ENPAR Technologies Inc. (ENP)
Interview with:
Dr. Gene Shelp, President
Business News, Financial News, Stocks, Money & Investment Ideas, CEO Interview
and Information on their
electrochemical water purification and wastewater treatment technologies.

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ENPAR Technologies is ready to help the world convert contaminated water into drinking-water with their DesEl, AmmEl and NitrEl Systems

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Environmental Technologies
Industrial Products
(ENP – Toronto Venture)

ENPAR Technologies Inc.

449 Laird Road, Unit 12
Guelph, Ontario, Canada N1G 4W1
Phone: 519-836-6155

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Dr. Gene Shelp

Interview conducted by:
Lynn Fosse
Senior Editor

April 2004

Company Profile:
ENPAR Technologies Inc. is a public company providing electrochemical water purification and wastewater treatment technologies to private and public sector clients. Our primary focus centers on the development of innovative, cost-effective technologies for the remediation of ground waters, surface waters and process waters containing unacceptable levels of nitrate, ammonia and total dissolved ions including metals such as aluminum, arsenic, chromium, iron, and mercury.

The ENPAR array of rigorously tested, environmentally friendly technologies operate at high rates of efficiency with exceptional results and are ready solutions designed to address problems associated with environmental and operational issues related to the management of municipal and industrial waters.

ENPAR is confident that implementation of our leading edge water treatment systems will contribute to safeguarding the health and quality of life of people everywhere. Currently participating through formal agreements in a number of development and joint venture initiatives, the Company is well positioned to capture a significant share of expanding global markets valued in the billions of dollars.

Electrochemical Removal of Nitrogen Compounds
has developed two innovative electrochemical technologies for the degradation of nitrogen* compounds. They include an in situ removal technology for nitrate contaminated groundwater plumes (the NitrEl System) and a flow through electrochemical reactor for treating ammonia** contaminated wastewater (the AmmEl System).

The NitrEl system is an Electrochemical Treatment Technology that converts nitrate directly to environmentally friendly nitrogen gas. The treatment system is modular, very versatile and can be installed in situ (in place) in the soil of any field site. Systems operate independent of temperature and concentration, and are designed to accommodate a wide variety of sites and weather conditions. The process uses a "fence" of electrodes inserted into the ground to the desired depth. The energized system converts nitrate to environmentally-friendly nitrogen gas as the contaminated ground water passes through the fence.

The AmmEl process is an Electrochemical Treatment Process that converts ammonia directly to nitrogen gas. The process uses an ion-exchange column to remove the ammonia from the waste stream leaving an "ammonia reduced" effluent.

Water Purification
The DesEl System operates on the principle of capacitive deionization to remove ionic compounds such as iron, chloride, arsenic and nitrate from water and it converts sea water to potable water. This patented technology expends less electrical energy, produces minimal wastewater, and provides potable water more rapidly and efficiently than conventional systems.

Electrochemical Remediation of AMD/ARD
The AmdEl system is a novel approach to preventing acid mine/rock drainage that utilizes electrochemical principles to prevent the oxidation of sulphide-containing orebodies, ore, concentrate, waste rock storage piles, tailings areas and natural outcrops.

Enhanced Leaching Technologies
ENPAR is developing and field testing electrochemical leaching technologies designed to enhance the recovery of base and precious metals from low-grade sulphide mineralization and sulphide mineral concentrates; the ExtrEl Process. The company is focusing on two applications; 1) metal recovery from sub-economic sulphide hosted precious and base metal deposits; 2) mine decommissioning of AMD generating sulphide wastes.

Chromium Remediation Technology
ENPAR is developing technology to remediate groundwater contaminated with hexavalent chromium. Chromium generally exists in two valence states, Cr6+ and Cr3+, with the hexavalent form being more toxic and mutagenic. The technology has been successfully tested in the laboratory and ENPAR is seeking a field site for pilot scale testing.

*Nitrate is a common environmental contaminant found in ground water and waste water. Over-utilization of nitrogenous fertilizers and the large-scale commercial farming operations (feedlots) are reported to represent a major source of nitrogen contamination to surface and ground waters. Nature removes nitrate from ground water by using bacteria to convert nitrate into gaseous nitrogen by a process called denitrification. This process occurs under anaerobic conditions when soils become saturated with water. Although denitrification occurs rapidly in surface soils where organic matter is plentiful, it occurs much slower when nitrate is leached deeper into the soil where natural organic matter is sparse.

**Concentrations of ammonia above 5 parts per million in water are toxic to sensitive living organisms like water fleas and fish. This disrupts the food chain and is not acceptable for a healthy environment. Nature takes care of this by converting the ammonia to nitrite and then very quickly to nitrate. Although, nitrate is a plant food, it is a long-term toxin to humans.

CEOCFOinterviews: Dr. Shelp, you have been with ENPAR for quite some time; what was the vision when you started and where are you today?

