A local initiative to produce diesel fuel from a mixture of municipal waste and used oil appears poised to move to the next level.
Northcore Technologies Inc. (TSX:NTI) announced on Monday that it’s signed a letter of intent to buy a renewable-diesel fuel demonstration plant located in Blindman Industrial Park. The plant, which is being promoted as a precursor to similar commercial-scale facilities, was brought here from the United States by Blue Horizon Bio-Diesel Inc. of Red Deer.
Earlier this year, Blue Horizon struck a deal to sell the plant and other assets to Cielo Gold Corp. (CNSX:CMC), and it’s Cielo that has now signed the letter of intent with Northcore. That conditional deal would see 48 per cent of Northcore’s common shares transferred to Cielo, with the two companies to share in the profits from commercializing the renewable-diesel fuel technology.
Don Allan, who is CEO of Blue Horizon Bio-Diesel and Cielo, said the transaction is intended to attract the capital needed to move the technology forward. It is hoped this can be done through Northcore, as a publicly traded company.
“Our intent is to take Cielo all the way to the big board (Toronto Stock Exchange), as well as be listed in the States,” said Allan.
Northcore has scheduled a July 23 shareholders meeting to vote on the Cielo deal. It’s also appointed Allan to its board and has named him its CEO.
The transaction is also subject to the completion of a formal agreement, TSX approval and other conditions.
In January, Blue Horizon held an open house to showcase its demonstration plant to industry and government officials. At that time, Allan described how the process can use plastic, paper, cardboard, sawdust and woodchips, tires and waste oil as feedstocks, with a special catalyst and heat added to stimulate a chemical reaction.
The province subsequently approved Blue Horizon for funding under its Alberta Bioenergy Producer Credit Program.
Allan said on Monday that the demonstration plant, which was originally developed by a German company, continues to perform well.
“We’ve managed to make some very good improvements on the technology. We’re very pleased with the results.”