Algae to biofuel co seeks to raise up to $30m

A company which is developing technology at the top of the South Island to turn algae into biofuel is looking to raise up to $30 million through a public share offer.

Aquaflow Bionomic Corporation said it was offering up to 60m new shares at 50c each. It was seeking to raise $20m but reserved the right to accept over-subscriptions of up to $10m.

The capital raised would be used to continue the research and development of technology to convert algae to biofuels and to various biochemicals, to remediate water systems, and to develop those technologies into commercial ventures, Aquaflow said.

The Aquaflow process for creating biocrude had three major components. They were harvesting of algae from the wastewater stream, conversion of the algae to a biocrude, and the production of remediated or clean water.

Aquaflow said it had developed and was operating a commercial scale prototype harvesting plant on a wastewater plant in Blenheim, and was continuing pilot plant-scale testing of an algae conversion plant in Nelson.

The first stage of conversion development was a proof of concept, trial and development tool and operation plant capable of handling from two to 60 litres an hour of feedstock material, Aquaflow said.

Initial trials had been conducted and work continued on establishing a robust continuous operation.

In the past 18 months it had made considerable progress in developing the technology for the harvesting and conversion of wild microalgae into biocrude.

Aquaflow had been acutely aware that the energy balance in that technology needed to be positive in order for the process to be economic.

"It is too early in Aquaflow's research and development to determine if that has been achieved sufficiently, although we are encouraged by our ability to produce biocrude from harvested algae," Aquaflow said.

The company had achieved a major milestone of being able to harvest tonnes of wild microalgae.

It was now working on conversion processes which should give an increasingly better energy balance, while continuing to develop lower cost harvesting technologies.

A great deal of research and development still had to be done, and it was anticipated that would continue to be Aquaflow's major activity for the remainder of 2008 and 2009.

"The company hopes to be able to generate income from the production or sale of its technology in the future, however it is not clear at this stage when revenue streams will produce positive net cash," Aquaflow said.

It intended to have significantly expanded within the next two to four years.