Active Energy Group PLC (LON:AEG) saw its shares leap over 30% higher in opening deals on news it has signed an in-principle deal for a Crown timber licence and forest management with the Province of Newfoundland and Labrador in Canada relating to two Forest Management Districts covering 1.2mln hectares.
In addition, Active Energy said, both parties are evaluating a number of other collaborative opportunities for both the group’s Timberlands subsidiary and Advanced Biomass Solutions PLC, another affiliate company, involving timber processing and the commercialisation of its CoalSwitch product - the world's first 'drop in' biomass fuel.
In early trading, Actve Energy was the market's biggest gainer, up 34%, or 0.78p to 3.03p.
The AIM-listed firm said the timber licence and proposed 20-year forestry management deal is intended to harvest and utilise up to 140,000 solid cubic metres of wood annually from the Forestry Management Districts 17 and 18 within the Province.
WATCH: Active Energy to focus on 'enormous upside' of CoalSwitch and forestry management
The two forestry management districts have a total land area of 1,211,000 hectares on the Northern Peninsula of the Province, close to ocean port facilities, with direct access for shipping routes to Europe.
The group said the agreement will facilitate the management and assessment of multiple commercial possibilities for the forests including commercial logging, saw log merchandising, chipping and the production of biomass products utilising forestry waste.
An “important step in the overall strategy for Timberlands”
Richard Spinks, Active Energy’s chief executive officer, said: 'The proposed agreement with the Province of Newfoundland and Labrador represents an important step in the overall strategy for Timberlands in achieving a new and significant partnership in Canada.
“The Province of Newfoundland and Labrador has been clear in its commitment to the safeguarding and improvement of the regional economy whilst continuing to protect the existing environmental landscape.”
He added: “We believe this Agreement can provide significant benefits to all parties and I look forward to providing AEG's shareholders with further updates as we finalise the Agreement in the coming weeks."
Earlier this month, Active Energy agreed to sell off its WoodFibre operations in Ukraine as part of the new plan to refocus and reorganise its business.
READ: Active Energy to sell off Ukrainian WoodFibre business as it unveils new structure
The firm said it is shaking up its structure in order to focus more on the global roll-out of its CoalSwitch fuel product as well as the development of a forestry management business.
The CoalSwitch product is made from waste wood which would normally be left to decompose following forestry operations.
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