Clean Coal is ADA’s joint venture with an affiliate of NexGen Resources Corporation and an affiliate of The Goldman Sachs Group.
Clean Coal will be able to provide customers with both the patent-pending M45 technology and ADA’s patented CyClean technology to produce refined coal (RC) with this license.
The refined coal reduces emissions of NOx and mercury.
The expected license, provides ADA with a royalty based on a percent of operating income from future production of RC produced with the M45 technology.
In addition, it will provide prepaid royalties that include an initial refundable payment of $2m paid to ADA upon signing of the term sheet with additional refundable payments of up to $8m.
ADA expects Clean Coal to finance the fabrication and installation of up to six M45 facilities, which will be placed in service by the year end.
The systems will have the potential of producing a total of as much as $20m in net operating income annually for ADA from the M45 activities for the period of the tax credits.
Clean Coal has installed and operated 10 CyClean systems at utility sites and is working to install and operate up to an additional ten RC systems by year-end, for a total of 20 systems installed in 2011.
Construction and installation of the new RC facilities is financed by $15m bank credit and $8m secured in deposits to secure participation in the facilities.
