Directa Plus PLC (LON:DCTA) has announced an agreement with Italian firm Sartec Srl to jointly develop a commercial-scale industrial system based on the company’s graphene-based Grafysorber product for treating oil-contaminated produced water.
The AIM-listed firm said the agreement follows initial joint research over the last eight months during which extensive tests on the Grafysorber product were successfully carried out.
WATCH: “Grafysorber agreement is the cornerstone of our efforts to grow", says Directa Plus's Cesareo
Under the agreement, the company said, in the second quarter of 2018, Sartec will commence building a pilot plant, capable of treating up to 500 cubic metres per day of processed water and is expected to be completed by the end of the year. Directa Plus will provide support and expertise regarding Grafysorber.
Giulio Cesareo, Directa Plus's chief executive officer said: ”This partnership represents a true technological convergence of our respective capabilities and expertise in pursuit of a common goal.”
He added: “The development of this new continuous process by Sartec is the ideal solution to bridge the gap between our unique Grafysorber product and its application in a huge market.”
Cantor Fitzgerald sees significant operational gearing
In a note to clients, analysts at broker Cantor Fitzgerald said: “We believe the increasingly positive prospects for Grafysorber are underscored by today’s announcement, and would remind investors that the production of Grafysorber is achieved at a low unit cost to the group, hence as volume demand increases the operational gearing should be significant.”
They added: “We would anticipate any future agreements would result in similarly beneficial gearing effects to the Group.”
Cantor Fitzgerald reiterated a ‘buy’ rating and 80p discounted cashflow-based price target on Direct Plus shares, which in early afternoon trading were 4.1% higher at 50.50p.
-- Adds broker comment, share price --