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Executive Business Plan
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Table o Contents
Mantra Venture Group..............................................................................................................................4Corporate Prole ........................................................................................................................................51. Eecutive Summar ..............................................................................................................................52. Business Strateg ...................................................................................................................................7
2.1 Mission Statement .................... .................... .................... ................... .................... .................... 72.2 Objectives .......................................................................................................................................72.3 Business Model ................. .................... .................... .................... ................... .................... .......... 8
3. Management Team and Advisors ....................................................................................................94. Business Partnersips .................... ................... .................... .................... ................... .................... ..125. Strategic Business Units ....................................................................................................................136. Financial Plan .................. .................... ................... .................... .................... ................... ...................14
6.1 Capital Requirement ................... .................... .................... ................... .................... ...............146.2 Perorma Financial Statements ................... ................... .................... .................... ...............156.3 Return on Investment ................. .................... .................... ................... .................... ...............16
7. Action Plan .................... ................... .................... .................... ................... .................... ................... ...17
Mantra Energ Alternatives Ltd...........................................................................................................191. Summar ................. .................... ................... .................... .................... ................... .................... .........19
2. Electroreduction o Carbon Dioide (ERC) ................... ................... .................... .................... ..202.1 Te Need ................... .................... ................... .................... .................... ................... ...................202.2 Tecnolog....................................................................................................................................212.3 Carbon Balance ................... .................... .................... ................... .................... .................... .....222.4 Maret ............................................................................................................................................24
2.4.1 Target Maret.........................................................................................................................252.4.2 Competition ..........................................................................................................................292.4.3 Competitive Advantage ................... .................... ................... .................... ................... ...302.4.4 SWOT Analsis .................. .................... .................... ................... .................... ................... ...31
2.5 Development Plan .................... ................... .................... .................... ................... ...................32
2.5.1 Capitaliing on ERC .................. .................... ................... .................... .................... ............332.6 Financial Plan .................... ................... .................... .................... .................... ................... .........362.6.1 Fiscal Requirement ................... .................... ................... .................... .................... ............362.6.2 Return On Investment ................... ................... .................... .................... ................... ......36
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3. Mied Reactant Fuel Cell (MRFC) ................. .................... .................... ................... .................... ..373.1 Te Need ................... .................... .................... ................... .................... .................... ..................373.2 Te Tecnolog ................... .................... .................... ................... .................... .................... .....383.3 Maret ................. .................... .................... .................... ................... .................... .................... .....39
3.3.1 Target Maret.........................................................................................................................403.3.2 Competition ................... .................... .................... ................... .................... .................... .....403.3.3 Competitive Advantages...................................................................................................44
3.3.4 SWOT Analsis ................... ................... .................... ................... .................... .................... ..443.4 Development Plan .................... ................... .................... .................... .................... ..................45
3.4.1 Capitaliing on MRFC .................. ................... .................... .................... ................... .........453.5 Financial Plan .................... .................... .................... ................... .................... .................... ........46
3.5.1 Fiscal Requirement ................... .................... .................... ................... .................... ............463.5.2 Return On Investment ................... .................... ................... .................... .................... .....46
4. Summar .................................................................................................................................................46
Reerences...................................................................................................................................................47Appendices.................................................................................................................................................48
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Mantra Venture Group Eecutive Business Plan
Mantra Venture Group
Tis business plan inormational pacage contains condential and proprietar inormationconcerning Mantra Venture Group Ltd. (MANTRA) and its subsidiaries. Tis pacage does notconstitute an oer to sell or a solicitation o an oer to bu. It is being presented to a limited numbero individuals or inormational use onl. Te inormation in tis pacage was obtained rom teprinciples o MANTRA and oter sources, but no assurances can be given as to te accurac orcompleteness o suc inormation. B acceptance o tis pacage in ard cop or electronicall,te recipient agrees not to reproduce, distribute, or circulate tis pacage, and not to divulge oroterwise disseminate te inormation contained erein to an oter person witout te epresswritten consent o MANTRA.
ThIS BUSINESS PLAN CONTAINS CERTAIN FORWARD LOOkING STATEMENTS BASED ONESTIMATES AND ASSUMPTIONS MADE By ThE COMPANy, WhICh, ALThOUGh BELIEVED TO BEREASONABLE, ARE BASED ON INFORMATION COMPILED AND RECEIVED FROM ThIRD PARTIESAND INhERENTLy UNCERTAIN. ThEREFORE, EACh RECIPIENT OF ThIS BUSINESS PLAN ShOULDNOT PLACE UNDUE RELIANCE UPON ThE STATEMENTS IN ThIS BUSINESS PLAN AND RECOGNIzE
ThAT ThE STATEMENTS CONTAINED hEREIN ARE ONLy BASED ON ExPECTATION; NO ASSURANCECAN BE GIVEN ThAT ANy OF SUCh ExPECTATIONS WILL BE REALIzED AND IT IS LIkELy ThEACTUAL RESULTS OF ThE IMPLEMENTATION OF ThE COMPANyS BUSINESS PLAN WILL DIFFERMATERIALLy FROM ThOSE CONTEMPLATED hEREIN. WIThOUT LIMITING ThE FOREGOING,
ThE WORDS, BELIEVES, ANTICIPATES, PROPOSES, PLANS, ExPECTS, INTENDS, MAy ANDSIMILAR ExPRESSIONS ARE INTENDED TO IDENTIFy FORWARD-LOOkING STATEMENTS. SUChSTATEMENTS INVOLVE kNOWN AND UNkNOWN RISkS, UNCERTAINTIES, AND OThER FACTORS
ThAT MAy CAUSE ACTUAL RESULTS, PERFORMANCE OR AChIEVEMENTS OF ThE COMPANy TOBE MATERIALLy DIFFERENT FROM ANy FUTURE RESULTS, PERFORMANCE OR AChIEVEMENTS
ExPRESSED OR IMPLIED By SUCh FORWARD-LOOkING STATEMENTS.
Startup companies are inerentl ris. All statements made about te compan are orward looing.Total elimination o ris rom tis project is impossible. Te tree main categories o ris to wic tecompan and its project are eposed are regulator, nancial, and operational.
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Mantra Venture Group Eecutive Business Plan
Corporate Prole
Mantra Venture Group Ltd. (Mantra) is a diversied Green Tec compan seeing to become aworldleader in te development o commerciall viable sustainable tecnologies. B acquiringte most promising tecnologies rom universities, laboratories and companies and bringing temtroug to commercialiation, Mantra will create signicant sareolder value troug subsequentacquisitions, spinouts and licensing ees.
Mantra was incorporated in Januar 2007, and began trading on te NASD OTCBB in December o2007 under te trading smbol MVTG.OB. As o Sept 2nd, 2009, tere were 30,793,122 sares issuedand outstanding, wit a public oat o 8,809,233. Te compan is also traded on te Franurt StocEcange under te trading smbol: 5MV.
1. Eecutive Summar
Te world is rapidl canging beore our ees. Global ossil uel reserves are astil dissipating,average temperatures are increasing, and our most vital natural resource, water, continues to beabused and polluted b inefcient and unnecessar uman beavior. It is tereore no surprisetat environmental tecnologies or Green Tecs are te most popular and sougtaterinvestments as seen b Venture Capitalists toda. Despite te struggling global econom, tesustainabilit industr continues to epand at an alarming rate a trend tat will onl strengten
in te ears to come.Establised in Januar 2007, Mantra Venture Group Ltd. as set out to become a world leaderin acquiring and commercialiing breatroug green tecnologies tat are unique, practicaland sow unlimited maret potential. Based in te Pacic Nortwest, a otbed o Green Tec innovation, Mantras e advantage lies in its tigtl nit relationsips wit universities,laboratories and companies oering Mantra rstmover access to te most promisingtecnologies available.
Mantras business model consists o an aggressive 10step growt strateg tat begins witan environmental assessment o current and uture trends, ollowed b te identication o auture need and an analsis o te political environment surrounding tat need. Mantra tenleverages its everepanding networ o industr partners to locate, evaluate and acquire te
tecnolog best suited to meet te need. Mantra transers an associated intellectual propertto one o its strategic business units (current business units include: Mantra Energ AlternativesLtd., Mantra Water and Mantra Media), and ten injects capital into te project to incubate andoptimie te tecnolog in collaboration wit kemetco Researc Inc. Once development iscomplete, te tecnolog is entered into te international maretplace via one o two alternatestrategies: licensing agreements wit industrleading organiations or a spinout o te entirebusiness unit.
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Current areas o interest or Mantra include: te reduction/reccling o carbon dioide andalternative energ. As a result, Mantra as positioned itsel to become a leader in eac o tesesegments troug a vested interest in two core tecnologies: te Electroreduction o Carbon
Dioide (ERC) and te Mied Reactant Fuel Cell (MRFC).
Electroreduction of Carbon Dioxide (ERC): A CO2 reccling tecnolog tat converts CO2 intoigl sougt ater materials, suc as: ormic acid, ormate salts, oalic acid and metanol. Tere arecurrentl 27 Billion metric tonnes o CO2 emitted annuall rom ossil uel combustion, and ormicacid, one o ERCs e end products as a current maret value o $1,440/tonne.
