Northstar Clean Technologies (TSXV:ROOF) spikes after securing $43.5-million in funding

Do you ever wonder what happens to old roofing shingles when a new roof is installed?

Most likely, they end up in a landfill somewhere with all the other roofs. Now multiply that by six-million, which is the number of homes re-roofed in the US alone each year.

It’s a big problem. But a Canadian company called Northstar Clean Technologies, which is listed on the TSX Venture Exchange under the symbol “ROOF”, has a solution.

Northstar repurposes roofing shingles through a proprietary design process it calls Bitumen Extraction and Separation Technology (“BEST”). ROOF extracts the liquid asphalt for usage in new hot mix asphalt, shingle manufacturing and asphalt flat roof systems, and aggregate and fiber for usage in construction products and other industrial applications.

The company this week took a big leap forward in turning its concept into a reality by securing $43.5-million in financing via a partnership with Renewable U Energy Inc. The company says the cash will allow it to fund its operation in a shareholder friendly way, with minimal impact on the stock’s cap table.

“Over the last several months, we evaluated detailed proposals from a wide variety of potential funding partners and considered each in considerable detail, both quantitatively and qualitatively,” said Northstar CEO Aiden Mills. “At the end of this extensive process, Renewable U was our most attractive financing option. We are delighted to partner with Renewable U on the strategic financing of our Phase 1 Expansion Program. We believe this financing option effectively advances our strategy of creating stakeholder value by both minimizing dilution and securing debt funding for our first three facilities. With Renewable U, we have a long-term partner that fully understands our business and we now look forward to building a long-term relationship together through the successful delivery of our leading-edge technology. With debt funding for three facilities secured, this not only gives us the ability to fully focus on the delivery of the Empower Calgary Facility, but also progress the development for the following two facilities without the significant distraction of seeking additional funders. Strategically, this partnership provides Northstar with a solid funding platform, which is exactly the outcome we hoped for from our funding process.”

Northstar says it plans to scale up with three new facilities, one in Calgary, another in the Greater Toronto Area, and a third in the Pacific Northwest.

At press time, shares of ROOF were up 21.1 per cent to $0.23.

Disclosure: Northstar is an annual sponsor of Cantech Letter.