Leaf Resources Completes PFS On A Commercial Biorefinery In Queensland

Leaf Resources Ltd (ASX: LER) is one of the global leaders converting plant biomass into industrial sugars, and the entire business is contained within renewable carbon containing products. The company uses its proprietary process for conversion of biomass-to-functional industrial sugars which enable multitude downstream technologies to produce renewable chemicals, that will substitute petrochemicals used in manufacturing today.

On 20^th May 2019, the company announced that is has completed the pre-feasibility study (PFS) on a second-generation commercial biorefinery in Queensland. A bio-manufacturing hub is intended to be developed in a sugarcane producing region of Queensland after the PFS assessment of various locations.

Currently, there are 12 million bone dry tonnes of available biomass produced in Queensland, out of which more than 90% of the contribution is being made by sugarcane industry and most of them come from North Queensland region. The company also learned that 94% of mills in the vicinity could provide biomass to Leaf based on biomass figures currently collected.

The company would use its patented Glycell™ technology in the proposed biorefinery, which would reduce the cost of converting plant waste and speed up the process. The company is commercialising its technology using glycerol to enhance the recovery of valuable sugars.

As a part of the PFS, the locations for proposed biorefinery were explored in Queensland and focused on one greenfield site and one brownfield site in the North Queensland region. According to the PFS, both sites presented similar risks and opportunities, and both would benefit from the cane cleaning technology due to the greater yield of sugar per hectare and lower production costs.

The company’s globally dominant technology has the capacity to draw the attention of other companies in the biorefinery business in Queensland, seeking the industrial sugars produced by the technology. Furthermore, in Australia, there is a minimal requirement of capital in the sugar industry due to international competition colocation with this industry clears the pathway for renewed investment with value addition across the chain of the sugar industry.

According to the PFS study, there is an economically viable proposition for the development of a biorefinery based on Glycell™ technology using biomass from the sugarcane industry. The company also stated that there is no shortage of biomass availability in the form of bagasse or cane trash. This will help the company to facilitate several ligno-cellulosic initiatives without having to bear the risk of the biomass being commoditised, resulting in unprofitable ventures.

Key Personnel’s statement

Alex Baker, CEO of the company, said the company wanted to further investigate the next phase after finding an abundance of biomass in Queensland and potential benefits. The Palaszczuk Government is pleased to have funded the validation works and pre-feasibility study through Biofutures Acceleration Program and is investing more on ideas and more industries.

On 10^th May 2019, the company announced about its progress regarding the establishment of its first Malaysian biorefinery project.

Stock Performance

The market capitalisation of the company is A$305.21 million, and the stock has a 52-week high and low of A$0.094 and A$0.027 respectively. The stock opened and closed flat at A$0.036 on 20^th May 2019. The last one-year return of the stock is negative 48.5%, and the YTD return stands at negative 18.18%.

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