VIDEO: Pond Technologies Holdings Inc Grows Algae that Eat-up Pollution

MidasLetter Live
|

Pond Technologies Holdings Inc (CVE:POND) (OTCMKTS:IOGID) CEO Steven Martin talks about the company’s proprietary technology where they grow algae to feed on toxins such as gas emissions from smoke stacks. Toxic emissions for humans are actually food for the algae. Once consumed the emissions actually become green, and make profits for the company. They have an agreement with Stelco (TSE:STLC) (OTCMKTS:STZHF) to consume approximately 5000 tonnes of CO2 per year.

TRANSCRIPT:

James West:    Steve, thanks for joining me today.

Steven Martin: Thanks for having me.

James West:    Steve, let’s start with an overview: what is Pond Technologies, and what does it do?

Steven Martin: Pond Technologies is an algae company. We grow algae off untreated stack gas emissions from any of the large-file emitters you can imagine. We can grow algae off the gases that come out of a cement plant, a steel plant, and in fact, even small combined heat and power plants.

James West:    And how do you do that?

Steven Martin: We essentially pipe the emissions into large barrel reactors that are proprietary – they’re our design and covered by our patents. We deliver the appropriate growing conditions, which includes light, carbon dioxide obviously that comes from the stack gas submissions, micronutrients, and also include harvest. Basically the upshot is that it’s a turnkey system that turns the nasty, noxious emissions into something that’s literally green and edible.

James West:    And edible. So is this a carbon sequestration play, or is this a biofuel play, or is it both?

Steven Martin: It’s that and others. It’s not sequestration per se, it’s carbon utilization. Sequestration is more of a ‘let’s kind of hide it and hope it doesn’t come back to bite you’. In the case of what we do, the algae actually need carbon dioxide as its food. They eat it, and it’s not just biofuels, but there are other products that come out the other end of it that are far more valuable, even, than the biofuels. We can do soil amendment, so if you’re working on the oilsands and you have to put the site back to the way it was before, you need an organic phase to add to the soil; the algae is perfect for that.

Biofoams, folks are interested in adding algae to polymers to make sneakers, if you can believe such a thing. It’s also extraordinarily edible, by us, by fish and by animals, and there’s a huge dearth of animal and aquaculture feeds, and algae plays right into that. So turn the emissions from a smokestack into something that can help feed people.

James West:    Okay. So how do you mitigate toxins like sulphur and the nitrogen that would be present, or nitrous oxide or nox particles in the algae? Or is that what they do, is convert that into proteins and minerals?

Steven Martin: Yeah, you’ve gotten right to it: that’s exactly what they do. They need a certain amount of sulphur, and the oxides of nitrogen are not a contaminant to them; it’s their food. You and I would not be able to survive on the emissions from a smokestack; if we were to breathe that for some protracted period of time, it wouldn’t be good.

James West:    Well, I could.

Steven Martin: Well, you know, it depends on what your history is.

James West:    Right.

Steven Martin: I, my body is my temple, so it would be harder on me. But the algae love it. So from the point of view of the algae, all of these are nutrients. The only thing that you might have a concern is things like heavy metals, but we’re already not allowing people to emit those up stacks, and in fact, the algae that we grow has less of those in it than fish you would take out of the ocean, so it’s actually safer than…which is surprising, and tells you a little bit about the state of the ocean.

James West:    Sure. So tell me about the revenue model.

Steven Martin: Well, the stuff that comes out, the algae has a sort of minimum floor level value of around $2,000 per tonne, and it can go up over hundreds of thousands of dollars per tonne depending on which algae strain and for what use you’re growing it. It takes about two tonnes of carbon dioxide to grow a tonne of algae, so we’re consuming two tonnes of carbon dioxide, we end up with a tonne of algae for our product, and at the low end, that algae product is worth $2,000 a tonne; at the high end, $600,000 a tonne.

James West:    So I’m just taking a wild leap of faith here and assuming the stack gases are free?

Steven Martin: Well, I mean, even if they’re not, but yes, we do provide a carbon credit, so for each tonne of algae that we create, we consume two tonnes of CO2 from, potentially, your smoke stack. So if you’re making cement, you’re making the greenest cement on earth now.

James West:    Okay. And is that your target audience in terms of clientele, is high volume emitters of toxic and noxious gases?

