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| 8-K - FORM 8-K DATED SEPTEMBER 23, 2011 - EVERGREEN ENERGY INC | f8k_092311i701.htm |
Exhibit 99.1
Investor Presentation
September 2011
www.evgenergy.com
Safe Harbor Statement
2
Statements in this presentation that relate to future plans or projected results of Evergreen
Energy Inc. are "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended by the Private Securities Litigation Reform Act of 1995 (the
"PSLRA"), and Section 21E of the Securities Exchange Act of 1934, as amended by the PSLRA,
and all such statements fall under the "safe harbor" provisions of the PSLRA. Our actual results
may vary materially from those described in any "forward-looking statement" due to, among
other possible reasons, the realization of any one or more of the risk factors described in our
annual or quarterly reports, or in any of our other filings with the Securities and Exchange
Commission. Readers of this release are encouraged to study all of our filings with the
Securities and Exchange Commission. Our ability to execute our business plan and develop the
K-Fuel® or GreenCert™ technologies and the successful development and operation of our
Southern Coal Holdings venture with WPG Resources (“SCH”) may be adversely impacted by
unfavorable decisions in pending litigation, the inability of Green Bridge Holdings to make
future payments under the terms of the sale of the Landrica Development Company assets and
our Ft. Union Plant, the inability to raise sufficient additional capital in a timely manner to
pursue the development of the technology or the development and operation of SCH,
unsuccessful exploratory activities with respect to the identified SCH coal deposits, the inability
to successfully apply the K-Fuel® technology to SCH’s coal deposits, the inability of SCH to
obtain regulatory approval for its activities, adverse conditions for the marketing and sale of
upgraded coal, the ability to successfully develop and commercialize other applications of the K
-Fuel® technology (including the development of an activated carbon product), and the ability
of the Company to successfully maintain and defend its patents, including the application of
such patents to other uses of the K-Fuel® technology. Readers of this presentation are
cautioned not to put undue reliance on forward-looking statements.
Energy Inc. are "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended by the Private Securities Litigation Reform Act of 1995 (the
"PSLRA"), and Section 21E of the Securities Exchange Act of 1934, as amended by the PSLRA,
and all such statements fall under the "safe harbor" provisions of the PSLRA. Our actual results
may vary materially from those described in any "forward-looking statement" due to, among
other possible reasons, the realization of any one or more of the risk factors described in our
annual or quarterly reports, or in any of our other filings with the Securities and Exchange
Commission. Readers of this release are encouraged to study all of our filings with the
Securities and Exchange Commission. Our ability to execute our business plan and develop the
K-Fuel® or GreenCert™ technologies and the successful development and operation of our
Southern Coal Holdings venture with WPG Resources (“SCH”) may be adversely impacted by
unfavorable decisions in pending litigation, the inability of Green Bridge Holdings to make
future payments under the terms of the sale of the Landrica Development Company assets and
our Ft. Union Plant, the inability to raise sufficient additional capital in a timely manner to
pursue the development of the technology or the development and operation of SCH,
unsuccessful exploratory activities with respect to the identified SCH coal deposits, the inability
to successfully apply the K-Fuel® technology to SCH’s coal deposits, the inability of SCH to
obtain regulatory approval for its activities, adverse conditions for the marketing and sale of
upgraded coal, the ability to successfully develop and commercialize other applications of the K
-Fuel® technology (including the development of an activated carbon product), and the ability
of the Company to successfully maintain and defend its patents, including the application of
such patents to other uses of the K-Fuel® technology. Readers of this presentation are
cautioned not to put undue reliance on forward-looking statements.
Introduction
Formed in 1984 and headquartered in Denver, CO, Evergreen Energy Inc.
is a leading innovator in coal upgrading technology.
is a leading innovator in coal upgrading technology.
Evergreen’s proprietary K-Fuel® process is engineered to upgrade the
world’s abundant reserves of lignite and sub-bituminous coals using heat
and pressure, thus transforming the low quality feedstocks into a solid fuel
with higher heating value (Btu/lb or Kcal/kg) while reducing emissions.
world’s abundant reserves of lignite and sub-bituminous coals using heat
and pressure, thus transforming the low quality feedstocks into a solid fuel
with higher heating value (Btu/lb or Kcal/kg) while reducing emissions.
