Joe:
News release: Looks like Vanteck has now control of the Pinnacle Board.
Regards
Dan
Vanteck to acquire interest in Pinnacle VRB
Vanteck (VRB) Technology Corp VRB
Shares issued 19,770,445 Jan 12 close $1.20
Mon 22 Jan 2001 News Release
Mr. Rodney Duncan reports
Vanteck (VRB) Technology's major shareholder Federation Group Limited, an
Australian Stock Exchange-listed company, which holds approximately 50 per
cent of the company's share capital, has become the largest shareholder of
Pinnacle VRB Limited, which is also an ASX listed company following
Federation's share exchange takeover bid for Pinnacle. Pinnacle is at arm's
length to Vanteck.
As a result, Pinnacle, on Jan. 19, 2001, appointed four Federation/Vanteck
nominees to the board of Pinnacle. In this respect, John Fraser and David
Lenigas of Federation and Dr. John Hawkins and Rodney Duncan of Vanteck
were appointed as directors of Pinnacle. John Fraser is also a director of
Vanteck. Pinnacle will retain four board positions.
Pinnacle holds all of the intellectual property and patent rights to the
Vanadium Redox Battery (VRB)/Vanadium Energy Storage System (VESS)
technology subject to licences with Sumitomo Electric Industries,
Mitsubishi Chemical Corporation/Kashima Kita Power Corporation and Vanteck
which holds all rights, title and interest to the technology for the
continent of Africa.
Vanteck acquisition
Vanteck is pleased to report that it has reached an agreement with
Federation to acquire from Federation its interest in the issued shares and
options of Pinnacle that in the total will represent 19.99 per cent of the
then issued capital of Pinnacle. Federation has also agreed that subject to
Australian corporation law provisions it will also assign to Vanteck the
balance of its interest in the Pinnacle Securities.
Federation currently holds 4,309,262 (approximately 11 per cent) of
Pinnacle's common voting shares, 7,033,895 (approximately 48.65 per cent)
of Pinnacle's OA options exercisable until Feb. 1, 2001, at 20 Australian
cents per share and 351,785 (approximately 5.10 per cent) of Pinnacle's OB
options exercisable until Jan. 31, 2002, at 20 Australian cents per share.
The cost to convert the Pinnacle OA and OB options into common voting
shares is $1,477,136 (Australian)/$1.25-million (Canadian).
Federation/Vanteck's initial joint position in Pinnacle's common voting
stock is subject to the exercise of the OA and OB options currently held
outside of those held by Federation/Vanteck, particularly the OA options
which expire Feb/ 1, 2001.
To acquire options and common shares of Pinnacle from Federation, which
will represent 19 to 99 per cent of the issued share capital of Pinnacle,
Vanteck will issue three million treasury shares to Federation at a minimum
deemed price of $1 per share. The number of Vanteck shares will be based on
the number of Federation shares issued based on the weighted average market
price of Federation's shares throughout the period of the offer for
Pinnacle's voting shares and options, and the majority of Pinnacle's direct
out-of-pocket cash costs. Subject to Australian corporations law
provisions, Vanteck will also acquire the securities of Pinnacle which
represent greater than a 19.99-per-cent interest. At that time Vanteck will
issue to Federation additional treasury shares determined by dividing
Federation's cost by the then market price of Vanteck. On completion
Vanteck will become the largest single shareholder of Pinnacle.
Vanteck financing
Incidental to the foregoing, the company has agreed to a brokered private
placement through Pacific International Securities, Inc. of up to
$2-million at a price of $1 per unit, and a non-brokered private placement
of up to an additional $325,000 at a price of $1 per unit. Each unit will
comprise one share and one non-transferable share purchase warrant. Each
warrant will be exercisable over a period of one year from closing at an
exercise price of $1. A commission on funds raised in the non-brokered
private placement of 7.5 per cent will be paid to Pacific International
Securities, Inc. in cash or shares, of Vanteck at PI's option. In addition,
the agent will be issued non-transferable share purchase warrants
(entitling the agent to purchase up to 16 per cent of the brokered private
placement amount for one year from closing at an exercise price of $1, and
an additional 50,000 units as a corporate finance fee. Units and warrants
to be issued to the agent will have the same attributes as the units
offered in the private placement. The securities issued will be subject to
a four-month hold period.
The proceeds of the private placement will be used primarily to provide
Vanteck with the necessary funds to exercise the Pinnacle OA and OB options
convertible into voting shares of Pinnacle. The funds, on exercise of the
Pinnacle OA and OB options will go into the treasury of Pinnacle.
The Federation/Vanteck Pinnacle share agreement which will give rise to
Vanteck's equity position in Pinnacle along with the Federation/Vanteck
Pinnacle board positions will enable and facilitate a unified approach to
the international adoption of the VRB/VESS technology. The market for
non-traditional energy storage, particularly to electricity utility
suppliers and their customers, is rapidly growing. As a consequence of
deregulation, restructuring and increasing demand, the opportunity to
exploit the VRB/VESS technology is quickly expanding, providing the company
with an opportunity to capitalize on the market's urgent need for energy
storage and quality power.
The VRB/VESS technology
The VRB is a unique patented electrochemical energy storage technology with
technical performance characteristics and cost competitiveness against
conventional energy storage technologies such as lead-acid and
nickel-cadmium battery technologies. The VRB technology is most suited to
stationary energy storage applications.
