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I wrote about this amazing microcap renewable biodiesel for a blog on a site that pretty much is now jumping the shark. I done a ton of DD and really, really like the company. Below is the section, unadulterated:


Cielo Gold (CMC on the CNSX) - First Time on Blog!

Important! A TSX LISTING HAS BEEN ANNOUNCED! (See below)
Note re CNSX: If you get a quote at CNSX.ca, they have depth by order and price. If you get a quote elsewhere, be sure to use the different exchange prefix – ie. at Stockhouse, you plug in C.CMC – not V.CMC.
Name Change Coming: Cielo Waste Solutions Corp.

CMC‘s “focus is on converting landfill waste to recoverable products and renewable diesel.”

CMC, in my educated opinion, has world-beating technology, a space (biodiesel / renewable diesel/ biofuels / clean tech) that needs a winner - and enough blue sky to be a smash hit.

Highlights from their Corporate FactSheet, dated June 18, 2013, can be read near the end of this section.

Notes re the listing/s:

Note 1: CMC is doing a reverse takeover with Northcore Technologies (NTI on the TSX).

Note 2: As the technology is not yet in NTI – and as NTI is doing a consolidation (1-for-20, I believe) IMHO, there isn’t a good arbitrage opportunity yet re buying the NTI.

Note 3: CMC is itself taking the biodiesel technology, etc. from another company, Blue Horizon (BH on the TSX).

I initially heard about CMC’s new biodiesel technology a year and a half ago at a lunch in Toronto – and I was blown away. In response to a query of mine, CMC’s new President replied that he could take care of Toronto’s garbage problem, make great money – and hide the technology in enclosed buildings throughout the city!

I believe CMC’s technology can change the future of waste management. In seconds, municipal solid waste becomes some of the best quality biodiesel renewable on the planet. There are few emissions – and the cost is ......... pennies per liter. What could be better than that? – Other than tipping fees to the company (And making feedstock costs lower or free) for taking the waste.

1.1 million shares of CMC have traded over the last few weeks - mostly in the 24-25 cent range. Things definitely look to be heating up on the market side! Take a look:

http://www.stockwatch.com/Quote/Detail.aspx?action=go&sn...

Here is a quick look at the TSX deal.

http://thetradersdigest.blogspot.ca/

Here is the NR:

http://www.stockhouse.com/companies/stories/t.nti/8893210

My best guesstimate is that Cielo will end up with roughly about 70% of the combined entity.

Important to note re the Coming TSX Listing:

-When the technology goes to the TSX, I am very sure that a lot of funds that need a biodiesel / biofuels / clean tech company in their portfolios that make sense. I am very confident they will all give the company a very good look – i.e. this may be an indexing exercise for them.


The History of the Company:

I first wrote about this biodiesel technology when writing in the Jimrockford Blog about Blue Horizon Industries Inc (BH on the CNSX). BH had a number of divisions – but the only one I was interested in was the biodiesel division. With the new deal in place between BH and CMC, all BH shareholders will hold a very good amount of shares in CMC (and in NTI if that deal goes through, as it should, later this month).

- I have followed this technology’s progress closely and I even flew to the launch of its demonstration plant in Red Deer this winter (Red Deer in January at 30 degrees below zero, fercryinoutloud!) I was so impressed. I was even more taken with things when I talked to all the hundred or so industry pros there – and the surrounding area mayors who wanted to acquire the technology immediately for their municipalities!
- This technology is Version 2.0 + +, IMHO. The source technology is of German origin.
- First generations of this technology have been running for years.
- The BH technology has gone from pilot plant - to demonstration plant – and now will be building commercial plants.
- Technologically, the move from up from demonstration plant to commercial plant (from 50 litres and hour to just south of 1000 litres an hour) is not a big deal, as it will still only use two turbines.


Cielo’s Technology Beats Every other Biodiesel Company’s Hands-down – in my opinion and the opinion of a lot of experts I have talked to.