Mixed Reactant Fuel Cell (MRFC): An innovative uel cell tecnolog beneting rom a simpliedstructure in an eort to greatl reduce manuacturing costs and improve durabilit, tus deeatingte two main barriers to entr or uel cells toda. Te uel cell industr is epected to generate moretan $18.6 Billion USD in 2013, and i signicant advancements are made in te automotive sector,tis number could jump as ig as $35 Billion USD.
Over te net two ears, Mantra plans to aggressivel develop eac o te aorementionedtecnologies. Mantra Energ Alternatives Ltd. will be building an onsite ERC demonstration unitcapable o converting 100 500 g o CO2 per da, as well as an MRFC precommercial prototpe.
Te costs o tese two projects will be $2.18 Million CDN and $0.98 Million CDN, respectivel or atotal development cost o 3.16 Million.
To nance te aorementioned operations, Mantra is currentl seeing a total cas injection o 5.0Million over a twoear period. Proceeds will be used to develop te two tecnologies currentl inits portolio, all associated overead costs, and researc and analsis o new tecnologies.
Upon completion o te development projects, Mantra will begin generating revenue in licensingits ERC tecnolog, and it will be read or te development o a commercial scale MRFC prototpe.Mantra anticipates annual revenues o $63.8 Million CDN b 2017.
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2. Business Strateg
2.1 Mission Statement
Mantras corporate mission is to provide
businesses and people wit te means to
acieve signicant, sustainable reductions
in teir ecological ootprint, and in doing so,ensure tat investors benet bot morall and
nanciall rom teir investment.
2.2 Objectives
Te objectives o Mantra Venture Group are:
Prot1. To generate sufcient prot to satis sareolders and to provide te
resources needed to acieve te broader objectives o te compan and its
sareolders.
Growt2. To grow te business at a rate tat is callenging, rewarding, et
manageable.
Communit Leadersip3. To be an intellectual and social asset to te communit
and to acilitate benecial cange in liestles b consumers, business and industr
troug advancements in green tecnologies.
Sareolder Value4. To elp te individual sareolder grow b coosing a
baset o suitable green opportunities a portolio tat is well researced anddiversied.
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2.3 Business Model
Mantras aggressive 10step growt strateg, as outlined below, will see te compan create asignicant return on investment or investors b becoming a e contributor to te global eortor environmental sustainabilit.
Environmental Assessment:1. Observe currentand uture trends in global environment,including: climate cange, energ use,pollution and natural resources.Identi Future Need:2. Recognieenvironmental trends o greatest concerntat lac tecnical solutions.Understand Regulator Framewor3.Surrounding Need: Investigate regulatorenvironment and political barriers aectingentr into identied maret.Locate and Evaluate Tecnologies4.Surrounding Need: Analse tecnologiesavailable witin Mantras everepandingnetwor o Universities, laboratories andcompanies to select te tecnolog bestsuited to meet te identied need.Acquire Tecnolog:5. Eiter license orpurcase IP rom Universit, laboratoror Compan and transer tecnolog toappropriate strategic business unit.Set SMART Goals:6. Set specic, measurable,attainable, realistic and timel goals,and establis perormance parameterssurrounding goals.Investment:7. Inject capital into project.Investment can consist o one or more ote ollowing: internal nancing, venturecapital unds, institutional unds, grantunding, or partnersips.*Inrastructure, Incubation and Innovation8. :
Tecnolog undergoes asttracdevelopment at laborator in Ricmond,
B.C., as management simultaneouslestablises a ormal corporate inrastructure.ke personnel rom original acilit(including inventor(s)) maintain an active
advisor role in te urter developmento te tecnolog. Management ensurestecnolog is optimied to best suitintended application(s) troug a treestage development plan (probationar,intermediate and nal).**Maret Acceptance and Adoption:9. Entranceo tecnolog into local, national andinternational maretplace.
Licensing Agreements or Spino o10. Business Unit: Revenue generation trouglicensing agreements wit industrleadingorganiations or spino o business unit.
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*Note: Man Green Tec projects require a massive initial investment; it would not be viable or Mantra to undertae one o tesemajor projects independentl. Tereore, its strateg is to eiter i) approac te project b means o partnersip or joint venture wita larger organiation or government bod, or ii) searc or ancillar or supporting products and tecnologies tat will contributeto muc larger projects and wic will succeed as te larger projects proceed. In tis wa Mantra will tap into worldwide marets,even i it is not directl responsible or te entiret o te larger project.
**Note: Perormance parameters as set in Stage 6 must be successull acieved during te probationar portion o tis stage, ortecnologies are terminated (onl tecnologies sowing etraordinar revenue and commercial potential are continued ater teprobationar period).
3. Management Team and Advisors
Larry KristofPresident, C.E.O.
John RussellV.P. Technology
Evaluation
Shawn KimV.P. International
Business Development
Con BuckleyC.F.O.
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Larry KristofPresident, Cie Eecutive Ofcer
Larr kristo as over 15ears eperience in businessdevelopment and corporateleadersip. In 2003, Mr. kristocoounded Leington Energ a compan engaged in
manuacturing and leasing oileld service
equipment to oil and gas, and oter oil eldservice companies. Under Mr. kristos direction,Leington introduced te rst nitrogenondemand sstem to Alberta oil marets. Te tecnolog represented a signicantadvancement in te application o nitrogentecnolog, wit purication capabilities o9899.5%. Leington later became te rstmanuacturer o drilling sstems specicalldesigned or oil sands eploration coringTroug te successul introduction o tesetecnologies, te compan transitioned romconcept troug to a revenue generating
compan wit assets o over $7 Million duringkristo s time wit te compan. .
Ater recording corporate revenues o $2Million in te rst two quarters o 2007, Mr.kristo resigned rom Leington Energ toocus ulltime on te Green Tec sector asPresident and CEO o Mantra Venture GroupLtd. a compan in wic e ounded earliertat ear.
Con BuckleyCie Financial Ofcer
Con Bucle graduated rom teUniversit o Britis Columbiawit a bacelor o Commerce
degree specialiing in nance. Mr. Buclebecame a member o te Institute oCartered Accountants o Britis Columbia
in 1974, and was a ounding partner o teVancouver accounting rm o Bucle Doddsand Associates. Mr. Bucle as over 20 earseperience in nancing public and privatecompanies including Government grants orscientic researc projects, and oil and gasoperations, and bot conventional and private
debt equit nancing or public companies.Mr. Bucle also as considerable eperiencein setting up internal control sstems orclients, and advising companies on mandealings wit bot te BC Securities EcangeCommission and te SEC.
John P. RussellVicePresident o Tecnolog Evaluation
Mr. Russell as over 30 earseperience in te identication,evaluation and mareting o
tecnolog; e as autoreda capter o a boo on sonicenerg applications (Elsevier), several scienticpublications, and as given conerencepresentations on new tecnologies. he wasVicePresident o Tecnolog wit ARC SonicsInc., a specialt engineering rm. he olds aBacelor o Arts degree rom te Universit oBritis Columbia.
As VicePresident o Tecnolog Evaluation,Cair o te Science Advisor Board and aDirector, Mr. Russell draws upon is nowledge
and eperience to identi, evaluate and selectte most promising tecnologies witintose industr sectors targeted b Mantra. hisinnovative air lies in nding and describingapplications or new, promising tecnologiestat are oten less tan transparent. hecontributes as a team member to te ongoingdevelopment o business strateg.
Management
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Shawn KimVicePresident o International BusinessDevelopment
Mr. kim as nine ears eperiencein te nancial industr were estarted as a business analst. Aterdedicating 3 ears to MacenieFinancial Corporation in Toronto,e moved to AIG in korea were
e successull implemented a worldwidemareting model and secured new businessalliances. In is most recent role, Mr. kimserved as an International Business Consultantwit te District o Nort Vancouver. Mr. kimgraduated rom te Universit o WesternOntario in 1996 wit a BA in Administrativeand Commercial Studies.
Jae Choon RyuVice President o Corporate Finance (korea)
Mr. Ru began is career at korea Investment& Securities Co., Ltd. were e started as ananalst and was later promoted to te seniormanagement position were e managedprivate investor accounts. Ater dedicating 14ears to korea Investment & Securities Co., Ltd.
Mr. Ru moved to korea Prudential InvestmentSecurities Co., Ltd in te branc managementcapacit were e nanced over $23 millionUSD to various korean companies. Mr. Ru asalso been involved in listing alternative energcompanies on te korean Stoc Ecange.
Advisors
Professor Colin OlomanP.Eng, Scientic Advisor Board Member andConsulting Scientist
Pro. Emeritus Colin Oloman is a graduateo te Universities o Sdne and BritisColumbia and as been engaged in te eldo cemical engineering or 40 ears, bot inacademia and industr. As a acult member
Management
in te Department o Cemical and BiologicalEngineering at te Universit o BritisColumbia, rom wic e retired in 2004, Pro.Oloman taugt a range o undergraduate andgraduate courses in cemical and biologicalengineering. he is a proessional engineer anda member o te Cemical Institute o Canadaand te Electrocemical Societ.
