a breakthrough in clean energy…
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July 22, 2012
Footer text here
Disclaimer
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.
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Elementa - Confidential
Corporate Overview
October, 2013
Future Elementa
Commercial Demonstration Plant
In Sault Ste. Marie ON - SSM CDP. Converting
50,000 tonnes of MSW into 9.5 MW of
Clean Power.
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Elementa - Confidential
Elementa – the right time
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.
Eliminate
Landfill
• No
pollution
• Reduce
GHG’s
Clean
Energy
• Efficient
Energy
• Extensive
Energy
Products
Climate
Change
• Reduce
methane
from
landfills
• Provide
low-carbon
energy
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Elementa - Confidential
Elementa at a glance.
Elementa at a glance
Elementa 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
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Elementa - Confidential
Elementa
Proposition
CommercialValue
Value Proposition
Competes with conventional  On a life cycle basis Elementa’s technology cost is 3.3 cents/KW with no
power generation.
gov’t funds – comparable to conventional power generation
Eliminate Landfill
.
 Waste management
 Generating cost competitive sustainable clean energy
 Climate change
NO Incineration
Proven & Patented
.
6
 Elementa’s technology is a solution for three of the world’s most pressing
environmental problems:
Elementa - Confidential
 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
 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 6
Capital raise
Elementa in the News
Recent media articles on Elementa:
http://www.battelle.org/media/press-releases/battelle-wins-two-energyawards
http://www.waste-management-world.com/articles/2013/11/steamreformation-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
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Elementa - Confidential
A look at Elementa Group Inc. - Existing
Capital raise
Capitalization
Sources of capital
• Sale of common shares
• Notes payable note 1
• Convertible debentures note 2
Total
Accrued interest on debt
$15.0m
$1.7m
$.7m
$17.4m
$.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
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Elementa - Confidential
Corporate
Capital raiseCapital Raise Approach
Raise capital as needed, under favourable conditions to
minimize dilution and increase share value
Current capital raise of $10M of which $3m are Flow Through Shares
Planned use of funds
• Cash reserve for corporate burn
• SSM CDP related payables
• Corporate payables
• Pay down corporate debt
• Investment in SSM CDP
$2.2M
$.7M
$1.1M
$2.0M
$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%
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Elementa - Confidential
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Elementa
increasing
value
Corporate-Share
Valueshareholder
Increase: to 2017
major equity
market capital raise based on major milestones
2017 $425m raise
@$17.00 /share, Q4 ‘13
$18.00
$15.00
Q1 ‘16 $30m raise
target @ $10.00/share,
dilution of 5%
$12.00
$9.00
$6.00
$3.00
Q1 ‘14 $10m
raise, price TBD,
estimated
dilution of 11%
Q4 ‘14 $15m raise
target @$5.00/share,
dilution of 5%
$2013
2014
2015
2016
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Elementa - Confidential
Business Model Rollout Plan
Via
Business model is market JV partnerships where Elementa will earn technology
licensing from the plants and share of profits along with JV partner.
Phase 1
First 8 plants
• 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
Phase 2
Next 7 plants
• 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
Phase 3
Full business model
implementation
• 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
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Elementa - Confidential
# of Facilities
Elementa Plant Rollout Plan - MSW to power
10
9
8
7
6
5
4
3
2
1
0
50 k tonne
100 k tonne
300 k tonne
Total
2014 2015 2016 2017 2018 2019 2020 2021
Phase 1 - 8 plants
Total Capital $630M
Phase 2 – 7 plants
Total Capital $950M
Phase 3 – future
plants
Total Capital
$2,130M
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Elementa - Confidential
Elementa Group Inc. projected Income Statement
In millions of $’s except for per share value
Revenue (note 1)
Engineering fees
License, EP fees
Technology development fees
Total Revenues
Operating Expenses
Engineering
Bus.Dev.
G&A
R&D plants
Total Expenses
EBITDA
Depreciation
Profit before tax
Taxes
Net profit
2013
2014
2015
2016
2017
2018
0
0
0
2.0
0
4.0
6.0
6.0
0
9.5
15.5
16.0
0
17.5
33.5
0
48.8
17.0
65.8
0
74.0
18.0
92.0
0
116.0
20.0
136.0
0
171.0
25.0
196.0
1.4
.2
1.2
0
2.8
(2.8)
0
(2.8)
0
(2.8)
1.8
1.0
3.0
.2
6.0
0
.5
(.5)
0
(.5)
3.3
1.9
4.6
1.3
11.1
4.4
2.0
2.4
0
2.4
4.9
3.0
6.3
1.9
16.1
17.4
2.6
14.8
0
14.8
6.9
4.8
8.4
2.4
22.5
43.3
2.6
40.7
2.5
38.2
8.7
6.1
10.4
3.0
28.2
63.8
3.7
60.1
16.0
44.1
10.5
7.1
12.1
3.0
32.7
103.3
4.5
98.8
26.2
72.6
12.3
8.3
14.0
3.0
37.6
158.4
5.1
153.3
40.6
112.7
Stabilization period per share value using average
of 5 publically traded waste management companies
Oct 2013 earnings per share multiple
$20.51
2019
$33.70
2020
$52.31
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.