Steven Martin: I think all large-file emitters are our target audience. We do need a certain amount of carbon dioxide in order to make a viable economic – there is a capital expense associated with it, so we’ve targeted 10,000-plus large file emitters in North America, each emitting 25,000 tonnes of CO2 or more per year. So they would be our target audience.

James West:    And at this point, can you assign a dollar CapEx and OpEx per tonne of carbon removed from the gas stream, relative to, and then relate it to the value of the produced algae?

Steven Martin: Yeah. You can look at it that way. The easier way to look at it is, this is a profitable way to consume carbon dioxide and make a product. We make more than we cost.

James West:    That’s simple.

Steven Martin: We are a pollution control technology, and I think the only one, that is a profit centre.

James West:    Okay. So what does your revenue picture look like at this point going out 12 months, 24 months?

Steven Martin: We have just completed our initial, our reverse takeover event; in fact, this morning, I pushed the buzzer on the TSX. We will be building our first commercial scale plant at Stelco, which is a large greenhouse gas emitter, as people are aware. And Stelco is very committed to the environment, so we’ll be doing some mitigation work with them, and consuming something on the order of 5,000 tonnes per year of CO2.

The other side of our business involves these sort of higher-value products with smaller emitters, and we’re doing work with Markham District Energy as well, building a smaller plant where we’ll be producing hundreds of tonnes of nutraceutical-grade algae per year.

James West:    Hmm. So what percentage of GHG gas is being emitted annually? Would this be applicable towards as a mitigating influence?

Steven Martin: Really, it sounds very grandiose, but kind of all of it. You need to have enough – I mentioned 25,000 tonnes – you wouldn’t make sense for me to put an algae plant, say, on your house, for your furnace. But on anything bigger than about 25,000 tonnes per year, it starts to make really strong economic sense, and in some respects, we actually make more money than the host plant. Our product is more valuable. We take what is a waste product, your carbon dioxide, which you value as a negative; let’s say we’re valuing it at $15 per tonne as a carbon cost, we’re taking two tonnes of that and turning it into something worth $2,000-plus per tonne. So it’s almost like we’re tipping fee driven. So there’s a huge opportunity for us, and if we were starting an algae company absent carbon dioxide concerns or emissions concerns, we would actually have to go out in search of enough carbon dioxide to do it. Because again, they consume a lot of it.

James West:    So the other question on the other side of that equation, I guess, is how much algae product that you produce could the world absorb in terms of the demand?

Steven Martin: A lot. Aquaculture is growing 7, 8, 9, 10 percent per year, and they are almost entirely reliant for their protein content on fish meal derived from stocks of bait fish basically in the ocean – anchoveta, off the coast of South America. As you can imagine, every year we have less of a catch of those, and every year we have more of a demand. The two lines are diverging, and they’re diverging pretty seriously. We can’t substitute other sources of protein, like soy and corn, because fish are not supposed to be eating soy and corn. You can do it to an extent, but you still need to have something that mimics the amino acid profile, the protein profile, of fish meal – and algae is a one to one substitute. So right off the top, there’s millions of tonnes of capacity to absorb within the fish meal market alone.

You get into terrestrial animals, agriculture production, soil amendment, I would say billions of tonnes are required.

James West:    Wow. So this also adds to the sort of rejuvenation of fish stocks, totally.

Steven Martin: It does.

James West:    Fascinating. Okay, so then, what would you categorize as the size of the whole global market for your algae products?

Steven Martin: Difficult for me to say; it’s more than I can put – it’s too many zeroes for me to look at. I think we’ll not be constrained by markets to absorb our product, because of the myriad of uses. Making biofoams alone is probably more capacity than our first plant at Stelco will be able to manage, just for biofoams to make sneakers that are green.

James West:    Interesting. That’s a great introduction there; we’re going to leave it for now, Steven, we’ll come back to you in a couple of quarters and see how you’re making out. Thanks for your time today.

Steven Martin: Perfect. Thank you very much for having me.

 

MidasLetter Live

Midas Letter LIVE!

Midas Letter LIVE is the video channel from Midas Letter Financial Group's headquarters studio in the Exchange Tower in the heart of Canada's Financial District in downtown Toronto, Ontario, where we interview the CEO's from the top emerging companies on the Canadian publicly traded company landscape. Live Streaming on Facebook...
More Info...

[email protected]

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

Free Newsletter,
Priceless Content.

Be the first to hear from Midas Letter on all things Cannabis.