Pond Technologies (TSXV: POND) appears to be getting underway with its partnership related to the production of algae-based animal feed ingredients. The firm this morning provided an update related to an arrangement signed back in September with that of Livalta, whom is a subsidiary of Associated British Foods.
The aim of the partnership entered between the two firms is the production of animal feed ingredients from carbon dioxide emissions, which is to be produced on a commercial scale from algae. The company simplifies the process by stating, “the technology is designed to take CO2 emissions out of the air to produce high value protein.”
The partnership reportedly consists of two separate pieces. The first piece will see AB Agri acquire an algae demonstration system from Pond. The system is to be purchased for a total figure of $2.9 million. As part of this purchase, Pond will enter a licensing agreement with the company, where it is to receive funds to the tune of $2.6 million for “technology access fees,” as well as an associated royalty on future plants established by the partnership.
Once the system is acquired and operational, algae is to be grown for animal feed trials and further development of feed products, which is to be sold by AB Agri upon successful completion. Currently, the pilot plant is expected to come online in the fourth quarter of this year.
“We are pleased with the progress made to date with our partner Livalta/AB Agri on this milestone filled project, despite the supply chain disruptions seen around the globe. This is the world’s first scalable algae plant utilizing carbon emissions for the production of protein used in animal feeds,” commented Pond Technologies CEO Grant Smith.
To date, of the funds outlined, $1.5 million has been received by Pond, with initial engineering work said to be completed. $4.0 million is yet to come from licensing and engineering payments related to the project, as well as procurement and construction payments.
The development follows a recent initiative announced by the company to identify an algae strain that could potentially dramatically reduce methane production, and thereby carbon emissions, by cattle.
Pond Technologies last traded at $0.23 on the TSX Venture.
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