Note: Biodiesel is produced from crop-based feedstocks. Cielo makes renewable diesel.



Cielo vs. The Competition:

1. Cielo uses Municipal Solid Waste and other feedstocks. What can be better than that? Every city in the world has a waste problem. MSW hands-down beats every other substance being used to make biodiesel renewable.
2. Cielo can get its feed (MSW) for free or for very cheap prices. Other biodiesel companies use feed that can be VERY expensive and hard to come by.
3. Cielo’s cost to make a liter of biodiesel – all in - is a fraction of its competitors. A good guesstimate is that Cielo’s cost is in the 50-cent range (allowing for its 13 cent a liter government grant – see below) – while a competitor such as Biox (BX on the TSX) out of Hamilton, ON, makes biodiesel for roughly $1.85 a liter – and may be selling it for $1.30 a liter in 2013!
Note: BX, like many clean tech companies, has had massive costs, government subsidies – and problems.
4. Cielo’s operational costs are low.
5. Cielo will be very profitable and does not need government grants (although they received a ….government grant for $7.86 million at 13 cents a produced liter).
Note: Many of CMC’s competitors need massive government grants to survive – and more than a few are while elephants because of this. Government grants are being discontinued in 3 years, so if a business doesn’t work economically now, they may become extinct.
6. Cielo’s technology is modular (a 5-module daisy-chain, tops). It can be moved right onto dump sites and moved as needed. Most competitors need land and massive infrastructure that is intended to be permanent.
7. Cielo’s low CAPEX is a tiny fraction of its competitors. Competitors have CAPEX’S which run extremely high – ie. they can run into the hundreds of millions of dollars.
8. Cielo’s technology has low emissions.
9. Cielo’s biodiesel is the best there is – ie. CMC can make aircraft and highway grade low sulphur diesel – ie. It will exceed all government and regulatory standards! Most competitors cannot make this statement.
10. Cielo will be able to sell its product in the $1.40 range (and that’s being very conservative). With the cost per liter being in the 50-cent range, that makes for very healthy margins.
11. Cielo has no shortage in demand for its product. Canada is starving for it.
12. Cileo’s biodiesel does not freeze or go bad – like a lot of their competitors’ product. Renewable diesel has a longer shelf life and a much lower freezing point than biodiesel.
13. Cielo’s technology makes for very little waste material. There is some rock-like material (asphaltine discharge) that can be used to pave roads and a tiny amount of waste water.
14. Cielo’s technology has minimal water requirements.
15. Cielo’s technology does not produce coke.
16. Cielo’s technology has low temperature and pressure.


Cielo’s Technology is Modular:

- 1, 2, 3, 4, 5 or 6 units (ie. as many as can be supported) can be daisy-chained together, each taking a different type of municipal solid waste (MSW).
- If one module breaks down, it can easily be moved away for repair – and the remaining modules can keep producing biodiesel.
- A municipality can buy the amount of modules they need. This means the potential customer base for CMC is exponentially larger.
- Units can be put right on the dumpsite and a temporary shelter can be built around it, with some ventilation.


The Macro Outlook for Biodiesel

Everybody needs biodiesel – the West especially. In Alberta, it is regulated that 2% fuel has to be biodiesel. So, corn, etc. is shipped to the US to make biodiesel and then it is shipped back to Western Canada for use – as they are not making enough to be self-sufficient.
Re the above, well, biodiesel can freeze, making for a very bad solution for Western Canada and its cold winters. Cielo’s biodiesel is much like regular oil – and is therefore much more viable.


