Northstar Clean Technologies (ROOF.V), a Canadian clean technology company focused on the recovery of components from single-use asphalt shingles, announced today that it, along with its wholly owned subsidiary, Empower Environmental Solutions, had signed a binding term sheet for a five-year offtake agreement with McAsphalt Industries.
The proposed deal calls for Northstar to sell and McAsphalt to buy on an exclusive basis, 100% of liquid asphalt production at Empower’s planned scale-up asphalt shingle reprocessing facility in Calgary, Alberta.
McAsphalt, a wholly owned subsidiary of Colas Canada, formed in 1970 with the express mandate of developing, producing, distributing and marketing asphaltic products, related services and technologies. The company, headquartered in Toronto, has 27 facilities across Canada.
The five-year proposed agreement is slated to automatically renew in three-year terms unless either party provides 180 days notice of its intention not to renew.
Pricing for the possible deal is confidential due to commercial sensitivity, but it is market based and includes the market index, quality and location differential, and sustainability premium.
Each company in the transaction can enter into third party sales agreements for the liquid asphalt product produced at the Empower Calgary facility. Any details of third-party sales are confidential.
Both Northstar and McAsphalt will work together to develop an additional life-cycle assessment for Northstar’s proprietary clean technology.
Aidan Mills, Northstar CEO, commented on the proposed agreement, “This Term Sheet is a pivotal agreement and a major milestone for Northstar. With McAsphalt we have a valuable offtake partner that has the strength, capability, resources and operational expertise to help move our business forward. Furthermore, the research and development support we have received from McAsphalt to date has been outstanding. McAsphalt has contributed to the continued optimization of the production and quality control processes at Northstar’s Empower Pilot Facility in Delta, B.C., and to the design of the Empower Calgary Facility. With McAsphalt’s commitment to continue its support, through detailed design, construction, commissioning, and operation of the Empower Calgary Facility, we have a sophisticated partner who will contribute significantly to the success of our commercialization of an industry changing technology.”
The precise terms of the five-year offtake agreement with McAsphalt will be incorporated into a definitive agreement to be negotiated between the two parties.
Ron Vertz, Canadian president of McAsphalt, stated, “We at McAsphalt were very excited the moment we were contacted by Northstar and feel fortunate that we were given the opportunity to work with them on an offtake agreement. As a leader in asphalt technology in Canada we often get calls to look at innovative ideas with most with no commercial application. Everyone is trying to find a way to reduce their carbon footprint, too many companies are looking at carbon offsets and not really addressing the root cause in their own company. Northstar is different, they have a proprietary process that has commercial application and they are addressing the carbon problem, not just green washing.”
In recent news, Northstar announced a strategic partnership to fully fund the company’s phase 1 expansion program.
Currently Northstar trades at $0.24 CAD per share for a market cap of $24.31 million.