Pro Oloman as acieved man notablemilestones trougout is career, including:designing, engineering, installing andoperating Canadas rst pilot plant orscrubbing drogen sulpide rom pulp millrecover urnace ue gas (19651967); coinventing te ElectroLuber sstem andtaing it rom conception in 1976 to startup in1982 (ttp://www.atselectrolube.com/inde.pp); and designing, engineering, installingand operating a 1000 Amp (20 W), 10 cellperorated bipole electrocemical reactor orproduction o alaline peroide (1984). healso sared te responsibilit or te design,engineering, startup and operation o twoe projects: Australias rst installation ooil, coal and ogen injection to an iron blasturnace (19621964), and a pilot plant or teelectrosntesis o tetradroantraquinone
(198385).Pro. Oloman as acted as a consultant inte researc and development o variouselectrocemical processes, including: teelectrosntesis o sodium clorite, electrocoagulation or purication o bilge waters,electrosntesis o drogen peroide. heas autored or coautored tree boos(Ols Notes on Material and Energ Balances,Electrocemical Processing or te Pulp andPaper Industr, and te handboo o Fuel CellModeling) and as autored or coautored
over 45 proprietar reports and publicationsin tecnical journals. he is te inventor or coinventor o some twent US and internationalpatents, including MRFC (inventor) and ERC(coinventor). Pro. Emeritus Oloman asbeen a member o Mantras Scientic AdvisorBoard since November 2, 2007.
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4. Business Partnersips
Kemetco Research Inc. (www.kemetco.com)
kemetco Researc Inc. (kemetco) is a privatesector integrated science, tecnolog andinnovation compan wit more tan 15engineers currentl on sta. Its contractsciences operation provides laborator analsisand testing, eldwor, benc scale studies,pilot plant investigations, consulting services,
and applied researc and development or bot industr and government. kemetco provides
scientic epertise in te elds o Specialt Analtical Cemistr, Cemical Process and EtractiveMetallurg.
Mantras partnersip wit kemetco is one o te e components in te successul eecution oits corporate business model. Mantra and kemetco establised a collaborative researc acilitin Ricmond, BC in 2007, and all tecnologies acquired b Mantra are later transerred to tisacilit or epedited development. kemetco sares a signicant responsibilit in te tecnicaldevelopment o Mantras projects, and te compan as plaed a pivotal role in advancing botERC and BRS tecnologies. kemetco will continue wit suc development into te oreseeableuture.
Norman Chow, P.EngPresident, Director, Industrial Process, kemetco Researc Inc.
Norman Cow earned a B.A.Sc. in Metals and Materials Engineering rom te Universit oBritis Columbia, graduating top o is class. Continuing is education, e received a Masters oApplied Science Degree and ten became a Registered Proessional Engineer (P. Eng.) in BritisColumbia. Mr. Cow as over 10 ears o tecnolog development eperience and contractresearc eperience. his bacground includes tecnolog development, business management,international sales, project management and manuacturing.
Mr. Cow coinvented a patented electrocemical metal cleaning process tat is currentlused in approimatel 50 sstems spanning 12 countries. In addition, Mr. Cow as taen
two companies rom concept to commercialiation and as built over 20 demonstration andcommercial projects around te globe. he as been te winner o several prestigious awardstat recognie is sills in engineering and business. In 1996, is patented metal cleaningtecnolog won te Financial Post Gold Award or being te Top Environmental Tecnologin Canada, and ten in 2004 e was named te winner o te Business in Vancouver Top Fortunder 40 Award.
Kemetco Management
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5. Strategic Business Units
Mantra Venture Group currentl as tree strategic business units troug wic it carries outits operations:
Mantra Energ Alternatives Ltd.
Mantra Water
Mantra Media Corp.
Wile eac business unit represents a viable business opportunit or Mantra and itssareolders, Mantra intends to dedicate te entiret o its resources over te net two earsto te development o tose tecnologies under te Mantra Energ Alternatives Ltd. (MantraEnerg) unit. As a result, Mantra Energ is te main ocus o tis business plan te details owic are outlined in later sections o tis report. For more inormation on Mantra Water andMantra Media, reer to Appendices A and B, respectivel.
Joey Jung, P.EngResearc Engineer, kemetco Researc Inc.
Joe Jung earned is Masters o Applied Science Degree rom te Universit o Britis Columbiain Cemical Engineering and subsequentl became a Registered Proessional Engineer (P. Eng.)in Britis Columbia. he as ad a successul career in electrocemical engineering and batterresearc, ormerl serving as Vice President and Cie Tecnolog Ofcer o a publicl tradedbatter development compan.
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6. Financial Plan
6.1 Capital Requirement
Mantra Venture Group Ltd. is currentl seeing a capital investment o $5 Million CDN over tenet two ears. Tis investment will supplement te $2 Million CDN in anticipated revenuegenerated troug earl licensing, cost saring and grant programs over te same period.Overall proceeds o $7 Million CDN will be allocated as ollows:
$2.18 Million CDN Electroreduction o Carbon Dioide (ERC)To complete an onsite demonstration unit capable o converting 100 500 g o CO2 per da.
$0.98 Million CDN Mied Reactant Fuel Cell (MRFC)To complete te benc scale development and precommercial prototpe design o te MRFCtecnolog
$0.80 Million CDN New Tecnolog Development
To investigate tecnologies tat compliment ERC and MRFC and to epand inouse engineeringepertise.
$0.80 Million CDN MaretingFor tradesows, conerences, business development travel, media, etc.
$1.46 Million CDN OvereadFor wages, general and administration costs.
$0.78 Million CDN Woring Capital
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6.2 Performa Financial StatementsPerforma Income Statement 2010 - 2011
MANTRA VENTURE GROUP 2010 2011 Totals
Revenue
Grants/Earl Licensing 1,000,000 1,000,000 2,000,000
TOTAL REVENUE 1,000,000 1,000,000 2,000,000
Expenses
Amortiation (24,000) (24,000) (48,000)
Consulting and advisor (168,000) (168,000) (336,000)
Management ees (123,000) (123,000) (246,000)
Salaries and wages (129,000) (129,000) (258,000)
Legal ees (96,000) (96,000) (192,000)
Accounting ees (18,500) (14,000) (32,500)
Lab Facilit Upgrages (75,000) 0 (75,000)
Public listing costs (36,000) (36,000) (72,000)
Tecnical Management (200,000) (200,000) (400,000)
New Tecnolog Analsis/Development/Patent Fees (200,000) (200,000) (400,000)
Mareting (travel, tradesows, etc) (350,000) (350,000) (700,000)
Interest (36,000) (36,000) (72,000)
General and administrative (120,000) (120,000) (240,000)
ERC Demonstration Unit Project
ERC labour (250,000) 0 (250,000)
ERC lab sstem (1,103,000) 0 (1,103,000)
ERC installation 0 (545,000) (545,000)
ERC contingenc (202,952) (81,752) (284,704)
Mixed Reactant Fuel Cell Project
MRFC labour (140,000) (140,000) (280,000)
MRFC Equipment (320,000) (150,000) (470,000)
MRFC Fabrication (10,000) (20,000) (30,000)
MRFC Patents (20,000) (20,000) (40,000)
MRFC Contingenc (98,000) (66,000) (164,000)
TOTAL ExPENSES (3,769,452) (2,568,752) (6,338,204)
NET INCOME (LOSS) (2,769,452) (1,568,752) (4,338,204)
Proceeds rom issuance o sares 3,500,000 1,500,000 5,000,000
Amortiation (noncas) 24,000 24,000 48,000
Interest (noncas) 36,000 36,000 72,000
Net Cas In (Out) 790,548 (8,752)
Cas Beginning 1,000 791,548
Cas Ending $791,548 $782,796
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7
1. Te Compan committed to pa 5 per mont to und a 2010 Olmpic event (total was 20) 5 was prepaid and te remainder duein Oct, Noc, Dec (montl installments)
2. Consists o 6 per mont or Sawn kim, and 4 per mont or Steve Norris, and 4 per mont or Bucle Dodds3. Consists o 5 Larr kristo, and 5.25 J on Russell4. Interest is noncas as it is an accrual on te convertible debenture debt so it is added bac below
5. Consistent wit prior ear, amount includes kell kristos montl salar, rent paments or Vancouver and Seattle ofces, and otergeneral ofce epenses6. Audit ee presumed to be paid in Q1, te $3,500 is te quarterl accounting ees7. Per discussion wit Larr kristo, CEO, te Compan believes it can raise 3.5 million b end o Feb 2010; and 1.5 million tereater
(assumed) wen te projects proceed into te later stages8. Contingenc is estimated at 15% o total costs or te project9. Consists o wages and salar to kol, Micael, and Cntia $10,750 per mont
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6.3 Return on Investment
Initial Investment: $6.8 Million CDN ($1.8 Million to date, $5 Million New Capital)Return Ater 10 Years: $365 Million CDNAverage Return / year: $36.5 Million CDNROI / year: 536 %
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7. Action PlanTe ollowing Gantt Cart provides a 5ear projected timeline in wic Mantra will carr out its
business development activities.
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1. Summar
Mantra Energ Alternatives Ltd. (Mantra Energ) was incorporated in Ma 2007 wit te missiono activel seeing out alternatives in te energ eld. Current areas o interest include carbonreccling (converting CO2 into useul cemicals and products), alternate was o using uels (e.g.uel cell rater tan combustion), and new sstems or products or te more efcient use o energ.Mantra Energ researces opportunities witin te aorementioned categories, and subsequentl
maes recommendations in regard to investment b Mantra Venture Group.
