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PG1 Provides March 2019 Quarter Operational Update, Reports Production gains of 200%

  • May 01, 2019 05:48 PM AEST
  • Team Kalkine
PG1 Provides March 2019 Quarter Operational Update, Reports Production gains of 200%

Pearl Global Limited (ASX: PG1) announced the review of activities for March 2019. The company managed to achieve the production gains of more than 200%. Higher volumes, systems improvement and efficiencies on the operational front were realised on the back of focus to achieve scalable growth. As more revenue is expected from the sales of fuel and carbon char as opposed to steel, the company has worked with ATP (Australian Tyre Processors Pty Ltd) to better process the feedstock supplied to it for the operations. A reduction in steel production of ~40% allows for gains in fuel at 16.5% and carbon char volumes at 12.5%. The company was able to increase its production rates of higher margin products while increasing its operational efficiencies, which will boost the revenue growth going forward.

Gold MTF non-AMP

ATP is engaged in a waste tyre collection and recycling business, supplying Pearl’s feedstock for its operations. ATP sources and collects used tyres from new tyre retailers and industrial operators. For its disposal services, ATP charges an amount as a fee on per ton basis from the customers.

New sales contracts for its fuels has been negotiated well by the company using a new sales channel, which is based in the Middle East with distribution channels throughout Asia. Earlier, the company had only one fuel customer that was in Malaysia. The introduction of a wider range of customers has given better terms and margins for the company. This new sales channel has seen total requests of 500 tonnes of fuel per month from the customers as a standard order, once Pearl is in the position to deliver such volume. To meet the demand for volume, Pearl would be processing ~1,000 tonnes/month. Also, two more TDUs (tyre processing units) (total 4) will be required at the company’s existing facility in Stapylton, Queensland. Fund for these two TDUs will be available by capital raising strategy of $5 million, which is currently being undertaken by Pearl.

As per the announcement made on ASX as on 13th March 2019, the company had entered into a placement agreement with ROC to subscribe for $5 million worth of fully paid ordinary shares in Pearl at 12.7 cents/sh, together with 1 free attaching unlisted option for every 2 shares subscribed by the investor.

The company also informed the market that it has completed the first commercial sales of carbon char, which will be used as a sustainable replacement in a chemical bonding process. Though tonnages required are small to start, the demand for the char has been requested at 50 tonnes/month, based on successful completion of the delivery and use of our first commercial sales. Tyre Stewardship of Australia (TSA) recently audited its Stapylton, Queensland facility and has extended PG1’s accreditation status in respect of its unique tyre recycling process.

Pearl’s operations at Stapylton were successfully ramped up in March 2019. Total processed tyres came in at 355 tonnes in March Quarter as compared to 118 tonnes in the previous quarter. Tyre processing revenue and sales of the products helped the company to achieve a doubling of receipts from its customers. At market close on 1st May 2019, the stock of PG1 was trading at a price of $0.130, with a market cap of $20.2 million.


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