3
Introduction Continued
Evergreen and Australia based WPG Resources recently formed a joint
venture named Southern Coal Holdings (SCH), which is based in Australia
and has access to sufficient coal resources to support one or more 1 million
tons per year (MMTPY) K-Fuel® plants with a maximum K-Fuel®
production cap at 15 MMTPY.
venture named Southern Coal Holdings (SCH), which is based in Australia
and has access to sufficient coal resources to support one or more 1 million
tons per year (MMTPY) K-Fuel® plants with a maximum K-Fuel®
production cap at 15 MMTPY.
Global coal consumption is expected to increase by 1.6% per year on
average for the next 25 years1,Chairman & CEO of Peabody Energy,
Gregory Boyce, recently said: “We’re in a super cycle for coal in the globe
today. We think that’s going to [last] for two, three or four decades.”
average for the next 25 years1,Chairman & CEO of Peabody Energy,
Gregory Boyce, recently said: “We’re in a super cycle for coal in the globe
today. We think that’s going to [last] for two, three or four decades.”
Click Link Below to view CNBC Interview with Gregory Boyce
http://www.executiveinterviews.net/players/mini/default.asp?order=U13895
1 EIA international Energy Outlook 2010
4
International Operations
Engineering,
NA Marketing
(Denver, CO)
Technology
Center
(Gillette, WY)
London Office
Asia Pacific
Marketing
(Singapore)
Southern Coal
Holdings Pty Ltd
Australia
(50% interest)
Evergreen-China
Energy Technology,
Co. Ltd. Beijing
(30% interest)
USA Operations
K-Fuel®
5
K-Fuel® Process
6
K-Fuel® Business Summary
§ K-Fuel® is a patented coal technology that upgrades low value sub-bituminous, lignite and brown
coals to high ranking thermal coal quality. For example, PRB sub-bituminous coal from 8,000-
8,800 BTU/lb upgrading to 10,200-10,800 Btu/lb or Australian lignite from ~6,500 Btu/lb to 10,200
Btu/lb or ~3,600 kcal/kg to ~5,700 kcal/kg.
coals to high ranking thermal coal quality. For example, PRB sub-bituminous coal from 8,000-
8,800 BTU/lb upgrading to 10,200-10,800 Btu/lb or Australian lignite from ~6,500 Btu/lb to 10,200
Btu/lb or ~3,600 kcal/kg to ~5,700 kcal/kg.
§ The proven technology creates a large market for the massive low-rank, low heating value coal
resources that exist globally, some of which have not been economical to mine. Through the
K-Fuel® process, this coal becomes an economic and saleable product available to power
plants.
resources that exist globally, some of which have not been economical to mine. Through the
K-Fuel® process, this coal becomes an economic and saleable product available to power
plants.
§ Evergreen is acquiring the resources and has established the timeline for moving into full
commercial production to realize value from the deployment of the K-Fuel® process to upgrade
low-ranked quality coal reserves.
commercial production to realize value from the deployment of the K-Fuel® process to upgrade
low-ranked quality coal reserves.
§ Recent financial and corporate developments enable management to refocus on building the
company and further technological refinement.
company and further technological refinement.
§ New management has the experience, direction and resources available to commercialize K-
Fuel® around the globe.
Fuel® around the globe.
7
Evergreen Energy’s K-Fuel® is a proven coal upgrading process that is market-
ready and can be deployed in a large and addressable, growing global market
ready and can be deployed in a large and addressable, growing global market
§ Coal upgrading technologies are becoming increasingly
relevant as the supply of low moisture high rank thermal
coals are in decline in North America and Asia.
relevant as the supply of low moisture high rank thermal
coals are in decline in North America and Asia.
§ Approximately 465 billion tons of coal or 47% of world’s
reserves are sub-bituminous, lignite and brown coals,
which are of limited use without being upgraded. The K-
Fuel® process of upgrading low value coal allows EEE to
take advantage of the significant price arbitrage
opportunity.
reserves are sub-bituminous, lignite and brown coals,
which are of limited use without being upgraded. The K-
Fuel® process of upgrading low value coal allows EEE to
take advantage of the significant price arbitrage
opportunity.
