Biogas float to test market

Timah Resources is seeking to raise up to $1 million to transition to the ASX, as part of a modest $3 million capital raising that includes a $2 million placement as part of its acquisition of Mistral Engineering.Timah, which was originally established in 2007 to take advantage of the Vietnamese property market, and which has since dabbled in metals exploration, has agreed to purchase 100% of Mistral, which has an operating three megawatt biogas power plant located adjacent to a palm oil mill owned by Malaysia’s Prolific Yield in Sabah state. Mistral is owned by Cash Nexus, a wholly-owned subsidiary of Cepatwawasan Group Berhad, a company listed on the Bursa Malaysia.Cash Nexus, which will emerge with about 60% of Timah if the listing is successful, will be issued an initial 85.5 million shares for the purchase.The plant generates electricity by utilising methane gas generated from a by-product of palm oil production called palm oil mill effluent, a material that cannot legally be discharged directly into watercourses due to its high solids concentration and acidity.It is standard palm oil industry practice to treat the effluent in open anaerobic ponds, but that process releases significant quantities of harmful methane gas directly into the atmosphere.Mistral instead takes the POME into a closed anaerobic system that captures all of the methane in a form that can then be utilised as fuel by the plant. The scheme is backed by renewable energy initiatives from the Malaysian government, which aims to achieve the installation of biogas facilities in all palm oil mills in Malaysia by 2020.Malaysia’s renewable energy target of 985 MW by 2015 will contributing just 5.5% of Malaysia’s total electricity generation mix.Timah’s plant is being upgraded to 3.5MW at a cost of $6.7 million, although additional design work is yet to be completed as a result of an earthquake that hit the Sabah region of Malaysia that has lead the company to review and improve its design.The plant works are expected to start in mid-2016.The raising is expected to be complete by August 28.

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