Cielo’s Management Changes, Aldersyde Waste-to-fuel Production Updates

June 19, 2022 |

From Canada comes news of several changes for Cielo Waste Solutions who you may know as the waste-to-fuel tech company. CEO and COO Gregg Gegunde resigned as did Chris Sabat as Chief Legal Officer and Corporate Secretary. Anna Cheong, who was acting as interim Chief Financial Officer, returned to her position as Controller and an interim CEO and CFO have been appointed by the Board. But management musical chairs isn’t the only news – Cielo reports several Aldersyde production updates of interest too.

In today’s Digest, waste-to-fuel Aldersyde facility updates, forecasted production changes, the people on the move, and more.

Management musical chairs

People are always on the move but here’s the latest on Cielo’s management moves.

Gregg Gegunde resigned as Chief Executive Officer and Operating Officer. The Board appointed Ryan Jackson as interim Chief Executive Officer. New interim CEO Ryan Jackson is a seasoned business executive with over 30 years of experience and a member of the Institute of Certified Management Consultants of Alberta, has been a director of Cielo since May of 2021. Jackson said, “The strong foundation that has been built by Gregg and Chris has positioned Cielo for success well into the future. I am excited to continue to lead the execution of the strategy with the extremely strong team that Gregg has built during his time with the Company.”

Chris Sabat resigned as Chief Legal Officer and Corporate Secretary. No word on his replacement.

Anna Cheong, who was acting as interim Chief Financial Officer, returned to her position as Controller. The Board appointed Jasdeep K. Dhaliwal, a Chartered Professional Accountant, as interim Chief Financial Officer. Dhaliwal has extensive experience in risk management, financial reporting process and internal controls and has been a director of Cielo since April 2021 and formerly the Audit Committee Chair.

On behalf of Cielo’s Board of Directors, Larry Schafran, Board Chair, said, “We thank Gregg and Chris for their dedication since Q3 of 2021 in strengthening Cielo’s engineering and corporate governance foundations. Their leadership and contributions have been transformational for Cielo in working towards its vision of aspiring to lead the waste-to-fuels industry using environmentally friendly, economically sustainable technology. The Board also expresses its appreciation to Ms. Cheong for her ongoing commitment to the organization.”

Echelon Wealth Partners to help with Interim team

Cielo engaged Echelon Wealth Partners Inc. as its Financial Advisor to assist the Interim Management Team and the Board of Directors with evaluating a number of potential financing alternatives to further advance various capital development projects, including at Aldersyde.

Aldersyde production update

Speaking of Aldersyde, we haven’t heard much lately about that facility but there are some updates to report from there too.

Process heat from Inline electric heater – As the Aldersyde Phase 1 facility has continued to operate, Cielo has continued to modify and improve the design. Aldersyde Engineering, Operations and Maintenance have been making such improvements, and as a result are repairing the inline heater. The heater is expected to be available by June 20, 2022, at which time low-rate steady state operation is expected.

Waste management system – A change in feedstock dimension was recently implemented to further improve the process, which resulted in improved distillate quality but impacted solid settling characteristics. Operations strategy and piping modification was required to manage the waste stream due to changed solids settling characteristics. Interim operations have been positive, resulting in improved used motor oil recovery from reactor bottoms and reduced waste production.

Forecasted production – Aligned with previous news releases on May 12, 2022 and April 18, 2022, the primary focus of Aldersyde is to improve reliability, distillate quality, and better understand constraints so that learnings can be applied to the research facility design and future full-scale facilities. Moving forward, Management will no longer focus on or provide guidance on feed production numbers as the current Aldersyde facility is uneconomical and these numbers are not required to achieve the previously mentioned objectives.

Cielo’s plan is to achieve steady state production over a 10-day period followed by a planned outage to inspect equipment. Following each steady state production cycle, operations and engineering will evaluate the run, and apply learnings for future trial runs with modified process parameters.

Check out their latest slide guide “It’s all a bunch of garbage! You mean, valuable fuel: The Digest’s 2021 Multi-Slide Guide to Cielo Waste Solutions” here.

Back in May, Cielo announced a revised capital allocation plan to meet its commercial waste-to-fuel facility development goals. They said “the fiscally prudent measure to pause Aldersyde Phase II development was being taken to mitigate the inflated cost of materials, equipment, labour, and services in the current market. Recently issued pre-construction cost estimates of approximately $18MM to $20MM represent an increase of at least fifty percent, with further escalation a distinct probability.”

So their revised plan was to continue to focus near-term capital investment on the previously announced 60-litre per hour, R&D demo facility. “This change will reduce exposure to the inflationary cost environment while progressing the Company in the quickest and most cost-effective way to the design of a large-scale commercial facility. Crucially, this path forward will generate data for detailed economic models that will capture waste infeed composition, production volume, pricing, and capital costs to facilitate near-term design of full-scale commercial facilities.”

Bottom Line

Cielo pointed out back in May that their corporate strategy continues to be the commercialization of its waste-to-fuel technology and the near-term focus is to profitably produce diesel, naphtha, and kerosene from multiple feedstock waste materials. They also noted that “The Aldersyde Facility has been useful to identify the limiting conditions that have historically prevented continuous production. This has given the technical team significant verified data to support the basis for the design of the 60-lph facility.”

Cielo now anticipates the commissioning of the 60-lph R&D Facility in Q3 2022 and the initiation of the design of a full-scale facility to commence in 2023, so stay tuned.

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