Attached files
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| 8-K - FORM 8-K DATED FEBRUARY 14, 2011 - EVERGREEN ENERGY INC | f8k_021411i701.htm |
Exhibit 99.1
NYSE Arca: EEE
NYSE Arca: EEE
February 2011
February 2011
www.evgenergy.com
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
presentation are encouraged to study all of our filings with the Securities and Exchange
Commission. Our ability to execute our business plan and develop the GreenCert™ or K
-Fuel® technologies may be adversely impacted by unfavorable decisions in pending
litigation, the inability of the Company to satisfy the terms of the settlement agreement
with the holders of its 2007 and 2009 Notes, delays in the commencement of operations
at our Fort Union test facility, or by our inability to raise sufficient additional capital in a
timely manner to pursue the development of our technology. Readers of this
presentation are cautioned not to put undue reliance on forward-looking statements.
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
presentation are encouraged to study all of our filings with the Securities and Exchange
Commission. Our ability to execute our business plan and develop the GreenCert™ or K
-Fuel® technologies may be adversely impacted by unfavorable decisions in pending
litigation, the inability of the Company to satisfy the terms of the settlement agreement
with the holders of its 2007 and 2009 Notes, delays in the commencement of operations
at our Fort Union test facility, or by our inability to raise sufficient additional capital in a
timely manner to pursue the development of our technology. Readers of this
presentation are cautioned not to put undue reliance on forward-looking statements.
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
presentation are encouraged to study all of our filings with the Securities and Exchange
Commission. Our ability to execute our business plan and develop the GreenCert™ or K
-Fuel® technologies may be adversely impacted by unfavorable decisions in pending
litigation, the inability of the Company to satisfy the terms of the settlement agreement
with the holders of its 2007 and 2009 Notes, delays in the commencement of operations
at our Fort Union test facility, or by our inability to raise sufficient additional capital in a
timely manner to pursue the development of our technology. Readers of this
presentation are cautioned not to put undue reliance on forward-looking statements.
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
presentation are encouraged to study all of our filings with the Securities and Exchange
Commission. Our ability to execute our business plan and develop the GreenCert™ or K
-Fuel® technologies may be adversely impacted by unfavorable decisions in pending
litigation, the inability of the Company to satisfy the terms of the settlement agreement
with the holders of its 2007 and 2009 Notes, delays in the commencement of operations
at our Fort Union test facility, or by our inability to raise sufficient additional capital in a
timely manner to pursue the development of our technology. Readers of this
presentation are cautioned not to put undue reliance on forward-looking statements.
Executive Summary
§ K-Fuel® is a patented coal technology which upgrades low value sub-bituminous, lignite and
brown coals to high ranking thermal coal quality, for example from 3,500 kcal/kg (~6,300 BTU/lb)
to 5,650 kcal/kg (~10,200 BTU/lb)
brown coals to high ranking thermal coal quality, for example from 3,500 kcal/kg (~6,300 BTU/lb)
to 5,650 kcal/kg (~10,200 BTU/lb)
§ The proven technology creates a large market for the massive low quality coal resources that
exist globally, and which have not been economical to mine. Through the K-Fuel® process, this
coal becomes a saleable product available to power plants
exist globally, and which have not been economical to mine. Through the K-Fuel® process, this
coal becomes a saleable product available to power plants
§ Evergreen has a clear timeline for moving into potential commercial demonstration activities and
realize value from the deployment of K-Fuel® process to upgrade low quality coal reserves
realize value from the deployment of K-Fuel® process to upgrade low quality coal reserves
§ Recent financial and corporate developments allows management to re-focus on building the
company
company
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EEE’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
be deployed in a large and addressable, growing global market
(i). Based on the Indonesian Coal Model
§ Coal upgrading technologies are becoming increasingly
relevant as supply of low moisture high rank thermal coals
are in decline in North America and Asia
relevant as 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 unless 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 unless 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
these 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
these 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
§ Global demand for thermal coal is driven by 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
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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
5MMtpa could yield an approximate EBITDA
over $150 million - an extremely compelling
value proposition
5MMtpa could yield an approximate EBITDA
over $150 million - an extremely compelling
value proposition
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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
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$10.00
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$12.00
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$14.00
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US$50
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$22.00
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$18.80
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$15.70
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US$60