Mantra Energ currentl as a vested interest in two tecnologies. Te rst is a proprietar carbonreccling tecnolog entitled Electroreduction o Carbon Dioide (ERC). ERC converts CO2 intovaluable cemicals suc as ormic acid, ormate salts, oalic acid and metanol. Troug ERC, MantraEnerg loos to penetrate te multibillion dollar carbon reduction/carbon reccling industr anindustr desperate or a viable solution.
In September o 2009, Mantra Energ disclosed its interest in a second tecnolog entitled teMied Reactant Fuel Cell (MRFC). MRFC is a uel cell wit a new arcitecture tat eliminates teneed or epensive and ragile compenents ound witin tpical uel cell tecnologies maing itmore durable and cost eective to manuacture. Tis tecnolog stands to benet greatl romte urter development o ERC, as it is currentl undergoing development trials using ormate aste uel (one o te e products o ERC). Te global uel cell industr is epected to generate moretan $18.6 Billion USD in 2013, and i signicant advancements are made in te automotive (mobile)sector, tis number could jump as ig as $35 Billion USD. (Energ Business Reports, 2008)Over te net two ears, Mantra Energ plans to epedite te development o tese two tecnologies.Mantra Energ will be building a pilot scale onsite demonstration unit capable o converting 100 500 g o CO2 per da, as well as an MRFC precommercial prototpe. Te costs o tese two projectswill be $2.18 Million CDN and $0.98 Million CDN (respectivel) over te net two ears, or a totaldevelopment cost o $3.16 Million CDN.
Upon completion o te two aorementioned projects, ERC will be read or otae licensingagreements and ull implementation into industr, and MRFC will move to te onsite demonstrationscale.
Mantra Energ Alternatives Ltd.
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2. Electroreduction o Carbon Dioide (ERC)
Carbon sequestration, te process o capturing carbon dioide and storing it in deep geologicalormations, in te ocean or as mineral carbonates, is being ailed as te answer to one o teglobes most pressing questions: wat to do wit te 27 billion metric tonnes o carbon dioideemitted annuall rom te burning o ossil uels? Wile touted as te most promising interimsolution to deal wit te greenouse gas responsible or global warming, carbon capture andstorage (CCS) still remains unproven, costl and will not be commerciall available or manears.
Consulting rm Mckinse & Co. gures tat adding CCS to te net generation o European
power plants could lit teir price b up to US$1.3 billion per project. Teir toroug analsissows tat te tpical cost o a demonstration project is liel to be in te range o US$80$120per tonne o CO2 sequestered.
Legall, tere are concerns over weter CO2 transport and longterm storage present umanor ecosstem related riss. Wile progress is underwa in some countries, no countr as etdeveloped te compreensive, detailed legal and regulator ramewor tat is necessar toeectivel govern te use o CCS.
In act, no ullscale CCS project tat captures and sequesters carbon dioide rom a coalredpower plant as o et eists. Te International Energ Agenc (IEA) is opeul tat 10 ullscaledemonstration plants will be up and running globall b 2015 meaning it ma be anoter 10 to20 ears beore CCS tecnolog is readil available.
In addition, septicism rom local populations must also be overcome. European power giantVattenall AB, or eample, was recentl orced to alt its CCS pilot plant in Scware Pumpe,German due to overwelming saet concerns rom te local population. (Fairle, Aug 82009).
As ear o climate cange grips te globe, businesses and governments are desperate to ndan answer to our CO2 problem. Reling solel on CCS is an incredibl ris and in man placesunworabl epensive solution. More imaginative tining sows us tat te 27 billion metrictonnes o CO2 per ear ma actuall be reccled, representing a viable business opportunit.(Oloman, 2008).
So why expensively transport and store the CO2 underground when it could be proftably
recycled post-capture?
2.1 The Need
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2.2 Technology
Te Electroreduction o Carbon Dioide isan innovative carbon reccling tecnologtat combines CO2 wit water to produceigl sougtater materials suc as ormicacid, ormate salts, oalic acid and metanolvaluable cemicals used in a variet oindustrial applications.
It is te goal o ERC to serve as a sae and more economical alternative to CCS. ERC willbe integrated into industrial plants wereb it will convert captured CO2 into productssuitable or reuse onsite (ormic acid in steel processing, or eample) or or sale inte open maret.
ERC schematic: an electrical chemical process
+=
CO2 h2OhCOOh (ormic acid and ogen)
ERC core electro-chemistry
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In completing te analsis, it was determined tat one tonne o ormic acid ormed troug ERC
eectivel sequesters approimatel 0.95 tonnes o CO2. Assuming tat te ormic acid is tenincorporated into compounds wit a long lietime (as is te plan or ERC), te resulting ormicacid is considered a green product. Wen powered b sustainable electricit, te ERC processwould ten carr a net gain o +0.95 CO2 credits per tonne o ormic acid ormed.
Furtermore, it was noted tat wen te ormic acid is used to substitute anoter ossilbasedcompound, additional replacement credits can be obtained. For eample, Mantra Energ aspreviousl identied ormic acid as a e replacement or drocloric acid (hCI) in industrialprocesses suc as steel picling. B substituting hCI wit ormic acid generated troug ERC, itwas determined tat Mantra Energ would generate +0.95 carbon credits or te conversion oCO2 to ormic acid, plus an additional +2.53 credits or replacing hCI rom a conventional source.Tus, a total o +3.48 CO2 credits would be generated per tonne o ormic acid produced. Inbeneting rom bot sequestered and replacement credits, preliminar calculations sowed
tat ERC could generate as muc as 5.98 carbon credits per tonne o reactant ormed.
Te negative carbon balance scenarios identied troug tis preliminar report are verencouraging. Mantra Energ epects to acieve even urter improvements to its carbonbalance trougout te current set o development trials wit kemetco Researc Inc., and tecompan will complete a ormalied carbon balance stud upon completion o te developmentproject.
For a complete cop o te preliminar carbon balance report, see Appendi D.
ERC
6
5
4
3
2
1
ERC Carbon Balance
Potential Carbon Credits Generated
5.98 carboncredits per tonnegenerated
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Te concentration o Carbon dioide (CO2), earts most notorious greenouse gas resultingrom uman activities, as risen b more tan 30% since te industrial revolution. As Illustratedbelow, CO2 now accounts or 84.8% o all emissions, wit electricit generation aving tegreatest impact o all economic subsectors. (Environmental Protection Agenc, 2006)
2.4 Market
Wit more tan 27 billion metric tonnes o CO2 emitted annuall rom te burning o ossiluels, Government organiations and regulator bodies worldwide are placing unprecedentedpressure on industr sectors in an eort to curb tese emissions.
Governments and major corporations worldwide are investing $ Billions USD in Carbon Captureand Storage (CCS) and carbon reccling tecnologies in an eort to mitigate te release o CO 2rom industrial processes. Te European Union, or eample, is investing 9 Billion Euros ($11Billion USD) to develop up to 12 pilot projects to prove tat CCS wors on a commercial scale.however, despite te amount o scrutin and subsequent developmental support given toindustr, economical and viable solutions to resolve tis agelong issue are still noneistent(oter tan energ conservation). Not onl is CCS still ar rom being economicall viable, itas raised serious environmental concern, legal and regulator issues due to te unnownramications o permanentl storing CO2 underground.
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Mantra Energs objective is to mae electrocemical reduction o carbon dioide not onlcost eective but also protable or emitters or wom CO 2 management is eiter mandatedor desirable. Tereore, te primar marets or ERC will be te ollowing sources o stationarCO2 production:
Electricit generation (power plants)Production and consumption o mineral products suc as cement, lime and soda asProduction o metals suc as iron and steel, aluminum, inc and leadCemical production (e.g., ammonia, petrocemicals and titanium dioide)Consumption o petroleum products in eedstoc and oter enduses
2.4.1 Target Market
Te international maret orcarbon dioide managementis currentl in te $Billions USDand carbon emission creditsare traded at values up to $30USD per tonne o CO2. Ironand steel production in teU.S. alone accounted or 45.2Terragrams o CO2 equivalentin 2005, representing
approimatel 30% o overallCO2 emissions rom industr.(Environmental ProtectionAgenc, 2006)
O tose industriesigligted above, MantraEnerg is particularlinterested in opportunities
suc as integrated plants in industrial applications tat produce large quantities o CO 2 tat canalso utilie te nal products. Te economical production o tese ig value products (ormicacid) ma allow teir use as environmentall riendl replacement to oter cemicals currentlused in industr. ERC would ten be considered as a step towards mitigating climate cange as
well as an economic process.
Upon successul entr into te CO2 maret, a powerul and peraps even more protablemaret will develop or ERCs useul bproducts. Sodium Formate and Formic Acid, two ote main products o ERC, currentl ave an average maret value o $1,440/tonne, wit more
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I te ERC process reaces maret acceptance, itwill liel lead to suppl o ormic acid in ecess omaret demand. Fortunatel, Mantra Energ asidentied several uture applications or ormicacid, leading to a prolic epansion in currentmaret demand, including: steel picling, uel celldevelopment and as a uel additive.
