VANCOUVER, BC, June 15,
2023 /CNW/ - Klimat X Developments Inc.
("Klimat X" or the "Company") (TSXV: KLX) a company
that 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, is pleased to
announce it has finalized binding commercial terms with a Fortune
100 (the "Buyer") company to pre-purchase carbon credits from the
Company's Sierra Leone Rewilding Project.
- The pre-purchase agreement will cover the remaining capital
costs of the first 5,000 ha of native species planting, with
1,000-1,200 ha of planting anticipated to be completed by the end
of the 2023 season and with the PDD to be validated in
2023.
- The first of three USD
$500,000 payments for 2023
to Klimat X is scheduled for transfer within four weeks.
- Under the pre-purchase financing structure, US$2.5m of investment is repaid in tons of carbon
credits issued at a pre-agreed price by the project. The initial
project area will generate an IRR of up to 20% based on
current modelling assumptions and pricing scenarios.
- The Buyer has the option to purchase the balance of the 75-80%
of the carbon credits from the first 5,000 ha of planting at small
discount to a mutually agreed carbon index price that reflects the
scale and volume of high-quality reforestation projects in the
market.
- The Buyer has a time limited Right of First Offer to
pre-purchase credits from the remaining 20,000 ha within the
project area.
- The Company has committed to produce and validate the credits
under the highest standards of the Verra protocol, including
their Climate, Community, Biodiversity standards (CCB).
- The Company is committed to equitable revenue sharing
arrangements with local smallholders and a transparent Free
Prior and Informed Consent process monitored by Namati, an
independent third party non-governmental organization.
- Project implementation will restore degraded forest land owned
by smallholders, providing income from carbon markets and
providing employment to thousands of seasonal workers in a region
with high unemployment and incomes below the poverty line.
- The first 5,000 ha is anticipated to produce 1.6-1.9m tonnes of carbon credits during the first 30
years, and over the full lifespan and scale-up of the project,
it has the potential to produce up to 15m tonnes of credits from 25,000 ha. Independent
carbon market forecasts for restoration projects of this type
indicate pricing of USD20-30/ton as
demand grows for high quality credits. The IMF states that
prices as high as USD$75 per tonne
are needed by 2030 when considering regulatory and voluntary
markets.
- Recent research continues to indicate rapid growth in the size
of the carbon market, with Boston Consulting Group predicting
five-fold growth by 2030.
- The project is the first of its kind in Sierra Leone and a model for carbon finance
and social development across the region.
This major commercial milestone for Klimat X proves the
Company's investment thesis that large-scale jurisdictional
projects can be developed and pre-sold to wholesale buyers seeking
to meet their Net Zero obligations. The milestone demonstrates that
the company can use its equity to de-risk projects to the stage
draft PDD stage where the execution risk can be shared with the
world's largest corporate clients.
The commercial agreements have been submitted for final
signature by both parties and the first three payments to Klimat X
of USD $500,000 are scheduled for the
balance of 2023. Approximately 400ha were planted in 2022 and
planting of a further 800-1,000ha is already underway.
Dr. James Tansey, CEO of Klimat X
stated 'Klimat X has designed its projects to meet the needs and
expectations of large corporate buyers who are willing to share
investment and operational risk with our company. These final
commercial terms demonstrate that our model can produce significant
volumes of saleable credits through jurisdictional projects. We
have the potential to expand the rewilding and mangrove operations
that are currently underway across Sierra
Leone and the region. These projects have already attracted
commercial interest from multiple parties. We are expanding our
footprint in West Africa and have
additional projects under development in Yucatan, Mexico and Suriname. We are proud to
be developing projects that provide both ecological and economic
benefits to the world and our shareholders as one of the few
impact-focused listed companies.
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 will draw on the experience of a senior
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 landowners and
governments in various suitable jurisdictions around the world.
On behalf of the Board of Directors
"James Tansey"
James Tansey
Chief Executive Officer
Cautionary Note Regarding Forward Looking Statements
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 (collectively "forward looking
statements") 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. More
particularly and without limitation, this press release contains
forward looking statements and information concerning the future
generation of revenues from the sale of carbon credits to a large
corporate client and the ongoing business of the Company. 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 including expectations and
assumptions concerning the Company and future carbon pricing,
operational risk from rewilding activities, political instability,
pest and natural hazard events, supply chain challenges, and other
broad market and geopolitical threats. A full disclosure of the
risks is provided in the company's filing statements. 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.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities in any
jurisdiction.
SOURCE KLIMAT X Developments Inc.
