Green Monthly - September 2024
Market commentary, updates to the paid service, and more.
Portfolio Updates
Abaxx Technologies: The company recently onboarded ADM Investor Services Singapore as a futures commission merchant (FCM), a subsidiary of Archer Daniels Midland. This should help boost liquidity on the exchange. We’re still awaiting the onboarding of Mizuho. They’re one of the largest financiers in the LNG space, so this will be significant when it finally happens. Abaxx anticipates that they can both onboard Mizuho and launch several additional futures contracts “in the fall.” This likely includes the gold pool and nickel futures contract, if not lithium, as well. Ramping up the exchange to financial breakeven will likely take at least a few quarters, but progress is being made.
Aduro Clean Technologies: The company is currently conducting “semi-industrial scale experiments” to finalize reactor configurations for a multi-ton per day plastic recycling unit. Aduro aims to complete the design specifications by the end of this year. Initial engagements with design, engineering, and fabrication firms have commenced. Otherwise, the company is continuing to test its recycling technology through a customer engagement program that includes six multi-billion dollar companies involving names like TotalEnergies and Shell.
Base Carbon: Not much to say for Base in terms of news. The company continues to buy back shares through its NCIB. They’re always looking for new projects, particularly in nature-based methodologies. Talks with STX Group for establishing a fund for investing in carbon projects are ongoing. It seems like it could just take a long time for the company to receive a fair valuation as sentiment around the carbon markets is in the gutter.
It’s worth noting that we could see decisions made about Verra being accepted to CORSIA and/or whether the cookstove project methodology will be given ICVCM’s CCP-approved label:
This is important for Base because being approved or denied for these programs can significantly affect the price at which Base’s credits could be sold. Especially CORSIA, as that program is expected to be a notable demand driver for the carbon credits accepted for use by the airlines.
Watch List
CleanCore Solutions (ZONE) - After reviewing their recently released 10-K, I see some positive and negative trends:
Their top-line generally looks positive: Revenue shrunk, but gross margins increased substantially (from 30% to 50%) as they swapped to a direct sales model instead of going through distributors. They announced various pilot programs that were going well with some interesting clients after the quarter end (June), so I want to see where the numbers shake out over the next 1-2 quarters. CleanCore also projects they’ll become cash flow positive within the next year. If management proves they can execute, things could get interesting.
On the flip side, the balance sheet isn’t looking so good: They had $2M in cash and $1.5M in current liabilities at the end of June. Burning around $600k per quarter doesn’t leave them with much wiggle room at this point. With a collapsing stock price, it could be challenging for them to raise money without significant dilution.
Investing in ZONE will likely depend on how the trend to ban PFAS chemicals progresses in North America and Europe.
Zefiro Methane (ZEFI) - Waiting for results from the U.S. election to reassess. Funding from the Inflation Reduction Act will significantly affect its growth prospects.
Existing Stock List Additions
Added Midori Carbon (MIDO.CN) to Carbon Credit Stocks
Added Pacific Green Technologies (PGTK) to Energy Efficiency Stocks
Note: I’m not advocating for any stock by adding it to a stock list. Assume the only stocks I own myself or have vetted are listed in my portfolio or watch list. Always do your own research before making any investment decisions. My content should not be considered financial advice.