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Active Energy Group JV to market permits for prime Canadian forestry

Biomass provider Active Energy Group has entered into an important new forestry joint venture in the land of the lumberjacks.

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Biomass provider Active Energy Group (LON:AEG) has entered into an important new forestry joint venture in the land of the lumberjacks.

The joint venture, with three indigenous aboriginal Canadian groups, will exclusively commercialise mature forestry assets in Alberta, Western Canada.

Active will have a 45% equity interest in KAQUO Forestry & Natural Resources Development; its partners are the Alberta Métis Settlements of Peavine, Paddle Prairie and East Prairie, who are the owners of the forestry assets, and Grand Chief Ronald Derrickson of British Columbia.

Over the last two months a forestry sampling programme has been completed on behalf of KAQUO, following which Active Energy estimates that the forestry to which KAQUO has the commercial rights amounts to in excess of 250,000 hectares, 108,147 hectares of which it has identified as being the most commercially attractive.

The land is well served by existing road and rail infrastructure, and it is intended that it will be the first area of forestry over which permits will be marketed, Active Energy said.

KAQUO has commenced the marketing of the permits for the 108,147 hectares deemed most commercial.

AEG will be conducting a road show in Asia, the Middle East and USA to potential permit buyers.

The plan is for permits to be granted for an upfront fee, after which KAQUO will look to work closely with the permit holders to support their commercial activities, possibly leading long-term to KAQUO acting as a primary customer as part of plans to build a biomass power station on Métis land in Alberta.

"Our initial estimates turned out to be on the conservative side, and I am pleased that today we are able to confirm that we have 34.8 million cubic metres of merchantable timber on the first area that we will be marketing on the upcoming roadshow," said Richard Spinks, chief executive officer of Active Energy and president of KAQUO.

"The income generated from the granting of the permits in this first round is expected to fund the establishment of future commercial opportunities for KAQUO with its Métis partners in Alberta, and create significant value for the Métis Settlements, KAQUO, and therefore for Active Energy Group," Spinks added,

Quick facts: Active Energy Group PLC

Price: 0.525 GBX

LSE:AEG
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