elementa Technology Partners
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EPC contractor for the front-end pre-treatment incorporating Vecoplan equipment.
Supplier of front end processing equipment, including shredders, conveying and sorting..
Supplier of gas turbines. First MSW gasification technology to operate with Caterpillar /Solar Turbines
EPC contractor for the Power Island incorporating gas turbine, HRSG and steam turbine.
Engineering design company performing the detailed engineering on the gasification island and syngas cleaning system
Supplier for the rotary kiln equipment.
Collaborating on an approach for the separation and use of hydrogen in bio-fuel production using the Elementa technology with Battelle fast pyrolysis liquids
Establishing a research steam reforming platform to develop and prove new applications for the Elementa technology…... Over $400,000 in NSERC grants on a global scale.
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The reasons to invest in Elementa
• Significant share value increase potential
• Well defined exit strategy (major equity market capital raise in 2017)
• Exiting through the “valley of death” – a VC term for achieving commercial project stage
• Completed development years – commercialization stage
• World class partnerships – Caterpillar, Battelle, Toromont, U of T
• Patented technology
• Strong Platform technology to support high growth in multiple markets
• Strong Core Management team
Reasons to Invest in Elementa
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Summary & Next Steps
A proprietary, patented and proven technology ready for international growth:
•Raise $10m ($3 million in FTS) growth capital and begin journey to a major equity market capital raise
• Finalize the PPA agreement with the OPA (government announcement due in October 2013), Complete C of A work with MOE early 2014 and planned break-ground in early 2014;
• Work with project partners to complete debt financing for SSM CDP with Caterpillar Finance
• Select SSM CDP construction partner
• Grow and secure project pipeline once SSM CDP ground breaking is underway, includes high growth market partners;
• Finalize strategic partnerships for hydrogen and green fuels, working with global leaders such as Battelle; and others
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Elementa - Confidential
Contact Us
Jayson ZwierschkePresident & [email protected]: 905-325-1901
Garry RawsonCFO & VP Corporate
[email protected]: 905-988-3260
Office Phone: 905-687-1900
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