Glycerol Recycling Reduces Cellulosic Sugar Cost to $47/tonne

23rd June 2015, Australian Securities Exchange Announcement

Highlights

• Leaf Resources’ cost of producing cellulosic sugars is now $47/tonne.
• New glycerol recycling process recovers 95% of the glycerol used with higher purity and higher value.
• This low cost opens up markets for GlycellTM sugars as a cheap, clean feedstock for bio-based products, replacing:
  -Sugars derived from grain and
  -Raw sugar
• Cellulosic sugars at $47/tonne significantly increase the number of bio-based products that can economically replace petroleum derived products

Leaf Resources is pleased to announce that its GlycellTM process can now achieve a minimum sugar-selling price (MSSP) of $471 per tonne for a plant of 210,000 bone dry tonnes per annum. By way of comparison the market price for raw cane sugar is currently around $280 per tonne.

On May 6th we announced a cost of $151/tonne for GlycellTM sugars produced from a larger plant (based on the assumptions used by the NREL, National Renewable Energy Laboratory of the USA). Our main competition in pretreatment processes, dilute acid, had a cost of 363/tonne2under the same NREL assumptions.

The cost reduction announced today has come about because we have now shown that we can recover 95% of the glycerol input into the GlycellTM process at a higher purity than that input. Higher purity glycerol has a higher value so, in effect, glycerol now becomes an additional co-product delivering a fourth revenue stream to our process (the others being cellulose, hemicellulose and lignin). This significantly improves the commercial viability of GlycellTM cellulosic sugars as a feedstock for bio-based products.

We have again used ResourceInvest Pty Ltd to undertake an analysis of the benefit of this result on the minimum sugar-selling price (MSSP) of the cellulosic sugars produced by the GlycellTM process. We decided to use a smaller scale plant to reflect potential uses of the GlycellTM process in the renewable chemicals markets. ResourceInvest calculated that GlycellTM process produces cellulosic sugars at a MSSP of $47 per tonne on a fully costed basis (i.e. after capital and a return on capital).

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