Closing Points:

- Think of a Cielo module working on a city dump as being akin to a producing oil well in a field.
- The company wants 6 Cielo modules in every city dump in the world.
Note: This is dependent on a municipality’s waste stream – as each module requires 20% of 120 tons of MSW.
- A lot of Funds have a mandate to have decent clean tech in their portfolios – and can’t find anything satisfactory. Indexing alone will be great for this company – when it reaches the TSX next month.
- With tipping fees, the product may almost be produced for free.
Note: Cielo is looking at roughly 50 to 60 cents a liter cost per 700lph and a selling price of $1.40 (very conservatively).
- Cielo has the simplest plant and the simplest feed – garbage.
The technology is scalable enough that cities won’t have to go initially balls-in for massive start-up expenditures. And they have the feed, so a lot of it should be a one-off cost and then they can save dollars on their equipment and fuel costs.

HANDLED PROPERLY, I BELIEVE CIELO CAN BE A BILLION DOLLAR COMPANY! THE BLUE SKY COULD NOT BE BIGGER.

Note:

1. I have a LOT more to say about this company in my next blogs. – too much for one blog.

2. I have some docs that aren’t online. (One has a nice picture of the demo plant) If anybody is interested, just inbox me – when SH gets it back up.


Highlights from the Corporate FactSheet, dated June 18, 2013

Cielo’s growth strategy and corporate focus will be on:
Waste Diversion/Reduction
-Divert waste from landfills.
Waste Recoverables (copper & other metals, compost)
-Recovery of valuable material for resale.
Waste to Renewable Fuel
-Refine MSW and cellulose into an ultra-low sulfur renewable
diesel.

Waste Diversion/Reduction
Full sorting line with separating shredding and drying
Proprietary technology to reduce waste sent to landfills up to
95%
Can reduce moisture up to 50% with no heat

Waste Recoverables
Recover valuable material for resale
Separate all metals and valuables
Processing of Organic Materials into Fertilizer
Fertilizer technology with accelerated processing times

Waste to Fuel
Operational Demo plant located in Red Deer, Alberta
Multiple feedstock inputs:
Municipal Solid Wastes, Recycled Tires, Wood Chips, Paper,
Plastics, Bitumen, Heavy Oils and Yellow Grease
Low temperature (>300°C) & low pressure (>0 psi)
Government Mandate 2% provincial (AB), 2% federal
Provincial and Federal Government Grants Established

CAPITAL STRUCTURE

(As of June 17 2013)
Shares Outstanding 25,583,372
52 Week High/Low CDN$0.30-$0.03
Market Cap CDN$6.65Million

Cielo Waste Solutions Corp.
Reducing of Alberta’s carbon dioxide (CO2) footprint by more than 6 million tonnes over the
next 25 years – the equivalent of removing more than 42,000 cars off the road every year.


Here are some good sites for your perusal:

http://biodiesel.infopop.cc/eve/forums/a/tpc/f/419605551/m/7...
http://canadacleanfuels.com/index.php/bio-diesel/fuel-fact-s...
Note: The Canada Clean Fuels website has a lot of useful information on biodiesel
http://www.cleantechbiofuels.net/About%20Us/index.html
https://www.interstatebiofuels.com/Biofuel_Facts.html
http://cmsdata.iucn.org/downloads/biofuels_fact_sheet_wcc_30...
http://auto.howstuffworks.com/fuel-efficiency/biofuels/difer...
http://www.wisegeek.com/what-is-the-difference-between-biodi...
http://wiki.answers.com/Q/What_is_the_difference_between_bio...
http://www.treehugger.com/renewable-energy/ethanol-vs-biodie...
http://pellets-wood.com/difference-between-ethanol-and-biodi...
http://www.altenergystocks.com/comm/content/biodiesel-stocks...
http://biodiesel.infopop.cc/eve/forums/a/tpc/f/249605551/m/3...

CRFA Members
http://www.greenfuels.org/en/about/get-involved.aspx
http://biodiesel.infopop.cc/eve/forums/a/frm/f/249605551
http://www.biodieselmagazine.com/plants/map/
http://www.biodieselmagazine.com/plants/map/

I am doing a comparable re clean tech stocks and would be happy to hear your ideas when SH Messaging comes back.
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