ASX:LER – Leaf Resources – Turning Waste biomass into useful stuff cheaper than anyone else

Leaf Resources
15 April 2015

Corporate Snapshot

Market Cap 19.2M (as of 15 April 2015) (20M fully diluted)
Share Price: $0.17
Cash @ Dec 14 $ 1.8 M

What do they do:
-own a patented technology for simple, innovate, low cost method of turning biomass into cellulosic sugars at a lower cost and cleaner sugars – call Glycell
-the sugars are the building blocks for many other bio based products (plastics, chemicals, fuels)
-35% cost advantage over other technologies
– Market for these bio based chemicals is expected to be $500B by 2017, Bio plastics $2B in 2011 (fossil based plastics is 75 times larger), Biofuels $83B in 2011
– lower cost cellulosic sugars improve economics against petroleum based chemicals
– virtually every petroleum based chemical can be replaced by biomass
– current worldwide bio waste is 5 Billion tonnes

Story so far
– has been listed since 2006 and developing the technology
– at a point now where it is starting to commercialise with production trials etc
– recently had a capital raising so it seems like they are in need of cash

Reasons to get on Board
– increasing shift away from fossil fuel products
– great technology
– no capex requirements – able to licence technology

Reasons to NOT get on board
– run out of cash
– can’t sell their product
– how will the bio products market fare over the coming years especially with low oil prices

My thoughts
still a very speculative buy but if they can get some key agreements in place and revenue coming in through the doors then it will propel the price

Verdict – Speculative buy at 15c-16c

As always This column is the personal opinion of the writer and does not imply any stock recommendations or offer financial advice. Readers should do further research of their own or talk to their adviser before acting on themes in this article. All prices and analysis at the Date of publication at the top of the post


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