§ Given the vast amount of sub-bituminous resources in key
markets, EEE has only begun to capitalize on
commercialization of its technology. This translates to a
massive potential upside from a full commercial roll-out.
markets, EEE has only begun to capitalize on
commercialization of its technology. This translates to a
massive potential upside from a full commercial roll-out.
§ Global demand for thermal coal is driven by a major new
global build out of coal generation capacity. This
phenomenon is not restricted to Asia.
global build out of coal generation capacity. This
phenomenon is not restricted to Asia.
8
Value Proposition - The Global Opportunity
Source: Peabody
Value Proposition - The Economic Opportunity
§ K-Fuel® upgrades low rank coal reserves
and helps take advantage of the price
spread that exists between low rank and
high rank coal prices.
and helps take advantage of the price
spread that exists between low rank and
high rank coal prices.
§ An installed production capacity of just
5MMTPY could yield an forecasted EBITDA
over $190 million - an extremely compelling
value proposition(i).
5MMTPY could yield an forecasted EBITDA
over $190 million - an extremely compelling
value proposition(i).
|
Value Increase per metric ton (tonne) of upgraded coal
sensitivity table (i) |
|||
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Selling value of
Upgraded Coal |
Value increase/tonne at cost of
|
||
|
$10.00
|
$12.00
|
$14.00
|
|
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US$50
|
$22.00
|
$18.80
|
$15.70
|
|
US$60
|
$32.00
|
$28.80
|
$25.70
|
|
US$70
|
$42.00
|
$38.80
|
$35.70
|
|
US$80
|
$52.00
|
$48.80
|
$45.70
|
|
US$90
|
$62.00
|
$58.80
|
$55.70
|
9
(i). Based on the hypothetical K-Fuel® forecast for Indonesian Coal -
Results vary based on feedstock coal quality and general market conditions for coal
Source: Bloomberg
K-Fuel® Process
§ The K-Fuel® process was developed at
Stanford Research Institute by Edward
Koppelman. Over the last 20+ years, extensive
research and development, together with pilot
and commercial scale facility design,
construction and operation have resulted in a
robust and validated technological process.
Stanford Research Institute by Edward
Koppelman. Over the last 20+ years, extensive
research and development, together with pilot
and commercial scale facility design,
construction and operation have resulted in a
robust and validated technological process.
§ The patented process involves the heating and
pressurization of low value coals, the removal
of the water content, converting the product into
a higher energy K-Fuel® product.
pressurization of low value coals, the removal
of the water content, converting the product into
a higher energy K-Fuel® product.
§ A 750,000 TPY K-Fuel® commercial plant and
testing labs at Gillette Wyoming processed and
tested over 60 low rank coal feed stocks and
demonstrated substantial heat value increases.
testing labs at Gillette Wyoming processed and
tested over 60 low rank coal feed stocks and
demonstrated substantial heat value increases.
§ Coal feed stocks were tested and upgraded
from dozens of sources, including coals from
Inner Mongolia, Indonesia, Russia and the US.
from dozens of sources, including coals from
Inner Mongolia, Indonesia, Russia and the US.
§ Test burns of K-Fuel® at multiple US power
generation facilities validated combustion
benefits.
generation facilities validated combustion
benefits.
10
Schematic Overview of the K-Fuel® Process
Other Technology Applications
11
Activated Carbon/PCI
§ EEE has extensive corporate experience in the application of technology to transform
carbonaceous feedstocks (including coal and biomass) into higher value-added products.
carbonaceous feedstocks (including coal and biomass) into higher value-added products.
§ EEE’s previous work includes ownership of patents related to activated carbon reactor systems
and integration of K-Fuel® into the activated carbon manufacturing process.
and integration of K-Fuel® into the activated carbon manufacturing process.
§ As EEE re-builds its technical and market capabilities, it is evaluating the formation of a
subsidiary to continue to expand the scope and application of its portfolio of coal and
carbonaceous material technologies, with an initial focus on the activated carbon market.
subsidiary to continue to expand the scope and application of its portfolio of coal and
carbonaceous material technologies, with an initial focus on the activated carbon market.
