Targeted Microwave Solutions harnesses microwave energy to revolutionize industrial material processing

For Targeted Microwave Solutions Inc (CSE:TMS), unique technology and a strong corporate profile is clearly resonating with investors…  
In short, the company’s technology involves the application of microwave energy to dehydrate and process coal, as well as a wide range of industrial materials and aggregates.

“What sets your company apart?”

It is the question all investors want answered before deciding to put their hard-earned money to work in a specific stock – essentially, why should I buy your shares instead of another company’s shares?

For Targeted Microwave Solutions Inc (CSE:TMS), unique technology and a strong corporate profile is clearly resonating with investors.

As of August-end, the company led the Canadian Securities Exchange for capital raised in 2015, having added C$11.85 million to its treasury in January.

Despite being a relatively new listing on the CSE, Targeted Microwave Solutions is already a standout in the emerging-technology sector, commissioning a C$5 million demonstration processing plant in July that features its proprietary microwave beneficiation technology.

The Targeted Microwave Solutions team includes founders and senior executives from NYSE, NASDAQ, and TSX-listed companies that collectively bring a robust background in technology research, development, and commercial deployment.

It is a pretty strong basis for an emerging company, but once you know what the team is working on it is easy to appreciate why the technology and its objectives are attracting successful people and large investors.

In short, the company’s technology involves the application of microwave energy to dehydrate and process coal, as well as a wide range of industrial materials and aggregates.

The technology aims to replace conventional thermal processes in the food, wood, clay, and mineral processing sectors that perform the same function by heating materials from the outside in using large kilns or ovens.

Targeted Microwave Solutions believes that the unique ability of microwaves to dehydrate materials from the inside out, with much higher efficiency, is what will make its technology a very attractive alternative.

Although the company believes its technology may have potential applications to a wide variety of industrial markets, it is primarily focused on processing high-moisture sub-bituminous coal.  To understand why, a little background is in order.

Most people are probably unaware that coal-fired plants are the leading source of electricity in many countries.

According to the International Energy Agency, China generated 79% of its power with coal in 2012, with Australia close behind at 78%.  The United States got 45% of its electricity from coal, and even clean energy advocate Germany relied on it for 41%.  South Africa?  Try 93%.

“What we have seen is that the coal primarily used in power plants is bituminous coal.

This coal has a high heat value and low moisture content, but contains higher concentrations of mercury, selenium and sulfur,” explains Targeted Microwave Solutions chief executive Officer Lawrence Siegel, noting that these contaminants find their way from power plants into the air and other parts of our environment during combustion.

“Lower rank coals such as sub-bituminous and lignite coals are much cheaper to mine but do not have the desired high heat value characteristics of bituminous coal, primarily because they exhibit a much higher moisture content – up to 45% in some cases – and because of that they do not burn as well,” he continues.

“Generally speaking, however, this lower quality coal contains only a fraction of the polluting contaminants that are present in conventional thermal coals used today for electricity production.”

Clearly, then, the trick is one of de-watering low quality coal to the point that it burns with a high degree of efficiency.  Low rank coal is inexpensive, and generally lower in sulphur content. By improving its heat value, Target Microwave Solutions hopes to add value to this energy feedstock and create a designer coal product that may prove to be a very attractive alternative to conventional thermal coals used by utilities worldwide.

It seems the type of challenge solved by relatively simple technology, but in reality companies have been trying to find a solution for decades, with little to show for their effort.  One of the reasons might be that most groups use one of a number of thermal drying approaches, which essentially applies external heat to coal to dry it out.

In recent years, a small number of companies started to experiment with microwaves to penetrate coal and force the drying process, but only Targeted Microwave Solutions aims to make the process vertical.  Most commercial microwave applications, including in the food industry where the technology is used for killing bacteria and other tasks, process on horizontal belts.

“The traditional method of moving product through microwaves is horizontal conveyor belts,” says Siegel.  “Getting an even spread is difficult, and heated material on belts can cause the belts to disintegrate,” he adds.

“We developed an approach using microwaves in a vertical process where the material is fed through a series of vertical processing chambers and is subject to microwave exposure on the way down.

Water and steam expelled from the material is removed through specialized vacuums on the side of the system. The question is how much energy do you have to put into those microwaves and how much water are we taking out of the material, and at the end of the day are we ahead of the curve?  At this point, we are.”