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Elementa
- Confidential
July 22, 2012
Footer text here
Projected Increase in Share Value: to 2017 major equity
market capital raise and Beyond
Value increases with Technology Platform
& commercialization of new products.
Share
Value
Increase
$100.00
$75.00
Market
capital
Today raise
$50.00
Increase from fossil fuels to all
outputs
Increase from Waste
to Hydrogen
$40.00
$20.00
$30.00
$15.00
Increase from Waste to Synthetic
Green Fuels & Chemicals
$25.00
$10.00
$20.00
$5.00
N
E
W
M
A
R
K
E
T
S
Increase from MSW to
Power
$17.00
$-
2003
2008
2013 2017
2018 2020 2022 2024 2026 2028 2030
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Elementa - Confidential
See Platform Technology Slide 15
Bio Energy Companies:
Post IPO performance and implications for Elementa
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
S
h
a
r
e
40
30
Industrial synthetic biology platform to convert plant sugars into
flexible building blocks that can be used in a wide range of
products.
Gevo
Using a combination of synthetic biology and chemistry produces
isobutanol, a platform chemical for the liquid fuels and
petrochemical market
KiOR
Proprietary technology platform to convert biomass
into renewable crude oil .
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20
p
r
i
c
e
Amyris
35
Market value
stabilization
15
10
Solazyme Feedstock flexible platform using standard industrial
fermentation equipment to efficiently scale and accelerate
microalgae's natural oil production time to just a few days.
5
0
Average
IPO
Highest
Apr 1 13
Oct 3 13
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).
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Elementa - Confidential
See Platform Technology Slide 17
Technology Overview – process schematic
Indirect Heating
H 2O
MSW
Cleaned
Syngas
Elementa’s
Patented
Technology
U.S. Patent
COMBUSTION FREE
No. 7,794,689
No Oxygen
FEEDSTOCK
Syngas
Waste
MSW & Bio-Solids
Biomass
Fossil Fuels
CARBONACEOUS MATERIAL
Elementa - Confidential
Power
Cleaned
Syngas
Hydrogen
Green Fuels
& Chemicals
CLEAN ENERGY MATRIX
“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.
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Platform Technology:
Projected economics of converting MSW to 6 energy products*
50%
Return on Capex
Investor IRR
40%
30%
Elementa’s Business Model
Use the Technology Platform as
a driver for establishing highly profitable
business opportunities. Opportunities are
based upon market and geographical
conditions. The chart assumes best global
economic conditions.
20%
10%
0%
Bio Fuels
*300,000 tonne of MSW per year plants at selected markets
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Elementa - Confidential
Elementa’s Platform Technology:
investment grade potential beyond
MSW to Power – a unique business potential.
17
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
2.
Multiple of Net Income per share (note 1)
3.
Discounted NPV of future cash flow – 8%
4.
NBV plus 8 multiple of Net Income (note 1)
Per share value
Elementa enterprise value
$.01
$.00
$3.59
$.05
$3.65
$204m
Enterprise value increase from additional
Feedstock output combinations ( 67% of current market valuation)
1.
Biomass to electricity
2.
MSW to hydrogen
3.
