May 23, 2019: Aqua Metals closed a public offering of 11 million shares on May 14. The deal, which was fully underwritten, was priced on May 19 at $2 a share, raising $20.2 million after deductions.
Steve Cotton, chief executive of Aqua Metals (pictured), said that although there had been impressive advances made in production — in particular four modules were operating virtually full time — the board had decided to seek funds earlier rather than later.
“If we waited until later in the year when we had potentially more operational progress to report, we would also have a weaker cash position given our anticipated cash burn rate,” he said.
“However, with this offering’s net proceeds of roughly $20.2 million, we’ve entered the remainder of 2019 with approximately $35 million in cash. With the ability to leverage the $5 million in leasing newly authorized by Green Bank, we have approximately $40 million at our disposal on a go-forward basis.”
There were at least two pieces of positive news that would have attracted investor attention.
The first is that Aqua Metals is “operating up to four of our initial modules on a 24-hour, seven days a week basis,” Cotton told Batteries International, and that was being expanded. Modules five through eight were being brought on line and the process would be repeated until full production was reached with all 16 modules.
“Our goal is to operate all of them on a 24/7 continuous basis by the end of 2019,” Cotton said.
The news that the machines were running full time — rather than being turned off and on — suggests that many of the teething problems of the modules had been solved. Cotton also said that various operational improvements, such as the better recapture of used electrolytes, was also positive.
Cotton later said that if there were sufficient capital next year the intention was to add a further 16 modules.
The second piece of positive news was the tie-up with Veolia, which was concluded at the end of February with Veolia staff working in the Nevada facility in early March.
The fit with Veolia is a good one. Veolia, a worldwide firm, contributes operational and technological expertise and organizational capabilities in aqueous-based process chemistries and electrolysis. It has also taken over management of operations, supply chain, offtake and running of the plant.
Veolia has assumed the primary responsibility for scaling the facility through the remainder of 2019 to the goal of operating 16 modules on a continuous basis. The agreement also provides for Veolia and Aqua Metals to work together to plan in 2019 and complete the expansion of the TRIC facility to 32 AquaRefining modules in 2020.
“We believe the Veolia agreement will allow us to leverage off Veolia’s supply chain and offtake and waste stream buying power and expertise,” said Cotton.
“The intention of the parties is to grow the relationship, where Veolia will serve as our go-to-market execution partner to staff and manage AquaRefining facilities with mutually agreed performance metrics for Aqua Metals and our partners. We expect this will begin with the first facility we deploy with Clarios.”
Cotton said: “Our longer term plan is to pursue two complementary business streams. The first is to supply AquaRefining and supporting equipment to third parties to supplement or replace smelting in their battery recycling operations. We intend to pursue this at least initially through our relationship with Clarios (the former power solutions business of JCI).
“The second is to expand our own lead recycling operations at our plant in Nevada.”