To prove this, the company built its demonstration plant in King William, Virginia, commissioning the facility in late July of this year.

Here, material (currently coal) rides in an elevator up to a hopper before being dropped through a shaft utilizing Targeted Microwave Solutions’ proprietary technology.

Microwaves, their timing and intensity controlled by a special computer program, flow out of articulating ports, hitting the coal all the way down as it falls and stirs inside the processing chambers.

The system is designed so that no microwaves escape and no conveyor belts catch fire, and because the coal moves around, the application of microwaves is more even.  The end result is superior drying efficiency and better safety.

One of the goals in the coming year is to find ways to make the technology even more efficient.  Putting more coal through the system using less energy and on a smaller footprint – all of these achievements should make the Targeted Microwave Solutions technology more attractive to power companies, to whom available real estate for the installation of additional equipment and processes is often quite limited.

Refining the technology will soon be the responsibility of an R&D team the company is locating in Gaithersburg, Maryland, about 90 minutes from the demonstration plant.  Siegel expects a new R&D headquarters to open in October and to add to his team of on-site engineers by the end of 2015.

But, let’s turn back to the demonstration facility for a moment.  Its location is interesting and heralds a potentially important component of the company’s future, as it sits on 5 acres of land situated next to a large clay mine in Virginia.

Kitty litter is a huge industry in the United States and one of the challenges in producing it is drying a special type of clay it contains called bentonite.

“It is absolutely our intention to present our technology as an attractive alternative to the bulky and inefficient ovens currently used to dry the bentonite,” explains Siegel.  “Thermal ovens heat the clay from the outside requiring it in many cases to pass through the oven several times before it is the correct dryness and size. Our microwaves penetrate the clay and remove moisture from the inside out, potentially reducing the costs of this process substantially. We are going to begin microwaving clay in the next several months as preliminary tests are quite encouraging.”

Coal treatment, however, remains the priority and driving force behind the Targeted Microwave Solutions business for now.  Making that more than clear are joint ventures the company has already formed in China and India, countries that Siegel believes will be its two leading sources of business.

“I suspect probably in the spring we will begin an aggressive marketing effort to sell our technology to coal-fired plants, or joint venture with power companies to build a facility on their premises and share in the revenue stream,” says Siegel.  “My hope is that by this time next year we have commercial orders in place and we start to see some revenue.”

This timeline is aggressive to be sure, but when one considers the pedigree of the company’s leadership, it is difficult not to hop on the bandwagon.  Siegel has worked in a variety of technology and manufacturing industries, both for himself and for some very high-profile global companies, including 5 years as president of Atari, a well-known pioneer in home video game consoles.

Board chairman Jim Young was one of three businessmen who worked to establish MedImmune Inc. in its early days during the late 1980s.  He was still with the company a decade later, as president of R&D, when it was sold to AstraZeneca for USD $15.6 billion.

Director Steve Crocker was part of the team that developed protocols which later formed part of the foundation for the Internet.  He is currently chairman of ICANN, or the Internet Corporation for Assigned Names and Numbers.

Then there is Dr. Rajiv Modi, Chairman and Managing Director of generic drug giant Cadila Pharmaceuticals Limited, the largest private pharmaceutical company in India.

Plants for processing coal and other materials using the Targeted Microwave Solutions technology would cost in the tens of millions of dollars to build, but environmental regulations and big cost savings from higher burning efficiency could make that a palatable number for many potential users.  “The optimal revenue model will depend on a potential client’s, and our, access to capital, and other factors,” says Siegel.

Beyond treating coal and bentonite, Siegel speaks of the potential to replace conventional mineral separating processes in the mining industry, particularly that for iron ore, and more obvious applications such as removing water in the wood feedstock for biomass plants.

“We have dozens of applications in mineral and fuel stock areas to exploit in the months to come,” he says.

If coal-fired plants do begin adopting the technology in large numbers, it would not be the first time a clever team took an age-old problem, looked at it a different way and utilized advances in technology to solve it.

Technology, connections and intellectual firepower are among the factors required to pull off such a feat, but then those terms describe Targeted Microwave Solutions’ strengths.  Shareholders and the environment are counting on the team’s success.

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