EDEN INNOVATIONS LTD — Call Transcript 2011

Jan 12, 2011

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AUSTRALIAN SECURITIES EXCHANGE ANNOUNCEMENT

13 JANUARY 2011

BoardRoomRadio.com AUDIO BROADCAST

EDEN ENERGY LIMITED (EDE) provides the opportunity to listen to an audio broadcast with Mr Greg Solomon, Executive Chairman in a presentation titled "Eden's scaling up process is underway for the Pyrolysis project - Gregory Solomon, Executive Chairman" .

To listen , copy the following details into your web browser: brr.com.au/event/ 72747

The presentation details are as follows:

• Eden's scaling up process is underway for the Pyrolysis project - Gregory Solomon, Executive Chairman

• Presented by Mr Greg Solomon, Executive Chairman

• Thu, 13 Jan 2011 11:00am AEST

Transcript

RADIO INTERVIEW WITH GREG SOLOMON, EXECUTIVE CHAIRMAN, EDEN ENERGY ON TUESDAY, 11 JANUARY 2011

Q1 Hello and welcome to Boardroomradio. Today I’m joined by Mr Greg Solomon, who is the Executive Chairman at Eden Energy. Greg, very nice to be speaking with you once again.

• A1 Thank you very much, Tom. Yes, it’s always nice to be back.

Q2 Greg, back on 5 January, you announced your quarterly report to the ASX. It was obviously well received by the market; we’ve seen some good share price movement on the back of it. Can you take us through some of the key highlights of the report?

A2 Sure. In terms of the various projects that we’ve got, we had some updates in relation to the gas project in the United Kingdom, which is looking very interesting. We’ve got some movement in relation to spinning that out as a separate company and they’ve got some interest from parties that may well be coming in and providing significant funding to develop that and that’s got potential as a very large gas play – a European gas play

Level 40 Exchange Plaza, 2 The Esplanade, Perth, Western Australia, 6000 Telephone: (08) 9282 5889 Facsimile: (08) 9282 5866 Website: www.edenenergy.com.au

The OptiBlend Dual-Fuel Project is looking very interesting. We’ve done a couple of installations now in India, got very good results and these are major companies that have multiple installations and once they’ve trialled it and they’re happy with it, we see it as likely to result in a lot of sales which could well lead to a long term sustainable cash flow that we’re hoping will get us to cash flow neutral or cash flow positive maybe within the next 12 months. We’ve certainly got interest in the United States, on that as well.

On the hydrogen and the Hythane side, things are still moving along, although they certainly have moved much slower than we would have liked, both in the United States and India. In the United States- in San Francisco- the project was held up for about six or nine months while they were trying to get some funding for an electrical sub-station that was required and that’s in place so we think that will happen now, but again, I haven’t been holding my breath on exactly when it is going to occur. Same in India; we’ve got two Hythane Projects in India; one in Mumbai, and another one in Gujarat and the problem in both of those cases is that the projects have taken longer to happen than we would have liked. There’s been a change of senior personnel in both cases – both companies and the new personnel come in and – tighter economic times and they have wanted to review and reconsider their involvement. But its going forward, Gas Authority of India is still very positive and pushing this but it’s certainly taking longer.

But the really lead story I think that came out of the quarterly, and I think has been the cause of most of the interest in terms of the share price has been the Pyrolysis Project; the carbon hydrogen production from natural gas.

Q3 Yes, certainly seems to be the part of the report that has got everyone’s attention. Can you take our listeners through what has been happening there, and specifically in relation to the scaling up process that I understand is underway?

A3 Yes, Tom. The Carbon Pyrolysis Project is a project that we started with the University of Queensland some four or five years ago.. It came out of a discussion with a leading scientist from UQ about developing a process to produce hydrogen and solid carbon from natural gas without producing any carbon dioxide as a byproduct, which is the usual process.

We applied for and we obtained a half a million dollar grant from the Australian Research Council and with that, plus company funding and some funding from the University, we developed this process and we got some fantastically encouraging results for production of hydrogen and solid carbon. We then set about analysing the carbon and low and behold, we found that the carbon that we were producing was in the form of both carbon nanotubes and also these carbon fibres.

Now, carbon fibres are long sticks of very, very fine, very small particles of carbon, but the carbon nanotubes in particular, are things that are shaped at an atomic level something like chicken wire, but they’re extraordinarily small; down to the size of maybe 100 or 200 millionths of a millimetre. But they are 200 to 300 times as strong as steel and over the last 5 or 10 years, there’s been an enormous growth in the industries around this, looking for various applications for this stuff, so we were very keen to pursue this.