Steel Pickling
Steel picling is part o te nising process inte production o certain steel products in wicoide and scale are removed rom te surace ostrip steel, steel wire, and oter orms o steel bdissolution in acid. A solution o eiter drocloricacid (hCl) or suluric acid is generall used to treat carbon steel products, wile a combination odrouoric and nitric acids is oten used or stainless steel.
$752
$1000
$1200
$1440
As an organic acid, ormic acid would be a ver attractive replacement or hCI in te steelpicling process. Less iron would be lost rom te steel surace, te nal surace qualit wouldbe improved, and corrosion inibitors and neutraliing rinse process would be eliminated.Formic acid is bot biodegradable and reusable and process water could be easil reccled.
Te ollowing diagram depicts te production and usage o ormic acid in a 13,000 tpd steelplant.
Formic Acid Production in a Steel Plant
ERCSteel Plant13,000 tpd
Steel Production
30,000 tpd CO2 258 tpd CO2
29,742 tpd CCS
Catode
Anode
ChOO 270 tpdChOOh(FormicAcid)h
+ O2105 tpd h2O
94 tpd O2 orUse in Power Plant,
h2 Used in DirectReduction o Steel
8 MWh/tonne CO2rom Power Plant
tpd = tonnes per da (metric)
tan 620,000 tonnes o ormic acid produced annuall (Li, 2006). Teir applications are diverse,including eedstoc preservatives, deicing solutions, cleaning solutions and baing soda toname a ew. Te maret or ormic acid as eperienced continual growt and demand over
te past several ears, mainl attributed to te ollowing:European and developing countr demand or ormic acid as a silage
rising raw materials, energ and logistics costs
increase in demand as animal eed preservative
Asian demand or ormic acid in te leater, rubber, ood and parmaceutical industries
(Dunia Frontier Consultants, 2008)
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Formic Acid Use in a Steel Plant
PrecipitateFe
SteelPicling Tan
tpd = tonnes per da (metric)
AeotropicDistillation
5.9 tpd h2Reccle to Power Plant
539 tpd h2O
54 tpdFormic Acid
54 tpd Formic Acid Reccle
539 tpd Water Reccle
13,000 tpdhot Rolled Steel@16 Gauge
270 tpd Formic Acid 427 tpd Ferrous Formate
427 tpd Ferrous Formate539 tpd Water
Ferrous FormateReccle to Blast Furnace
54 tpd Ecess Formic Acid
12,837 tpd Cleaned Steel
Approimatel o te hCI produced in te U.S. is used or picling steel (American Cemistr,
2003), consuming an estimated 5Mt/ear.
Pulp Processing
Te maret or ormic acid is growing rapidl in Asia and one o te leading applications is inpulp and paper maing. Te paper industr in Asia is largel dierent tan tat o Nort Americain tat te paper is derived less rom wood pulp and more rom river reeds. Subsequentl, teprocesses required or maing paper rom river reeds avor te use o ormic acid. Previouspatent lings sow tat ormic acid can be applied at concentrations between 60 and 99% bweigt. Te potential maret in tis application is large and will liel gain more attention as teworld econom improves and protabilit returns to te industr.
Te ollowing sows te integration o Mantra Energs ERC sstem into a steel mill maing13,000 tpd o 16 gauge rolled steel. In te manuacturing process, iron ore is converted intosteel wic is poured into billets; tese are later reeated and rolled into strip steel; as te are
being rolled oides orm wic must be removed to provide a clean surace. Te nised steelstrip goes on to mae rerigerators, car panels or oter steel products.
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Fuel Cells
In uel cells, liquid uels are indirectl combined wit ogen to orm carbon dioide and water
wile generating electricit a process nown as electrooidation. Te complimentar natureo ERC and electrooidation maes it possible to use ERC in a regenerative uel cell ccle, wereCO2 is converted into a uel tat is consumed in a uel cell to regenerate CO2.
Energy
Renewable Energy
CarbonDioxide
FormicAcid
ERCCO2 Converted to Formic Acid
Fuel CellFormic Acid Converted to CO2
Te development o direct ormic acid uel cells (DFAFCs) is liel to be a signicant commerciallvaluable use o ormic acid. DFAFCs are gaining popularit over drogen and metanol baseduel cells because o teir ease o reueling, efcienc, and saet. DFAFCs are currentl beingtested b major producers o portable electronics in pones, laptops and computers. Witcontinued development, tere is potential or DFAFCs to callenge traditional batteries aspower sources or mobile electronic devices wit large scale applications epected to ollow.
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2.4.2 Competition
Tere are currentl no industrial practices in place tat sael mitigate te epulsion o CO2 intote atmospere. Currentl, te most commonl proposed industrial practice is te capture oCO2 and injecting it underground or storage in a process called carbon sequestration. however,ull carbon capture and storage sstems or largescale power plants are currentl ar rombeing cost eective. According to te European Commission, te process will still cost moretan te release o CO2 into te air in 2020 (wit an estimated permit price o 41 Euro per metrictonne). Altoug carbon capture and storage ma sow promise or enanced oil recover,tis is a ver industrial specic application tat can onl be applied in specic locations. Oterpotential applications, suc as cemical processing or treatment b algae are in te R&D stage,owever, practical applications ave not et been proven. Given tese constraints, te EuropeanCommission epects power rms will sequester onl 7 million metric tonnes o CO2 annuall b2020 representing less tan 1% o te CO2 te currentl generate. (Fairle, Aug 15, 2009)
Formic Acid Projected Market
Fuel Additive
In addition to te production o ormic acid,te ERC process can be adapted to produceammonium ormate a potential uel additive
currentl being tested in Europe and Japan. Tiscemical compound sows great promise inreducing NO emissions wen added to dieseluelpotentiall representing et anotersecondar maret or te electroreduction ocarbon dioide.
In addition to economic easibilit, sequestration also aces signicant stewardsip callenges.For eample, a CCS project under te direction o Vattenall in Scware Pumpe, German wasrecentl alted due to local concerns over te mass aspiation tat would occur i teres alea at te surace. Stepan Close o Brunsbuttel German, noted I teres a lea and ou avea 1 to 2 meter ig level o CO2, ever animal and uman being in tis one will die. (Fairle,2009). Tis certainl raises considerable doubt as to weter or not te general public will everaccept te imminent riss associated wit tis proposed metod to reduce CO2.
Carbon Capture Sequestration
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2.4.3 Competitive Advantage
Mantra Eneerg asserts te ollowing advantages o ERC in comparison wit alternative metodso CO2 mitigating tecniques:
Te ERC process is driven b electric energ tat can be taen rom an electric power gridsupplied b dro, wind, solar, tidal or nuclear energ (all renewable).ERC bproducts represent useul, and nanciall protable sources o income (contributingto an estimated ROI o 24%)ERC pilot projects can be eecuted on an scale, wereas sequestration can onl beperormed on a ver large scale (tpicall atcosts o over $1billion)ERC avoids liabilit concerns currentl plaguingsequestration industrMedium reaction rate allows or commercial l
viable CO2 processing timesMedium CO 2 space velocit gives te abilit totreat comparativel large volumes o CO2.hig product selectivit or ormate and ormicacid (up to 90%)Low operating temperature (20 to 80 Celsius)and pressure (below 1 MPa or magnitude opressure)hdrogen is not required as a eed reactant, butis alread present in water used in te processPsical space requirements and subsequentenvironmental ootprint are less tan tat oCCS and algae
ERC is patent pending
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ERC Reactor
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2.4.4 SWOT Analysis
Te ollowing is an analsis o te Internal actors (strengts and weanesses), as well as teeternal actors (opportunities and treats) impacting Mantra Energ and its commercialiationo ERC.
Unique, patent pending tecnolog wit provenprototpeDedicated management teamMan valuable partnersips wit industrleading corporationsRecognied internationallAbilit to act ast and develop projects o ansieCompan is public, maing it easier to accessundingTecnolog demonstrates a positive return oninvestment
Funding or CCS and carbon recclingtecnologies on te risePolitical concern or CO 2 on te rise
Serious doubt concerning sequestration andassociated liabilities and economicsWorlds largest corporations are looing to taeactionMaret sie or CO 2 mitigation is virtuallendlessMan new unctions or ormic acid ave beenidentied
Current econom arming investorswillingness to und projectsCCS still seen b man as most liel solution to
CO2Larger, more eperienced rms ma leverageresources to come up wit a easible solutionbeore Mantra EnergCurrent maret or ormic acid is relativelsmall
Strengths
Opportunities Threats
Weaknesses
Relativel new, small companTecnolog is still in developmentCurrent lab scale ue gas et to be testedBac end sstem to calculate gases is et tobe developed
Helpfulto achieving the objective
Internalorigin
attributesof
theenviro
nment
Externalorigin
attributesof
theenvironm
ent
Harmfulto achieving the objective
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2.5 Development Plan
In October 2008, Mantra Energ completed its rst ERC prototpe, capable o converting 1 kgo CO2 into ormic acid per da. Te tecnical sta as since been ocused on increasing tecatode lie, reducing ormate crossover to retrieve ormate rom te catolte solution, andoptimiing te reactor wit respect to its use in processes or te electrosntesis o ormate/ormic acid. Considerable progress as been made in tis eort, and in Jul 2009 te ERC reactorreaced new eigts b increasing its current efcienc to 89.66% (up rom 46.24%) trougte use o a new proprietar catalst structure.