§ Other development opportunities being evaluated include the application of K-Fuel® for
metallurgical markets (including pulverized coal injection) and biomass feedstocks for fuel and
other end products.
metallurgical markets (including pulverized coal injection) and biomass feedstocks for fuel and
other end products.
12
EEE Business Model
§ 3 DISTINCT REVENUE STREAMS
§ EBITA Sharing Agreement
§ EEE receives a pre-determined earnings stream from the profitable operation of a
K-Fuel® plant.
K-Fuel® plant.
§ Equity Earn-In Agreement to the Plant
§ EEE receives a minority interest in plant after partner recoups its capital and
related capital costs.
related capital costs.
§ Long Tail
§ EEE receives a payment (equity, cash or combination) as lower grade coal
resources become audited as reserves and thereby increase the NAV of the coal
company.
resources become audited as reserves and thereby increase the NAV of the coal
company.
Southern Coal Holdings
Evergreen Energy’s Strategic Joint Venture
with WPG Resources
with WPG Resources
13
Southern Coal Holdings Pty. Ltd. Structure
14
Southern Coal Holdings
Incorporated in Australia
50%
50%
§ NYSE Arca under symbol: EEE
§ Shares outstanding: 25,701,845
§ Share Price 9/20/11- $1.10
§ Market Cap: $28,000,000
§ 52 Week Range: $0.52 - $4.98
§ ASX Listed: WPG
§ Shares outstanding: 268,500,000
§ Share Price 9/20/11- $1.23
§ Market Cap: $305,000,000
§ 52 Week Range: $0.60 - $1.25
§ On June 9, 2011, Evergreen and WPG announced the finalization of
the venture known as Southern Coal Holdings (SCH), which is
equally owned by WPG and Evergreen.
the venture known as Southern Coal Holdings (SCH), which is
equally owned by WPG and Evergreen.
§ SCH owns coal resources in South Australia, the most important of
which are Penrhyn (sub-bituminous) and Lochiel North (lignite). SCH
is the exclusive licensor of Evergreen’s coal upgrading technology in
Australia.
which are Penrhyn (sub-bituminous) and Lochiel North (lignite). SCH
is the exclusive licensor of Evergreen’s coal upgrading technology in
Australia.
§ SCH will use the K-Fuel® process to upgrade its low rank coal assets
for domestic and international markets.
for domestic and international markets.
§ SCH’s K-Fuel® license includes the right to identify and upgrade
other Australian coal resources and is not limited to its current
portfolio.
other Australian coal resources and is not limited to its current
portfolio.
15
Southern Coal Holdings:
A Strategic Joint Venture
A Strategic Joint Venture
Southern Coal Holdings:
A Strategic Joint Venture
A Strategic Joint Venture
Bob Duffin WPG Chairman - June 10, 2011
§ “WPG conducted extensive due diligence on the upgrading sector
prior to the selection of Evergreen’s K-Fuel® process.”
prior to the selection of Evergreen’s K-Fuel® process.”
§ “WPG has no doubt that the process works at both the laboratory
and production plant scale, and is capable of achieving a significant
increase in calorific value and reduction in greenhouse gasses when
applied to sub-bituminous and lignite coals such as those at SCH’s
Penrhyn and Lochiel North project areas.”
and production plant scale, and is capable of achieving a significant
increase in calorific value and reduction in greenhouse gasses when
applied to sub-bituminous and lignite coals such as those at SCH’s
Penrhyn and Lochiel North project areas.”
16
Ilyas Khan Chairman of EEE (left) and Bob Duffin Chairman of WPG
Sign Definitive Agreement in Denver, June 2011
17
Port Pirie Development Plan
Port Pirie, South Australia
§ WPG is currently in process of a pre-
feasibility study analysing Port Pirie for
a possible export terminal and K-Fuel®
processing plant .
feasibility study analysing Port Pirie for
a possible export terminal and K-Fuel®
processing plant .
