VANCOUVER, BC, April 17,
2023 /CNW/ - Klimat X Developments Inc. ("Klimat X"
or the "Company") (TSXV: KLX), is pleased to announce the
conclusion of the initial bidding process for carbon credits that
will be produced from the first 5,000 ha of the company's Sierra
Leone Rewilding Project. The process attracted 16 prospective
buyers, ranging from trading houses to large emitters that are
seeking a secure supply of carbon credits to meet their Net Zero
obligations. Under the terms for the Phase 1 project, the
large carbon credit buyer ("Buyer") will receive the right to
pre-purchase up to 100% of the credits produced from first 5,000
ha, and includes a right of first refusal to purchase credits from
the remaining 20,000 ha within this first project area. The company
has secured rights to a total of 57,000 ha of land in country and
continues to grow the land base.
Klimat X's innovative development model enabled the Company to
move rapidly from project concept to pre-purchase sales terms with
significant final buyers in 4 months. The Company has 3 additional
projects in Sierra Leone that will
soon be available for pre-purchase under similar terms and has
projects under development in Mexico, Suriname and Pakistan.
Highlights:
- Under the terms of the pre-purchase agreement, the Buyer will
fund Capital Expenditures on the Sierra
Leone reforestation project (the "Project") through upfront
cash payments, that will be repaid through the delivery of
validated carbon credits at a pre-agreed price that reflects a
premium relative to current average prices. The term sheet provides
the buyer with an option to purchase the balance of the tonnes at a
price linked to a relevant carbon price index.
- Based on a near-final version of the Project Design Document
(PD) prepared by Ecosecurities, the initial 5,000 ha project area
is expected to produce approximately 1,400,000 tonnes of carbon
credits over the initial contract period of 20 years. Reforestation
with native species at the project site started in Spring 2022.
Approximately 400 ha has been planted to date with a further 1,000
ha planned for summer of 2023.
- Klimat X's initial investment of USD ~$2 MM into the initial project area is expected
to generate USD $141-211m cumulative revenues over the total lifespan
of the project. Under the option to expand to 25,000 ha, the
company would expect to generate USD $721 MM to $1.08 BB
in cumulative revenues. Recognizing that NPV calculations discount
future revenues significantly, the conservative project-level NPV
is USD $26m with an IRR of 14%.
Scaled up by the additional 32,000 ha the company has secured, the
full project NPV is USD $59m.
- Klimat X anticipates that the term sheet will become fully
binding upon completion of the full transaction agreement; the
company expects to complete this within 5 weeks. Since there was
strong competitive interest in the project, Klimat X has
established a long close date of 15th June to complete
the definitive agreements.
- The project targets Sustainable Development Goals 1, 2, 5, 8,
13 and 15, providing employment in Sierra
Leone to over 2,000 people, reducing poverty through
employment creation and revenue sharing and improving gender
equality by ensuring at least 20% of those hired are women. The
project establishes a new high standard for smallholder carbon
projects in Africa and is based on
independently monitored Free, Prior and Informed Consent
(FPIC).
Klimat X is currently developing 3 projects in Sierra Leone with a total of over 39 MM tonnes
in pipeline carbon credits making the Company the most prominent
carbon project developer in the country. Klimat X is also active in
Guyana, Suriname, Mexico and Pakistan as an asset manager and project
developer.
"The scale and scope of this agreement demonstrates Klimat X's
ability to engage with multi-national companies who recognize and
value our expansive project portfolio," comments Dr. James Tansey, Klimat X CEO. "This agreement
aligns with our commitment to be the trusted jurisdictional-scale
carbon project developer to large buyers. Klimat X is delighted
with this agreement as it validates our development model that is
supported by deep in country relationships. Furthermore, the
agreement funding terms are proof of the Company's ability to
efficiently deploy shareholder capital to generate extended project
cash flow.
About Klimat X
Klimat X carries on the business of developing validated and
verified carbon credits from afforestation and reforestation of
degraded land areas and marine ecosystems, including mangroves, for
sale into international voluntary carbon markets. In contrast to
streaming and royalty companies, Klimat X works upstream as a
direct owner and operator of projects, addressing a key supply
constraint the current market and the rapidly growing demand for
carbon credits in global voluntary and regulated markets. The
Company intends to achieve this by investing in the exploration,
restoration and management of terrestrial and marine systems that
can either be protected to enhance the sequestration of greenhouse
gases or restored from a degraded status to fully productive
ecosystems. Klimat X draws on the experience of a seasoned
executive team and Board that provide access into key target
jurisdictions through relationships in the mining and natural
resources sectors, combined with decades of experience in carbon
markets. Klimat X plans to deploy capital at risk under various
arrangements (including cooperation, assignment and production
sharing agreements) with large land owners and governments in
various suitable jurisdictions around the world.
Reader Advisory
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
This press release contains forward-looking statements and
forward-looking information within the meaning of applicable
securities laws. Any statements that are contained in this press
release that are not statements of historical fact may be deemed to
be forward-looking statements. Forward-looking statements are often
identified by terms such as "may", "should", "anticipate", "will",
"intends" "expects" and similar expressions which are intended to
identify forward-looking information or statements. Klimat X
cautions that all forward-looking statements are inherently
uncertain, and that actual performance may be affected by a number
of material factors, assumptions and expectations, many of which
are beyond the control of Klimat X. The reader is cautioned that
assumptions used in the preparation of any forward-looking
information may prove to be incorrect. Events or circumstances may
cause actual results to differ materially from those predicted as a
result of numerous known and unknown risks, uncertainties, and
other factors, many of which are beyond the control of Klimat X.
The reader is cautioned not to place undue reliance on any
forward-looking information. Such information, although considered
reasonable by management at the time of preparation, may prove to
be incorrect and actual results may differ materially from those
anticipated. Forward-looking statements contained in this press
release are expressly qualified by this cautionary statement.
The forward-looking statements contained in this press release
are made as of the date of this press release, and Klimat X does
not undertake any obligation to update publicly or to revise any of
the included forward-looking statements, whether as a result of new
information, future events or otherwise, except as expressly
required by securities law.
SOURCE KLIMAT X Developments Inc.