In collaboration wit kemetco Researc Inc., Mantra Energ will engage in a twostagedevelopment process to tae ERC rom its current stage troug to te completion o an onsite demonstration unit capable o converting 100 500 g o CO 2 per da. Te ollowing is adetailed breadown o te steps to be undertaen.
Stage 1 Engineering, Construction and Testing o Demo Unit (To be completed in 1st Year)Development o ront end CO2 capture system
Development o ront end CO 2 capture sstem
Design and construction o 5 sqm Cell
Construction and development o ventilation sstem, DC power suppl, instrumentation and control
sstem
Fluid andling equipment, saet equipment, rame and crating
Development o bac end concentration and purication sstem
Assembl o lab sstem
Stage 2 Shipping, Installation and On-Site Pilot Demonstration (To be completed in 2ndYear)
Sipping and setup
Onsite operations and pilot demonstrations
Plant maintenance (spare parts, consumables, waste disposal)
For a breadown o te costs associated wit te above development plan, see section 2.6.1.
Witin a 3 ear period, Mantra Energ epects to progress rom pilot scale trials to teimplementation o ull scale commercial ERC reactors capable o processing 100 tonnes o CO 2per da.
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2.5.1 Capitalizing on ERC
Given te magnitude o te ERC project, bot government and corporate partnersips will plaa pivotal role in urter development o te ERC tecnolog.
Government Programs and Grant Relations
A Grant Researc Report, completed in Februar 2009, identied 43 unding programs tat tstrategicall wit te compans current R&D eorts. Mantra Energ as alread began applingor tose grants as recommended in te report, and i successul, Mantra Energ could recover
anwere rom 70% to 100% o uture costs associated wit te development plan sown inSection 2.6.2.
ERC received its rst grant under te National Researc Councils Industrial Researc AssistanceProgram (NRCIRAP) in Ma 2009. Te objective o tis rst grant program was to establis tetecnical basis or electroreduction o carbon dioide to ormate via continuous electrocemicalreactor. Te main milestones to be acieved were: i) to develop longevit o catalst materialsor anode and catode used in te electrocemical reactor, ii) to develop an insitu catalstregeneration metod or te catode catalst material, and iii) to resolve ormate crossover andprolong te lietime o te emploed membrane.
Mantra Energ successull completed tis project in September 2009, Mantra signed its secondContribution Agreement wit NRCIRAP in support o ERC. Te objective in tis recent initiative
is to eplore suitable materials or te catode used in te electrocemical reactor, develop anefcient and eective metod to separate and concentrate te ormate product, and developan efcient and eective metod to convert te ormate product into ormic acid. Mantra willcontinue to wor in collaboration wit kemetco Researc Inc. to see te project troug tocompletion.
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Strategic Alliances
Wile signicant progress as been made on ERC over te past 12 monts, Mantra Energ
is currentl woring to overcome several e obstacles in order to ull capitalie on tecommercialiation o ERC. Tese obstacles include:
Development o a rontend CO2 capture sstem tat supplies ERC wit ugas in suitable concentrations.
Wor is now underwa in collaboration wit kemetco Researc Inc.
Development o a continuous reactor, using catalst regeneration or oter metod.
Signicant progress as been made on tis over te past 6 monts under NRCIRAP program
Use dierent catalst material to epand maret applications and end products.
Mantra Energ is currentl collaborating wit several development partners in tis area
Development o a bacend concentration/purication sstem tat prepares ERC endproducts or teir
intended use.
Suitable tecnologies to acieve tis sstem ave been identied, and product samples are being
ecanged
Wile Mantra is condent tat eac o te above obstacles can be successull overcome,Mantra does not currentl ave te engineering and nancial capabilities to complete tesetass independentl. Tereore, Mantra will orm strategic alliances wit industr leadingcorporations to supplement Mantras engineering and nancing capacit. Alliances ma bestructured in a variet o was, including:
collaborative partnersips
otae agreements
licensing agreements
percentage ownersip (equit)
Board o Directors, Advisors to te Board
In November 2009, Mantra announced a project wit 3M. 3M is a worldrenowned Fortune100 compan wit remarable igtec products in ceramics, abrasives, lms, nonwovenmaterials and oter industr sectors, and Mantra plans to benet greatl rom 3Ms resourcesand engineering capabilities.
Over te course o te 4 monts tat ollow, Mantra and 3M will undertae a sequence o trialsto evaluate a series o 3M parts, especiall membrane and catalst structures, or practicalitand economic easibilit. Te objective o te project is to accelerate te development o tecommercial ERC reactor and reduce te overall operating cost o te industrread pacage.Mantra plans to include tose materials rom 3M tat are ound to contribute to te completecommercial sstem. Funding or te project will be done b wa o cost saring, wit eac partcontributing 50% o total labour and material costs.
In addition, Mantra Energ eld meetings in mid November wit 3M and a ost o prospectivedevelopment partners, and te compan anticipates several oter relationsips will be in placeb earend 2009.
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Assumptions:
Mantra to be included in 4 projects b 2012, increasing to 150 projects b 2019
Collect 300 in annual licencing ees per project
Collect annual roalt o $1.24 M per project (4% o 31 Million in revenue)
Roalt paments commence 3 ears ater site is initiated
Market Penetration
As predicted b te International Energ Association in October 2009, business and governments
will need to spend between US$ 2.4 trillion and US$ 3.4 trillion beore 2050 on carbon captureand storage projects, wit te number o active projects reacing 3,400 b 2050 (Tait, 2009). Itis epected tat Mantras ERC tecnolog will rst enter tis maret in 2012 wit a total o ourprojects. Improved economics and increasing partnersips will lead to increasing penetrationrates tereater, reacing a total o 150 projects b 2019.
Te ollowing table sows Mantra Energs projected revenue rom ERC over a 10 ear period.
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2.6 Financial Plan
2.6.1 Fiscal Requirement
As stated in te development plan, it will tae approimatel two ears or Mantra Energ tocomplete an onsite demonstration unit capable o converting 100 500 g o CO2 per da. Teollowing is a summar o te scal requirements needed to complete eac tas.
Epense year 1 year 2 Total
Engineering, Construction and Testing o Demo Unit 1,353,000 0 1,353,000
Sipping, Installation and Operation Onsite 0 545,000 545,000
Misc/Contingenc 15% 202,950 81,750 284,700
Total Epenses $1,555,950 $626,750 $2,182,700
For a detailed breadown o te above tass and associated costs, see Appendi E.
2.6.2 Return On Investment
An economic easibilit stud was perormed b Mantra Energ in June 2009 to determinete estimated Return On Investment (ROI) o an ERC plant capable o converting 100 Tonneso CO2 into ormic acid per da. Te estimated ROI was orecast at 24%, meaning te initialcapital requirements o te plant would be ull recovered in just over 4 ears. Tis representsa signicant advantage over alternatives suc as CCS, wereb initial capital costs will never berecovered.
For a complete cop o te ROI report, see Appendi F.
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3.1 The Need
Over te past decade, electricit generation troug te combustion o ossil uels as becomea leading concern among environmentalists and activist groups. Wile suc activities pose aserious treat to uman ealt and te overall stabilit o te Earts atmospere, ossil uelcombustion still accounts or te majorit o overall electricit generation toda. In recognitiono tis mounting issue, researcers and scientists ave been struggling to nd a cleaner,sustainable solution to power generation. To date, one o te tecnologies receiving tegreatest attention is te uel cell.
Invented in 1839 b Sir William Robert Grove, uel cells are electrocemical conversion devicestat produce electricit rom uel (on te anode side) and an oidant (on te catode side),wic react in te presence o a catalst. Te reactants ow into te cell, and te reactionproducts ow out o it, wile te catalsts remain unaltered. Since te conversion o te uel toenerg taes place via an electrocemical process (not combustion), te process produces ero(or ver ew) emissions and is bot quiet and igl efcient. (Wiipedia, Sept 2009).
Since teir earl invention, uel cells ave made signicant progress. Te ave increasedin efcienc considerabl, and ave been adopted or use in man sstems, bot stationar(ospitals, nursing omes, otels, wastewater treatment plants, breweries, etc.) and mobile(cars, buses, orlits, etc. all o wic are under development).
Wile a variet o dierent uel cells ave been developed, all ave aced one major barrier
to widespread adoption: cost. In 2008, te U.S. Department o Energ (DOE) reported tatuel cell sstem costs in volume production are $73 per ilowatt. Wile tis represents a greatimprovement rom te average cost o $1,000 per ilowatt seen in 2002, researc suggeststese costs would ave to be urter reduced b over 50% in order to become competitive witalternate tecnologies suc as batteries and gasoline internal combustion engines. (Wiipedia,Sept 2009).
In addition, secondar concerns or current uel cell tecnologies include: durabilit, servicelie and special requirements or some tpes o uel cells. Stationar uel cell applications, oreample, tpicall require more tan 40,000 ours o reliable operation troug a wide range otemperatures. Tis is oten considered a callenge given te structural components o currentuel cell tecnologies.