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$32.00
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$28.80
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$25.70
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US$70
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$42.00
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$38.80
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$35.70
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US$80
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$52.00
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$48.80
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$45.70
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US$90
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$62.00
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$58.80
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$55.70
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(i). Based on the hypothetical K-Fuel® forecast for Indonesian Coal
Source: Bloomberg
0
20
40
60
80
100
120
140
160
180
200
Jan
06
May
06
Sep
06
Jan
07
May
07
Sep
07
Jan
08
May
08
Sep
08
Jan
09
May
09
Sep
09
Jan
10
May
10
Sep
10
Jan
11
Historical coal prices US$ 2006-11
Power River Basin
4670 kcal/kg
FOB Newcastle 6700
kcal/kg
FOB Richards Bay
6000 kcal/kg
Price Spread
K-Fuel® Process
§ The K-Fuel® process was developed at
Stanford Research Institute by Edward
Koppelman. Over the last 26 years, $375
million has been invested in research and
development of the technology process
Stanford Research Institute by Edward
Koppelman. Over the last 26 years, $375
million has been invested in research and
development of the technology process
§ The patented process involves the heating and
pressurization of low value coals, and the
irreversible removal of the water content, and
converting the product into a higher energy K-
Fuel® product
pressurization of low value coals, and the
irreversible removal of the water content, and
converting the product into a higher energy K-
Fuel® product
§ A 750,000 tpa K-Fuel® commercial plant and
testing labs in Gillette Wyoming processed and
tested over 60 low rank coal feed stocks and
demonstrated substantial heat value increases
testing labs in Gillette Wyoming processed and
tested over 60 low rank coal feed stocks and
demonstrated substantial heat value increases
§ Coal feed stocks tested and upgraded included
coals from Inner Mongolia, Indonesia, Russia
and the US, from dozens of sources
coals from Inner Mongolia, Indonesia, Russia
and the US, from dozens of sources
§ Test burns of K-Fuel® at multiple US power
generation facilities validate combustion
benefits
generation facilities validate combustion
benefits
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Schematic Overview of the K-Fuel® Process
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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
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EEE Business Model
§ EEE’s business model is based on a plan to generate a number of diverse upfront and recurring
revenue streams
revenue streams
§ EEE plans to sub-license the K-Fuel® technology to one or multiple projects in the local market.
EEE expects to provide technical, engineering and construction services
EEE expects to provide technical, engineering and construction services
§ EEE expects to receive an upfront licensing fee for sub-licensing the K-Fuel® technology into a
project.
project.
§ EEE anticipates to receive a royalty payment based on volume of upgraded coal produced and the
price that it is sold at earned equity share of the JV on the output/reserve upgraded as a result of the
application of the K-Fuel® technology
price that it is sold at earned equity share of the JV on the output/reserve upgraded as a result of the
application of the K-Fuel® technology
§ A licensing model minimizes the upfront capital commitment requirement by EEE, and ensures an
ongoing economic participation in the project’s success via the royalty payment. This also reduces
the engineering and construction risk
ongoing economic participation in the project’s success via the royalty payment. This also reduces
the engineering and construction risk
§ Other revenue streams include: coal enhancement fees based on plant output (relating increased
energy content of the coal); marketing fees in relation to the marketing of the upgraded coal;
management fees in relation to the operation and management of the plants; and participation in any
value derived from the reduction in greenhouse gas emissions
energy content of the coal); marketing fees in relation to the marketing of the upgraded coal;
management fees in relation to the operation and management of the plants; and participation in any
value derived from the reduction in greenhouse gas emissions
§ EEE expects to partner with groups who can effectively underwrite a project
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EEE Business Model
Strategic Joint Venture with WPG Resources
§ In February 2011, EEE signed an MOU
agreement with WPG Resources (ASX: WPG)
to jointly develop and commercialize EEE’s K-
Fuel® technology throughout Australia
agreement with WPG Resources (ASX: WPG)
to jointly develop and commercialize EEE’s K-
Fuel® technology throughout Australia
§ Under the proposed 50/50 JV, it is anticipated
that WPG may contribute its South Australian
Penrhyn and other coal assets and EEE will
contribute its coal upgrading technology
that WPG may contribute its South Australian
Penrhyn and other coal assets and EEE will
contribute its coal upgrading technology
§ Penrhyn is a sub bituminous coal deposit
located 25km from the rail loading loop and
accommodation village built for WPG’s flagship
Peculiar Knob iron ore project
located 25km from the rail loading loop and
accommodation village built for WPG’s flagship
Peculiar Knob iron ore project
§ In addition to the announced MOU, WPG has
also subscribed to US$2 million of EEE’s
capital raising announced on 2 February 2011
to achieve a 3.1% stake in EEE.
