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Active Energy's KAQUO progress noted by broker

Active Energy's KAQUO venture may be able to proceed in January

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KAQUO was formed in July last year to commercialise 108,000 acres of forest

Active Energy (LON:AEG) looks to have removed a “major obstacle” to progressing its KAQUO project, WH Ireland reckons, after hearing from the Alberta Ministry of Aboriginal Relations.

AIM-listed Active owns 45% of the joint venture, KAQUO, which was formed in July last year to commercialise 108,000 acres of Canadian forest.

The land is owned by the three indigenous aboriginal groups (the Métis settlements of Peavine, Paddle Prairie and East Prairie in Alberta).

This week the groups informed AEG that they have received a ministerial order, which specifies certain conditions to be fulfilled, after which the joint venture can proceed.

Active is now in talks with its Métis partners on the terms and is working on a strategy that will enable forestry operations to kick off in January 2016.

“This appears to have removed a major obstacle to the progression of this potentially exciting project,” says WH Ireland's Ian Berry.

“Historically we have assumed no benefit from this venture in our estimates because of the uncertainty surrounding the investigation, strategy and financing process.”

However, the broker reckons it is clear that KAQUO potentially could be a major asset for the group particularly in the context of its current £36m market cap.

“Our estimates are currently under review pending H1 results due at the end of September,” added Berry.

Earlier this week, Active unveiled a new joint venture, AEG CoalSwitch, which will work on what it described as a "revolutionary" new manufacturing process that allows biomass to be burned in unconverted coal-fired power stations.

Quick facts: Active Energy Group PLC

Price: 0.88 GBX

LSE:AEG
Market: LSE
Market Cap: £11.27 m
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