3. Mied Reactant Fuel Cell (MRFC)
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3.2 The Technology
Invented b Proessor Emeritus Colin Oloman in te Clean Energ Researc Center (CERC) atte Universit o Britis Columbia Canada, te Mied Reactant Fuel Cell (MRFC) is a uel cellwit an unconventional arcitecture tat eliminates te need or some operating eaturesand components. Unlie tpical uel cells tat require a Proton Ecange Membrane (PEM) toseparate te uel rom te oidant witin te cell, MRFC mies te uel wit te oidant andeliminates te need or te epensive et ragile membrane.
Comparison between Conventional PEM Fuel Cell and Mixed Reactant Fuel Cell (MRFC )
As a result, Mantra Energ anticipates a simplied and muc more cost eective manuacturingprocess upon commercialiation.
Under te direction o Dr. Oloman, te tecnical sta is currentl undertaing easibilit studieson te MRFC tecnolog using ormate as te uel. I successul, tis will represent a signicantopportunit or Mantra Energ, as ormate is one o te e products o ERC te compans CO2reccling tecnolog.
MRFC is currentl in te critical stages o te patent application process, limiting te amount o
tecnical inormation and specications tat can be released at tis time. More inormation onte tecnolog will be released sortl.
Mantra Energ signed a worldwide eclusive licensing agreement or MRFC wit Pro. Olomanin September 2009.
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3.3 Market
Fuel cells provide direct current (DC) voltage as used to power motors, ligts and electricalappliances. Tere is a variet o uel cells bot available and under development toda, eaccompeting wit more conventional power sources suc as gasoline engines and batteries.Current applications can be divided into one o tree maret categories: stationar, mobile orportable. Te global uel cell industr is epected to generate more tan $18.6 Billion USD in2013, and i signicant advancements are made in te automotive (mobile) sector, tis numbercould jump as ig as $35 Billion USD. (Energ Business Reports, Jul 2008).
Te ollowing is a brie description o eac o te aorementioned maret segments:
StationaryMore tan 2,500 stationar uel cell sstems ave been installed globall in a wide varieto applications, including: ospitals, nursing omes, otels, ofce buildings, scools,
telecommunications, landlls, wastewater treatment plants and utilit power plants. Sucsstems can eiter be connected to te electric grid to provide supplemental power and bacupassurance or critical areas, or installed as gridindependent generators or onsite service inareas tat are inaccessible b power lines. (Fuel Cells 2000, Sept 2009).
MobileAll o te major automaers are currentl woring to commercialie uel cell cars, and severalave alread entered te maretplace in Caliornia. In 2007, General Motors released te CevEquino FC powered b a PEM uel cell. honda later released its 2008 FCx Clarit model alsopowered b a PEM uel cell. (Fueleconom.gov, Sept 2009)
Fuel cells ost great potential in teir abilit to power buses, boats, trains, planes, scooters,orlits and even biccles, and manuacturers in tese areas are continuousl striving to mae
uel cells economical or mass production. Wile still relativel epensive, uel cells are slowlentering into tese alternate mobile marets. In September, 2009, or eample, Saul Paulo, Brailbecame te rst cit in Latin America to introduce uel cell buses into teir eet.
PortablePortable uel cells can be urter divided into two segments: uel cell power pacs and smallportable power generators.
Fuel cell power pacs reer to batter replacement tpe applications. Eamples would be uelcells pacaged into portable devices suc as laptop computers, cellular pones, digital cameras,camcorders, and power tools. Portable devices are seen as emploing up to 100watt ourso energ, wit supplemental energ available troug reueling cartridges. Eamples include:cellular pones (13 W), Computers (550 W), Camcorders (25 W) and Cordless Tools (20200
W).
Small portable power generators reer to units up to about 20 pounds in weigt, up to 3 5W power and wit uel or up to 1 to 2 W/r energ. Eamples o applications include poweror camping and oter recreational activit, or sortterm power in emergenc situations. (FuelCells 2000, Sept 2009).
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3.3.1 Target Market
Given te MRFCs current stage o development, it is not easible to narrow its maret ocus attis time. Mantra Energ will narrow te scope o MRFCs target maret as it learns more aboutte tecnolog troug development trials.
3.3.2 Competition
Mantra Energ aces bot direct and indirect competition in entering te uel cell industr.Direct competitors consist o oter uel cell manuacturers, wile indirect competitors includerecargeable batteries, gasoline engines and gas turbines.
Direct Competition
Tere is currentl a large list o uel cell manuacturers woring on te aorementionedtecnologies in an eort to penetrate tose maret segments mentioned in Section 3.3. Teollowing is a sample list o manuacturers currentl involved in eac maret segment:
Wile te percentage o uel cells manuactured and sold b tecnolog tpe as remainedairl constant in recent ears, certain uel cells ave te potential to become te dominanttecnolog or automotive engines, power stations, and power pacs or portable electronics.
Te uel cell maret is currentl dominated b Proton Ecange Membrane (PEM) uel cells atecnolog using a protonconducting polmer membrane to separate te anode and catodesides. Wile tese uel cells can operate at relativel low temperatures and ave a ig powerdensit, te are still epensive in comparison to alternative orms o conventional energ, andcan be ragile in construction.
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Te ollowing is a brie summar o PEM tecnolog, along wit oter popular uel celltecnologies under development toda. (Fuel Cells 2000, Sept 2009).
Proton Ecange Membrane uel cell (PEM)Operate at relativel low temperatureshave ig power densit
Can var teir output quicl to meet sits in power demand
Sensitive to uel impurities, and cell outputs generall range rom 50 watts to 75 W.
Well suited or applications requiring quic startup (suc as automobiles)
Primar candidates or ligtdut veicles, buildings, and potentiall smaller applications including laptops
and portable devices.
Posporic Acid uel cell (PAFC)Generate electricit at more tan 40% efcienc
Use liquid posporic acid as te electrolte and operate at about 450 oF.
85% cogeneration rate
Can use impure drogen as te uel (can tolerate a CO concentration o appro 1.5%).Commerciall available toda installed in 19 Nations or a variet o applications, including ospitals, nursing
omes, otels, ofce buildings, scools, utilit power plants, landlls and wastewater treatment plants
Molten Carbonate uel cell (MCFC)Use an electrolte composed o a molten carbonate salt miture suspended in a porous, cemicall inert
matri
Operate at ig temperatures appro. 1200 oF
Require CO 2 and ogen to be delivered to te catode
have been operated on drogen, carbon monoide, natural gas, propane, landll gas, marine diesel and
simulated coal gasication products.
10 W to 2 MW MCFCs ave been tested on a variet o uels and are primaril targeting electric utilit
applications.
Solid Oide uel cell (SOFC)Use a ard, nonporous ceramic compound as te electrolte
Operate at ver ig temperatures appro. 1800 oF
One tpe uses an arra o meterlong tubes, and oter variations include a compressed disc tat resembles
te top o a soup can
Tubular are closer to commercialiation and are being produced b several companies around te world
Suitable or stationar applications as well as or auiliar power units used in veicles to power electronics
Alaline uel cell (AFC)Use potassium droide as te electrolte
Operate at 160 oF
Can acieve power generation efciencies o up to 70%
Ver susceptible to carbon contamination, and tus require pure ogen and drogen
Used b N.A.S.A. on space missions to provide bot electricit and drining water
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Direct Metanol uel cell (DMFC)Similar to PEM in tat te use polmer membrane as te electrolte
Te anode catalst itsel draws te drogen rom te liquid metanol, eliminating te need or a uel
reormer
Efciencies o about 40% are epected (iger efciencies acieved at iger temperatures)
Operating temperature: appro. 120190 oFAttractive or midsied portable applications: cellular pones and laptops
Manuacturers are also woring on DMFC prototpes to be used b te militar or powering electronic
equipment in te eld.
Regenerative uel cellWater is separated into drogen and ogen b a solarpowered electroler.
Te drogen and ogen are ed into te uel cell wic generates electricit, eat and water.
Te water is ten recirculated bac to te solarpowered electroler and te process begins again.
Attractive as a closedloop orm o power generation
Currentl being researced b N.A.S.A. and oters worldwide
zinc Air uel cell (zAFC)Tpicall, tere is a gas diusion electrode (GDE), a inc anode separated b electrolte, and some orm o
mecanical separators
GDE is a permeable membrane tat allows atmosperic ogen to pass troug
Ater te ogen as converted into drol ions and water, te drol ions will travel troug an
electrolte until it reaces te inc anode, were It reacts wit te inc and orms te electric potential
Ver similar to PEM, but te reueling is ver dierent and more similar to batteries
zAFCs contain a inc uel tan and a inc rerigerator tat automaticall and silentl regenerates te uel
Primar advantage over oter batter tecnologies is its ig specic energ a e actor in determining
te running duration o a batter relative to its weigt.
Proton Ceramic uel cell (PCFC)New tecnolog
Based on a ceramic electrolte material tat eibits ig protonic conductivit at elevated temperatures
Sare te termal and inetic advantages o ig temperature operation at 700 oC wit molten carbonate
and solid oide uel cells, wile eibiting all o te intrinsic benets o proton conduction in PEM and
posporic acid uel cells.
Can operate at ig temperatures and electrocemicall oidie ossil uels directl to te anode eliminating
te intermediate step o producing drogen troug te costl reorming process
PCFCs ave a solid electrolte so te membrane cannot dr out as wit PEM uel cells and liquid cannot lea
out as wit PAFCs.