also subscribed to US$2 million of EEE’s
capital raising announced on 2 February 2011
to achieve a 3.1% stake in EEE.
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Location of Penrhyn Coal Asset
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EEE Commercial Strategy for 2011
§ EEE’s immediate plan is to use its enhanced capital base to accelerate the
commercialization of the K-Fuel® technology. In addition to a re-launched test facility in the
United States that is expected to be operational prior to the end of August; EEE plans to
commercialization of the K-Fuel® technology. In addition to a re-launched test facility in the
United States that is expected to be operational prior to the end of August; EEE plans to
§ Execute on Australian Joint Venture with WPG Resources
§ Enter into joint venture agreements with major groups in Asia and USA to commence
testing and large scale commercialization of K-Fuel® technology to build earnings and
cash flow
testing and large scale commercialization of K-Fuel® technology to build earnings and
cash flow
§ EEE is currently evaluating Asian and US market strategies
§ The ability of the K-Fuel® technology to upgrade a large base of low rank, high
moisture coal reserve represents enormous commercial opportunity
moisture coal reserve represents enormous commercial opportunity
§ Significant interest has been expressed by Asian and US coal mining and power
utilities seeking to partner with EEE
utilities seeking to partner with EEE
§ A number of Indonesian and US coal samples have been tested by EEE and
successfully processed, confirming the applicability of K-Fuel® technology
successfully processed, confirming the applicability of K-Fuel® technology
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EEE Commercial Strategy 2011 (cont’d)
§ Additional strategic plans:
§ Continue to evaluate joint venture opportunities with a view to adding sub-bituminous,
lignite and brown coal assets and rolling out K-Fuel® process
lignite and brown coal assets and rolling out K-Fuel® process
§ Continue to develop core K-Fuel® process
§ Invest in potential PCI / Coking coal application of K-Fuel® and pick up from successful
research and development previously undertaken
research and development previously undertaken
§ Evaluate the potential for a dual listing of EEE on TSX-V to complement existing NYSE
Arca listing
Arca listing
Investment Summary
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Highlight
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EEE
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Operates in Large and
Growing Markets |
§ Increasing global demand for economic, high energy value coal
§ Global shift towards ‘clean’ energy sources
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Strong Platform to
Establish Dominant Market Position |
§ Advanced commercial and technical viability
§ Strategic relationships to accelerate global platform and growth
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Proprietary, Proven and
Differentiated Technology |
§ Proprietary K-Fuel® technology, upgrading low quality sub-bituminous coal into
coal with higher energy content and lower end user greenhouse emissions § Patented coal upgrading process developed over 25 years
§ Currently exploring PCI / Coking Coal application of K-Fuel® technology
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Compelling Business
Model |
§ Margin structure typically sustainable in variable market conditions
§ Evolutionary process presents additional development opportunities
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Diverse Revenue Streams
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§ Number of diverse upfront and recurring revenue streams
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Experienced Management
Team Focussed on Growth and Profitability |
§ Relevant experience in developing and financing coal technologies
§ Significant global expertise and relationships
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