Alpha Prospects Limited

Active Energy Update
October 24, 2014

Active Energy Update

Alpha Prospects Plc, the investment management company listed on the GXG Exchange, focussed on companies with fast growth and/or recovery prospects, is pleased to inform shareholders of an update issued by its investee company Active Energy Group Plc (AIM: AEG.L ).

Further to its announcement on 18 July 2014 AEG, the London Stock Exchange AIM-listed international supplier of Biomass for Energy (BFE) fuel products, industrial wood chip, and forestry management and development services has announced the completion of the forestry sampling programme and the commencement of arketing of the first round of permits. In July it announced that it had entered into an important new joint venture to exclusively commercialise mature forestry assets in Alberta, Western Canada.

Key Findings:

  • The total land bank area sampled was 108,147 hectares
  • Average overall density of timber in the area sampled was 322.16 m3/hectare
  • No signs of timber diseases or beetle infestation
  • Total estimated merchantable softwood timber was 12.0 million m3
  • Total estimated merchantable hardwood timber was 22.8 million m3
  • Total estimated merchantable timber was 34.8 million m3

AEG’s joint venture partners are three indigenous aboriginal Canadian groups: the Alberta M�tis Settlements of Peavine, Paddle Prairie and East Prairie, owners of the forestry assets, and Grand Chief Ronald M. Derrickson of British Columbia.

KAQUO Forestry & Natural Resources Development Corporation (“KAQUO”), a joint venture company in which the Group has a 45% equity interest, was formed to ommercialise the forestry assets as agent on behalf of the M�tis Settlements. In addition, the shareholders of KAQUO appointed Richard Spinks, CEO of Active Energy Group, as President of KAQUO.

Over the last two months AEG has, alongside independent experts Renewable Logistics Systems Inc. of Wilmington, NC, completed a forestry sampling programme on behalf of KAQUO. The Group now estimates that the forestry which KAQUO has the right to commercialise amounts to in excess of 250,000 hectares, 108,147 hectares of which it has identified as being the most commercially attractive.

The hectarage 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.

Samples were taken from over 150 plots within the 108,147 hectares. Data collection was achieved through timber cruising, a procedure that estimates the inventory by plot. A series of random plots were established, each representing one observation in a series of observations that were subsequently analysed with inference statistics tools to estimate the desired metrics. Both fixed radius and variable radius plot areas were employed in determining the area sampled.

Following completion of the forestry sampling programme and confirmation of the quality of the timber, KAQUO has commenced the marketing of the permits for the 108,147 hectares. Such permits will be granted following satisfaction of all applicable legal and regulatory processes.

As a pre-requisite to any permit being granted, investors will be required to satisfy certain conditions, including implementation of, and adherence to, short- and long-term sustainable forestry stewardship practices to replenish stocks for the future. In addition, issuance of Permits will require a commitment to local employment and community welfare, as well as abiding by all applicable M�tis Settlements and Alberta provincial environmental and forestry regulations.

On behalf of KAQUO, AEG will shortly be conducting a roadshow to prospective investors in Asia, the Middle East and USA to market either a single permit for the entire area of 108,147 hectares, or several permits covering in excess of 27,000 hectares each.

Commenting on today’s statement, Richard Spinks, CEO of Active Energy Group and President of KAQUO, said:

“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 m3 of merchantable timber on the first area that we will be marketing on the upcoming roadshow.

“The sampling that we have just completed has shown that the forestry assets contain good quality timber, slightly weighted towards hardwood, with access to rail and road infrastructure. This combination has already proven to be attractive, a fact reflected in the good level of investor interest in obtaining permits from KAQUO.”

Company website:


Alpha Prospects
Christopher Foster
+44 (0) 7525 688 741

Lothbury Financial Services
Michael Padley
+44 20 3290 0707

Editors’ Note

About Alpha Prospects

The Company’s strategy is to make investments in companies with fast growth and/or recovery prospects. Typically the companies in which Alpha Prospects will invest are in the small and micro-cap sector and the Company’s interest in its investments is proactive. Currently Alpha has 11 investments.

The Directors are responsible for the contents of this announcement.

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