§ Advantages of location:
§ Existing Capacity
§ Existing rail infrastructure
§ Use Penrhyn coal as feedstock
§ Access to Asia Pacific export
markets
markets
SCH Penrhyn and Lochiel North Coal Projects
18
Penrhyn Coal Project
Permian semi-bituminous coal in the Arckaringa Basin
Resource:
Sub-Bituminous Coal resource of 200 - 300 million metric
tonnes (MMT)
tonnes (MMT)
Project Update:
• WPG is mid way through a drilling program aimed at
outlining 200MMT Inferred Coal Resource
outlining 200MMT Inferred Coal Resource
• Results to date are encouraging
• Penrhyn is viewed as domestic power station coal or
export coal after upgrading using clean coal technology
provided by Evergreen Energy
export coal after upgrading using clean coal technology
provided by Evergreen Energy
Lochiel North Coal Project
Lignite coal Project in Northern St. Vincent Basin
Inferred Coal Resource
Lignite resource of approximately 270MMT
Project Update:
Lochiel North is viewed as domestic power station coal or
export coal after upgrading using clean coal technology
provided by Evergreen Energy
export coal after upgrading using clean coal technology
provided by Evergreen Energy
§ Tested both Penrhyn and Lochiel coals - August and September 2011.
§ After initial test results were analysed from Lochiel North and Penrhyn it is likely that
SCH will focus on the development of the Penrhyn coal assets which could include a
K-Fuel® plant
SCH will focus on the development of the Penrhyn coal assets which could include a
K-Fuel® plant
§ Highlights of the Penrhyn testing program included:
§ Upgraded to heating values higher than 5,500 kcal/kg prior to re-hydration
§ Stable, shippable product with heating value higher than 5,000 kcal/kg
§ Reduced sodium by up to 50%
§ Reduced chloride by up to 70%
§ Currently working on business case and finishing pre-feasibility study.
19
Testing Program
20
Penrhyn Test Results
|
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Composite #1
|
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|
Parameter
|
Coal
|
K-Fuel® Produced
|
|
CV - kcal/kg
|
3595
|
5521
|
|
Chlorine % Dry Basis
|
1.74
|
0.68
|
|
Sodium % Dry Basis
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1.4
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0.8
|
|
Moisture
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43.30%
|
12.96
|
|
|
|
|
|
|
|
|
|
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Composite #2
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|
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Parameter
|
Coal
|
K-Fuel® Produced
|
|
CV - kcal/kg
|
3322
|
6410
|
|
Chlorine % Dry Basis
|
2.8
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0.7
|
|
Sodium % Dry Basis
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1.52
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0.66
|
|
Moisture
|
49.40%
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6.41%
|
|
|
|
|
|
|
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Composite #3
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Parameter
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Coal
|
K-Fuel® Produced
|
|
CV - kcal/kg
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3440
|
5819
|
|
Chlorine % Dry Basis
|
2.32
|
0.71
|
|
Sodium % Dry Basis
|
1.7
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1.0
|
|
Moisture
|
45.10%
|
8.10%
|
|
|
|
|
|
|
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|
Note: Stabilized k/cal data not included
21
K-Fuel® is a value-added product
§ K-Fuel® upgrading technology processes low quality sub-bituminous coal resulting
in:
in:
§ Higher energy value - Demonstrated to increase the efficiency and heating value of
sub-bituminous, lignite and brown coals by 30% on average, accomplished by
decreasing equilibrium moisture content by 50%
sub-bituminous, lignite and brown coals by 30% on average, accomplished by
decreasing equilibrium moisture content by 50%
§ Higher economic value - Allows product to compete with bituminous coals and makes
low rank coal marketable
low rank coal marketable
§ Physically and chemically stable product - Handled/transported as the feed coal
§ Significantly reduced transport costs - Reduced moisture content can lead to lower
transportation costs
transportation costs
§ More environmentally friendly product - More efficient burning could lead to lower
carbon emissions, and in particular reduced Hg, SO2 and NOx
carbon emissions, and in particular reduced Hg, SO2 and NOx
§ The consequence is that a significantly large number of low quality, high moisture
coal deposits worldwide become economically viable and more environmentally
friendly
coal deposits worldwide become economically viable and more environmentally
friendly