Microbial uel cell (MFC)Use te cataltic reaction o microorganisms suc as bacteria to convert virtuall an organic material into
uel
Common compounds include: glucose, acetate, and wastewater
Enclosed b ogenree anodes, te organic compounds are consumed (oidied) b te bacteria or otermicrobes
Operate in mild conditions: 2040 oC
Could be capable o producing 50% efcienc
Suitable or small scale applications suc as medical devices ueled b glucose in te blood, or larger
applications suc as water treatment plants or breweries producing organic waste tat could ten be used
to uel te MFCs.
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Indirect Competition
Oter tan electricit generation troug traditional ossil uel combustion, batteries,
recargeable batteries in particular, are uel cells main competition. Te ollowing is a summaro recargeable batteries currentl under development and in use as alternate orms o energconversion:
Batter Tpe Cell Voltage Caracteristics
Nicel Cadmium 1.2 Inepensive.
hig/low drain, moderate energ densit.
Can witstand ver ig discarge rates wit virtuall no loss o
capacit.
Moderate rate o seldiscarge.
Reputed to suer rom memor eect (wic is alleged to cause earl
ailure).
Environmental aard due to Cadmium use now virtuall proibited in
Europe.
Lead Acid 2.1 Moderatel epensive.
Moderate energ densit.
Moderate rate o seldiscarge.
higer discarge rates result in considerable loss o capacit.
Does not suer rom memor eect.
Environmental aard due to Lead.
Common use Automobile batteries
Nicel Metal hdride 1.2 Inepensive.
Not usable in iger drain devices.
Traditional cemistr as ig energ densit, but also a ig rate o
seldiscarge.
Newer cemistr as low seldiscarge rate, but also a ~25% lowerenerg densit.
Ver eav. Used in some cars.
Litium ion 3.6 Ver epensive.
Ver ig energ densit.
Not usuall available in common batter sies
Ver common in laptop computers, moderate to igend digital
cameras and camcorders, and cell pones.
Ver low rate o seldiscarge.
Volatile: Cance o eplosion i sort circuited, allowed to overeat, or
not manuactured wit rigorous qualit standards
Common use consumer electronics
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3.3.3 Competitive Advantages
Fuel Cells vs. Conventional Power Sources (Batteries, Gasoline Engines)
Sie: Fuel cells can be compact and ligt weigt in comparison wit conventional batteries
Temperature Tolerance: Unlie batteries, uel cells do not degrade at ig temperatures and teir range can
be between 40oC and +50oC
Environmental Impact: Fuel cells do not use combustion, tereore ver little CO 2, NO, SO or particulate
emissions
MRFC vs. Oter Fuel Cell Tecnologies
Economic Feasibilit: Lac o Proton Ecange Membrane (PEM) sould provide or a simplied and muc
more cost eective manuacturing process upon commercialiation.
Durabilit: MRFC design eliminates te need or ragile components as ound in oter uel cell designs.
IP Protected: Currentl undergoing patenting process, maing te above advantages sustainable over te
long term.
3.3.4 SWOT Analysis
Te ollowing is an analsis o te internal actors (strengts and weanesses), as well as teeternal actors (opportunities and treats) acing Mantra Energ and its commercialiation oMRFC.
Unique, patent pending tecnolog tat is morecost eective and durableDedicated management teamAbilit to act ast and develop projects o ansieCompan is public, maing it easier to accessunding
Fuel cells recognied as potential replacement or batteriesMaret is epanding in bot stationar andmobile applicationsMaret still in need o more economical designbeore rapid epansion into maretPotential ee grants/government assistanceprograms
Current econom arming investors willingness to und projectsSome staeolders ave lost interest/given upon uel cells due to ailed economicsLarger, more eperienced rms ma leverageresources to come up wit a easible solutionbeore Mantra Energ
Strengths
Opportunities Threats
Weaknesses
Relativel new, small companTecnolog is still in development stageEtensive capital required to completedevelopment
Helpfulto achieving the objective
Internalorigin
attributesof
theenvironment
Externalorigi
n
attributesof
theenvironme
nt
Harmfulto achieving the objective
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3.4 Development Plan
Te mied reactant uel cell is currentl in te earl stages o development, and te tecnicalsta is currentl undergoing easibilit studies under te direction o Pro. Emeritus Oloman. Incollaboration wit kemetco Researc Inc., te ollowing steps must now be taen b MantraEnerg to tae MRFC rom its current stage troug to te completion o a precommercialprototpe:
Acquire bot test equipment and uel cell materials necessar or development
Development o catodes, including bot catalst and structure
Development o anodes, including bot catalst and structure
Development o gas injection sstem
Cell analsis and development, including geometr, operating conditions, ows, temperature and pressures
Fuel cell design wor
Sstems integration and controls
Overall manuacturing stud
Installation
Te above will be completed witin two ears. A breadown o te costs associated wit teabove development plan is outlined in Section 3.5.1.
3.4.1 Capitalizing on MRFC
Similar to te ERC project, bot government and corporate partnersips will pla a pivotalrole in urter development o te MRFC tecnolog. Mantra Energ will be looing to benetrom Government Grant programs, suc as te National Researc Councils Industrial ResearcAssistance Program (NRCIRAP).
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3.5 Financial Plan
3.5.1 Fiscal Requirement
As stated in te development plan, it will tae approimatel two ears or Mantra Energ tocomplete te benc scale development and precommercial prototpe design o te MRFCtecnolog. Te ollowing is a summar o te scal requirements needed to complete eactas.
Epense year 1 year 2 Total
Fuel cell test station 150,000 20,000 $170,000
Laborator equipment 100,000 20,000 $120,000
Electrocemical equipment 20,000 10,000 $30,000
Materials (cemicals, reactor components) 30,000 80,000 $110,000
Instrumentation 20,000 10,000 $30,000
Electronics 0 10,000 $10,000
Fabrication 10,000 20,000 $30,000
Laborator space 10,000 10,000 $20,000
Personnel (Engineer/Manager) 120,000 120,000 $240,000
Consultants 20,000 20,000 $40,000
Patenting (IP) 20,000 20,000 $40,000
Contingenc 98,000 66,000 $164,000
Total Epenses $588,000 $396,000 $984,000
For a detailed breadown o te above tass and associated costs, see Appendi G.
3.5.2 Return On Investment
An ROI analsis or MRFC is currentl underwa, and will be available sortl.
4. Summar
In conclusion, Mantra Energ currentl as a vested interest in two innovative tecnologiestat sow virtuall unlimited maret potential: te Electroreduction o Carbon Dioide andte Mied Reactant Fuel Cell. Over te net two ears, Mantra Energ plans to epedite tedevelopment o tese two tecnologies b building a pilot scale onsite demonstration unit
capable o converting 100 500 g o CO2 per da, as well as an MRFC precommercial prototpe.Te costs o tese two projects will be $2.18 Million CDN and $0.98 Million CDN (respectivel)over te net two ears, or a total development cost o $3.16 Million CDN.
Upon completion o te two aorementioned projects, ERC will be read or otae licensingagreements and ull implementation into industr, and MRFC will move to te onsitedemonstration scale.
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Dunia Frontier Consultants (June, 2008). Dunia Formic Acid Surve. ttp://www.dcinternational.com/les/DuniaFormicAcidSurve15June2008.pd
Energ Business Reports (Jul, 2008). Fuel Cell Tecnolog and Maret Potential. Retrieved Sept 2, 2009rom ttp://www.energbusinessreports.com/sop/item.asp?itemid=790
Environmental Protection Agenc (2006). Industrial Processes. Retrieved Marc 12, 2009 rom ttp://www.epa.gov/climatecange/emissions/downloads06/07Industrial.pd
Fairle, Peter (Aug 2009). Were Europe Buries Carbon. Retrieved Aug 25, 2009 rom www.spectrum.ieee.
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Fairle, Peter (Aug 8, 2009). Scware Pumpe hits a Bump. Retrieved Aug 25, 2009 rom www.spectrum.ieee.org/blog/energ/renewables/energwise/scwarepumpeitsabump
Fuel Cells 2000. (Sept. 2009) Fuel Cell Basics Applications. Retrieved Sept 8, 2009 rom: ttp://www.uelcels.org/basics/apps.tml
Fueleconom.gov (Sept. 2009) Fuel Cell Veicles. Retrieved Sept 8, 2009 rom: ttp://www.ueleconom.gov/eg/cv_sbs.stml.
Li, yeli (June, 2006). Te Cina Cemical Reporter.
Murp Analtics (Januar, 2009). ERC Tecnolog Converts CO2 rom Pollutant to Asset. www.
murpanaltics.com
Oloman, R (Jul 16, 2008). Carbon Reccling An alternative to carbon capture and storage. RetrievedSept 2, 2009 rom ttp://www.eaminer.com/4230DCGreenBusinessEaminer~2009m7d16OpedSeriesRowanOlomanCarbonRecclingAnalternativetocarboncaptureandstorage
Seturaman, Dinaar (June, 2008). Carbon price must rise, IEA Director sas. Retrieved Aug 21, 2009 romttp://www.nancialpost.com/storprinter.tml?id=1674049.
Tait, Carrie (October 13, 2009). Canada could cas in on climate cange battle. Te Financial Post. RetrievedOctober 13, 2009 rom ttp://www.nancialpost.com/stor.tml?id=2096081