Stationary applications include power stations, the telecommunications
sector (power back-up systems) and alternative energy generators such as
wind farms. As electricity cannot be stored on a large scale, power
stations for example, require expensive surplus generating and distribution
capacity to meet peak demand. In the power industry sector the VRB is a new
enabling technology that can effectively store electricity on demand. The
VRB improves power reliability, power quality and will reduce costs for
such applications as load levelling, peak shaving etc. as well as providing
essential uninterruptible power systems (UPS). The VRB technology is safe
with low ecological impact. It uses conducting plastic electrodes and
contains no heavy metals such as lead, nickel, zinc, cadmium etc.
The VRB is referred to as a reduction/oxidation (redox) flow battery.
Energy is stored chemically in two forms of ionic vanadium in acidic liquid
electrolyte. The VRB consists of a number of flow cells (stacks).
The electrolyte is pumped from separate storage tanks into each of the flow
cells. The two different forms of the electrolyte remain separated by a
proton exchange membrane (PEM). In doing so, one form of the ionic vanadium
is oxidized and the other form reduced, the resulting current is collected
by electrodes and available to an external circuit. The electrochemical
reaction is reversible so the VRB can be charged and discharged. The
concentration of each ionic form of the vanadium electrolyte changes as the
VRB is charged and discharged with electrical energy being converted to
chemical energy and vice versa.
The VRB technology is significantly enhanced through the Vanadium Energy
Storage System (VESS). VESS integrates the VRB into a very practical energy
storage system, wherein the design and operating characteristics of the VRB
are optimized and integrated with automated intelligent control and
operational management electronics. The VESS arrangement leverages the
storage attributes of VRB technology and provides: practical energy storage
for new applications previously thought to be not cost-effective or
achievable with lead-acid technology; storage in terms of energy and power
transfer (rather than the traditional approach to standby energy storage in
terms of charge and discharge line voltages); instantaneously increased
autonomy time by the introduction of additional charged electrolyte;
multiple output power capabilities to service different line voltage
requirements at the one installation; systems that can be charged and
discharged simultaneously; operation with one or more electrical inputs and
outputs at multiple voltage levels; beneficial operational and replacement
options for existing DC power infrastructure such as -- every cell is in
the same state of charge, self-controlled to provide automated
self-regulation and self-protection, extremely low level of maintenance,
longer life, with partial replacement of some components after five to 10
years, energy storage can be incrementally added at any time, with a cost
of about 20 per cent of lead-acid.
Vanteck activities, South Africa
As previously reported TSI/Eskom of South Africa has agreed to trial for
purposes of uninterruptible power supply (UPS) an initial 250 to
520-kilowatt/hour constant power VRB connected to a 400 VAC line in Cape
Town, South Africa, along with a range of other power utility application
tests. The TSI/Eskom VRB-UPS power system application trial demonstration
test is to protect sensitive load equipment against short duration dips and
line interruptions, and to improve line power quality. Installation and
commissioning is scheduled for the first quarter of 2001. The cell stacks
for the TSI/Eskom unit are being supplied by Sumitomo Electric Industries
Ltd. (SEI) Japan. Witness testing by Vanteck's technical consultants,
Telepower Australia, of the cell stacks at SEI's Osaka, Japan, works is in
progress prior to Vanteck's acceptance of the stacks and the shipping of
the stacks to South Africa. The other components, apart from the cell
stacks, required for the 250 to 520-kw/hour UPS trial demonstration unit
will be secured primarily in South Africa in conjunction with Vanteck's
alliance partners. The vanadium electrolyte will be manufactured jointly by
Vanteck and Highveld Steel and Vanadium Corporation. The installation site
and the major electronic equipment will be supplied by TSI/Eskom and the
project co-ordination will be undertaken by Vanteck's primary technical
consultants, Telepower Australia. SEI will assist with the installation and
the commissioning of the unit.
SEI is a leading supplier of electrical transmission and distributed
equipment to power companies worldwide. SEI has maintained a strong
interest in VRB technology since the early 1990s and is a licensee of the
technology from Pinnacle VRB Limited, Australia, for stationary
applications in Japan. SEI have successfully built demonstration scale
units primarily for grid load levelling applications in Japan and are now
building and installing commercial scale units in Japan. The most recent
commercial application is a 1.5-megawatt uninterruptible power supply unit
which is currently being installed for an SEI customer.
Eskom is the fifth-largest power utility in the world and the dominant
South African power utility supplying approximately 95 per cent of the
country's electricity requirements which amounts to more than half of the
electricity generated on the African continent. Eskom has 26,461 kilometres
of transmission lines which span the entire country and carry power to
neighbouring countries. As a member of the Southern African Power Pool
(SAPP), which consists of 12 national utilities, Eskom also supports the
development of a southern African transmission grid to encourage
co-operation and accelerate economic growth in the region.
As part of Vanteck's commercialization strategy for the VRB technology in
South Africa and the African market, Vanteck, as previously reported (see
Stockwatch dated Aug. 11, 2000), has entered into a tripartite heads of
agreement with TSI-Eskom and Highveld Steel and Vanadium Corporation
Limited of Witbank, South Africa.
Highveld is a substantial steel and ferro-alloy producer and is the largest
producer of vanadium in the world. (The company, as reported by its news
release in Stockwatch April 28, 2000, has a separate alliance agreement
with Highveld.)
The Vanteck, TSI, Highveld alliance has been formed for the purpose of
among other things: i) having TSI identify and host certain demonstration
trial sites for Vanteck's Vanadium Redox Battery (VRB)/Vanadium Energy
Storage System (VESS); ii) establishing through demonstration trials the
further development of the technology as an energy storage system for the
South Africa and African market for which TSI operates; and iii) providing
a framework for the parties to bring together their particular strengths
and credibility, as well as their technical and operational resources with
respect to the commercialization of the technology.
The private placement and acquisition from Federation of its Pinnacle
position is subject to Canadian Venture Exchange acceptance. |