MSW to diesel
$.20
$.38
$3.78
$.37
$4.73
$278m
$.56
$1.71
$3.02
$2.07
$7.36
$595m
$1.30
$4.43
$3.27
$3.34
$12.34
$997m
$200m
$200m
$200m
Total enterprise value
$204m
$200m
$478m
$400m
$995m
$200m
$200m
$200m
$600m
$1597m
Number of shares outstanding
Per share value
55.8m
$3.66
58.7m
$8.14
80.9m
$12.30
80.9m
$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 - Confidential
Elementa’s First Plant - Sault Ste Marie
Commercial Demonstration Plant (SSM CDP)
Key Metrics
• Capital cost $54m
• Tonnes of waste processed 50,000
• MW produced 9.5
• Average annual revenue $13.5m
• Average annual EBITA $4m
• 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
Elementa - Confidential
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Projected SSM CDP Capital Costs & Gov’t Funding
Land and building
Engineering
Waste handling equipment
Elementa process and gas cleaning equipment
Power generation equipment
Misc equipment
Contingency (10%)
EPCM (15%)
Total
$2,990,000
$8,409,000
$2,637,000
$9,859,000
$15,012,000
$4,342,000
$4,325,000
$6,487,000
$54,061,000
Governments grants and status
SDTC - past stage 2 at approval stage
IDF – preparation for submission in Oct
CRIBE – previously approved for $900k
IRAP – approved previous submissions
NOHFC – 50% approved
Total
Government loans – NOHFC
Total government funds
Net Capital Cost to be financed
$8,929,000
$5,500,000
$1,850,000
$1,250,000
$1,000,000
$18,529,000
$1,000,000
$19,529,000
$34,532,000
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Projected SSM CDP Financing
Net capital cost to be financed
$34,532,000
Capital lease on front end equipment
Debt on land, building
Toromont owning power island
$2,000,000
$2,000,000
$15,012,000
$19,012,000
$15,520,000
Remaining capital cost to be financed
Elementa equity
Debt to be provided
Cat Finance
EDC
$5,000,000
$10,520,000
$5,270,000
$5,270,000
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Elementa - Confidential
Projected SSM CDP Financials
20 yr annual
average
Key performance indicators
Revenues
Electrical
Tipping fee
Other
Total revenue
Operating costs
Labour
Consumables
Maintenance and other
Total operating cost
EBITDA
Cash Flow
$7,412,000
$4,952,000
$1,114,000
$13,478,000
Capex
Government funding
Net Capex
Equity
Debt and capital lease
$54,061,000
$19,529,000
$34,532,000
$5,000,000
$14,520,000
$3,290,000
$4,311,000
$1,623,000
$9,224,000
$4,254,000
$2,021,000
EBITDA Return net capex
12%
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
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Elementa - Confidential
Projected Elementa Plant Financials at full scale
20 yr annual
average
(000’s $)
Key performance indicators
Revenues
Electrical
Tipping fee
Other
Total revenue
Operating costs
Labour
Consumables
Maintenance and other
Total operating cost
EBITDA
Cash Flow
Capex
Equity
Debt and capital lease
$55,786
$30,263
$ 3,317
$89,366
EBITDA Return net capex
18.9%
Investor cash flow IRR
36.2%
Debt interest & term 7%, 15 years
$9,870
$32,233
$16,430
$48,533
$40,833
$22,379
$198,045
$49,511
$148,534
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
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Elementa - Confidential
Via
The Waste Challenge
Eliminate Landfilling – Provide Clean Energy
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
Land fills in operation
Climate change issues are driving market conditions
20000
Energy security is a global concern
15000
Global requirements for clean energy is rapidly growing
Meeting strict environmental permitting conditions
10000
Elementa Solutions
•
•
•
•
•
•
•
in USA
Land fills in operation
5000
0
Advanced Conversion Technology – no landfill
1979
1988
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
2006
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Elementa - Confidential
Technology Breakthrough
Your “bag of garbage” contains the elements to unleash a cleaner more sustainable world.
A Patented Steam Technology: Combustion-Free - Unconventional Chemistry
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”
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Elementa - Confidential
Electrical Efficiency Comparison: Elementa out
performs other technologies & achieves “Grid Parity”
The first plank of 6 energy products
Levelized Cost of Energy
LCOE
Homes Powered /M$ of Capex
350
300
250
200
150
100
50
0
$0.050
$0.040
$0.030
$0.020
$0.010
$-
WTE Competitors
Mature Power Producers
Strong competitor advantages driving unique economic solutions in cleantech.
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Elementa
July
22, 2012 - Confidential
Footer text here
Elementa’s Technology Comparison – other WTE technologies
Elementa is clearly superior – why? Elementa is more efficient
Partial oxidation
Energy conversion efficiency
60%
n/a
17%
30%
30%
25%
Waste volume reduction
98%
nil
85%
65%
93%
98%
Dioxin and furan emissions
n/d
n/a
large
n/d
some
some
Capital cost $M/net MW
2-4
nil
9-14
5-7
6-8
10-13
none
some
some
some
some
Scalability and modularity
large
Syngas heating value BTU/cubic ft
350
nil
n/a
300
180
180
Carbon in waste converted to syngas
95%
nil
n/a
40%
65%
65%
n/a – not applicable
Elementa - Confidential
n/d – not detectable
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Elementa Technology Partners
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.
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
EPC contractor for the front-end pre-treatment
incorporating Vecoplan equipment.
Supplier of front end processing equipment,
including shredders, conveying and sorting..
Engineering design company performing the
detailed engineering on the gasification island
and syngas cleaning system
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
invest in
Reasons
totoInvest
inElementa
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
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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 Zwierschke
President & C.E.O.
jay@elementagroup.com
Mobile: 905-325-1901
Garry Rawson
CFO & VP Corporate Development
grawson@elementagroup.com
Mobile: 905-988-3260
Office Phone: 905-687-1900
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