Date: Friday, 16 May 2014

Dear Shareholders,

Following a global search for technologies, Ignite Energy Resources (“Ignite”) has secured a $20 million government grant for the design, construction and operation of a lignite-upgrading plant in Victoria’s Latrobe Valley.

The funding, part of the Advanced Lignite Demonstration Program, will allow Ignite to proceed with an $84 million project to demonstrate its unique Catalytic Hydrothermal Reactor (‘Cat-HTR’) technology (“the Project”). The Project will involve the construction of a commercial-scale reactor module in an end-to-end pre-commercial plant (“the Plant”).

The $90 million Advanced Lignite Demonstration Program is jointly funded by the Commonwealth and Victorian Governments. It supports the development of pre-commercial, demonstration-scale, upgrading processes for raw lignite.

Ignite’s Cat-HTR technology chemically transforms lignite, also known as brown coal, into two high-energy products:

  • Synthetic crude oil – that can be processed in existing oil refineries to produce an array of fuels, including gasoline, kerosene, and diesel; and
  • Metallurgical-grade coal – that can be used in the manufacture of steel and lower-emissions power generation.

The products will be tested by potential customers in order to gain commercial off-take agreements to enable the funding of expansion of the commercial scale reactors to commercial-scale plants.

The Project aligns with a Memorandum of Understanding (MoU) entered into by Ignite and Indonesian listed company PT Bukit Asam (Persero) Tbk (Bukit Asam) on 30 April 2014. The MoU contemplates utilising Cat-HTR technology for integrated resource development projects in Indonesia and Australia.

Ignite has successfully converted samples of Bukit Asam’s 7.3 billion tonnes of low rank coal into syn-crude and upgraded coal at its existing Cat-HTR pilot facilities. Cat-HTR offers a viable solution to both countries increasing dependency on crude oil and petroleum imports. This appears to align well with the Indonesian Government’s directive to add more local value.

The government’s ALDP press release can be downloaded here.

Ignite’s full ALDP press release can be downloaded here.

If you have any questions or comments, please do not hesitate to contact us.

Kind regards,

Len Humphreys
Chief Executive Officer
Ignite Energy Resources
Phone: +61 (2) 9929 9007