We announced a possible joint venture with Indian Oil about a year ago in February last year which we had negotiated for a long time, but that still was too slow to push forward, so in June last year, we took a decision that we would take up the project ourselves.

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We bought out the University of Queensland’s interest and we took the technology across to the United States and that’s where we set about building all of the equipment necessary to actually scale this project up. So since July 2010, we have actually built a full laboratory at our facility in Denver, Colorado for the production of the catalyst ad we’ve also done two scale ups in terms of the equipment.

The first was a single batch process, where we looked to expand the size of the unit so that we could produce more than what they were producing at the University of Queensland and we could ensure that we had the whole technology fully transferred. We had support from the guys from the Queensland University and they went over and they spent time over in Denver assisting in this process. Once we were confident that we had that sorted out, we then designed and set about fabricating a process for continuous production and this was again a further scale up of about 10 times, I think, maybe 15 times the size of the batch process and just before Christmas, we actually achieved a continuous production of both the carbon fibre and the carbon nanotubes on this continuous production unit.

The process, essentially, is that at one end you have natural gas going in, which is CH4; methane; one carbon atom and four hydrogen atoms and it’s heated and it comes in contact with this catalyst, and that’s why the catalyst is also important and the carbon separates from the hydrogen; the hydrogen comes off as the gas that can be collected, and the solid carbon comes off. Depending upon the form of catalyst as to what form of carbon you produce, whether you produce it in nanotube form or you produce it in these little sticks called carbon fibre. So, we’ve now got two parts to our industry; one is developing the catalyst so that we can optimise the products we produce; and secondly looking at the products themselves both in terms of the hydrogen and also the carbon.

In relation to the carbon in the process we’ve been looking very much at the commercial aspect and there is already a market emerging in Unites States, in particular, and also in Japan and Europe for carbon nanotubes and there’s a number of commercial distributors of this material. We’ve actually placed our material with them, and we’ve had some preliminary feedback. Because this material is so small, you can’t actually just look at it and assess it, you have to analyse it and they use a process called TEM, which is a transmission electron microscope, or an SEM, a scanning electron microscope to actually take images, like photographs of these molecules, literally down to the molecular level and you can see these little tubes, so that’s one way of actually identifying what you’ve actually produced. There’s also another process called Raman Spectroscopy, where you can actually analyse it and you can get a chart that actually represents what the chemical structure, or the molecular structure of the material looks like. We’ve done both of those things and our product looks like – yes -it’s the real thing. It looks just like what the market is looking for so there’s images of - and certainly the photographs of the carbon and of the nanotubes on our website with the last ASX quarterly report.

There’s been a lot of development by other major companies. One of the leading companies in the world that’s really pursuing this is Bayer, the big European chemical manufacturer and on their website, you can see they are actually in the process of building, and I understand they’ve completed now, a 200 tonne a year carbon nanotube production unit. They use an entirely different process and they’re planning a 3,000 tonne a year production unit. One of the advantages that they have found is that by adding about one percent of the carbon nanotubes to concrete, you can increase the compressive strength of concrete by about 45 percent. On their website you can see a photograph of a concrete canoe with a couple of guys sitting in it and the concrete canoe is so thin but so strong that it

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can actually be light enough to float and I think that was just to show that you’ve got this great strength that it becomes very much smaller.

So, that’s just one of the sorts of applications. We also see similar sorts of applications emerging, perhaps the use in production of car tyres, were you could use the nanotubes instead of the normal carbon black that they currently use, to produce much longer lasting and tougher tyres and also in other areas of the construction industry where you mix it with composite – with plastics - to produce composite material that you could use for a very wide range of materials in substitution for steel, aluminium and what have you.

So, that’s partly what we’re doing at the moment. We’ve set about commercialising the product and getting a full value on what we are producing, and secondly we’re planning to do a further scale up during 2011 to what we anticipate will be a small commercial scale pilot production unit and at that stage, we’re hoping we’ll have a serious commercial product available, both in terms of our catalyst, our equipment and also the products that we’re producing.

The interesting point about all of this, is the Hydrogen comes out as a very, very cheap or free by-product, because the real value in this at the moment is in the carbon and that is where we come the full circle because the major stumbling block in terms of the progress of Hydrogen and Hythane in the market place is the cost of the Hydrogen and if we can actually start producing the Hydrogen very cheaply or even free because it’s subsidised by the cost of the carbon, all of a sudden it opens up the rest of the technology. So it’s a very, very interesting scenario that’s emerging at the present time.

Q4 Excellent, it certainly sounds like that and we really appreciate all of your time today.

A4 Thank you very much, Tom.

INTERVIEW CONCLUDED

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Gregory H. Solomon Executive Chairman

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