Dr. Shelp: “Our initial vision was to develop a state-of-the-art technology; actually an electrochemical cover for the mining industry to address acid mine drainage, a major problem that the industry faces. That vision changed in the late 90’s when we started developing technologies to address drinking water and waste water issues. Our specific focus right now is to develop and commercialize technologies for treating drinking water and wastewater.”

CEOCFOinterviews: What is being developed and what is being commercialized?

Dr. Shelp: “Right now, the company has three patented electrochemical technologies that we consider state-of-the-art. Our DesEl System is designed to remove dissolved inorganic contaminants such as arsenic, calcium, chromium, and other inorganic contaminants.  The AmmEl System, removes the acute toxin ammonia from municipal and industrial wastewater streams. Our NitrEl System is patented or patent pending in the United States, Canada and Europe and has been designed to remove nitrate. If you look at many areas in developed parts of North America, Europe, and many other countries, where agriculture is very important, nitrate contamination is a major drinking-water issue.  ENPAR’s AmmEl and NitrEl Systems convert these contaminants to one of the most environmentally friendly compounds you can produce, and that is nitrogen gas. Right now, you are breathing air comprised of 78% nitrogen gas.”

CEOCFOinterviews: Will you give us a sense of the industry for this type of product and where does ENPAR take a place there?

Dr. Shelp: “ENPAR is a young company; we were started in 1996, and we are now at the commercial stage with these technologies. Our competitors for municipal wastewater treatment and ground water systems are biological systems for treating nutrients like ammonium nitrate. For our DesEl System technology, the competitors are membrane systems like reverse osmosis. ENPAR is just at the point where it is producing and providing these products at a commercial level, so we are developing our markets and in order to do that we have set up strategic partners with companies like the Council for Scientific & Industrial Research (CSIR) of the Republic of South Africa, a crown corporation employing approximately 2500 scientists, engineers and support staff. Another is Scanacon AB of Sweden (a privately held company), which is the preeminent supplier of acid management equipment and services to the stainless steel and specialty alloy finishing industry. These are well-established companies or institutions with highly credited past work histories, and we will form alliances with these companies to launch ENPAR into appropriate markets.”

CEOCFOinterviews: Would you explain electrochemical technology ?

Dr. Shelp: “Electrons are used to change the state in which these contaminants occur. For example, the contaminant ammonia, is an acute toxin and by using electricity, we convert it into the most environmentally friendly nitrogen compound possible, which is nitrogen gas.”

CEOCFOinterviews: What makes your system better and why should people want to use it?

Dr. Shelp: “Our systems for treating drinking water and wastewater have many advantages. Let me start with our DesEl System for desalinating seawater and removing dissolved inorganic contaminants from brackish water.  With conventional approaches like reverse osmosis, for every ten gallons of water processed you may be lucky to recover five gallons of clean water while the remaining five gallons or more requires disposal. Our system consistently recovers more than nine gallons of clean water for every ten gallons treated, so you get a greatly improved recovery of water. The major cost is pumping that water, especially if it is ground water, so it is critical that as much clean water is recovered by the system as possible.

Existing biological systems for treating ammonia present in municipal wastewater are very sensitive to changes in temperature and nutrient levels. With a biological system, once the water temperature drops to less than fifteen degrees Celsius, the effectiveness of the system is reduced dramatically. Our electrochemical AmmEl System can treat water at zero degrees Celsius and still efficiently remove ammonia.”

CEOCFOinterviews: Can you give us an idea of the difference in cost and the recovery between ENPAR and the competition?

Dr. Shelp: “A study that we just came across that was produced by an institution in Israel, looked at the various technologies. For example; in the case of desalination we believe our system can be designed to be 15-20% cheaper than reverse osmosis, which is the dominant technology currently being used. In most applications , for brackish water, ENPAR systems provide 95% water recovery compared to only 30-50% recovery using reverse osmosis. This is a major cost advantage. However, ENPAR still needs to establish its place in the market, and that is why we are setting up strategic alliances with well-established, respected and credible companies. Once we have proved to them that our technologies can solve water treatment problems as measured by performance and value, we believe they will bring their existing client base to ENPAR and that will open up other opportunities.”

CEOCFOinterviews: Will you give us an idea of the cost it will take to implement this system, and is it going to be a barrier in getting your system in use?

Dr. Shelp: “No, we don’t see cost as a barrier as long as we are competitive with conventional approaches and far more effective, I don’t see us having any problem capturing a reasonable share of the market. The critical point for the company right now is to establish a level of confidence with strategic partners that already have a part of that market, and that is what we are attempting to do.”

CEOCFOinterviews: How do you establish that level of confidence and win over a potential client?

Dr. Shelp: “Just as we are doing with CSIR and Scanacon, we build small units. We test various solutions and wastewater, and then we go to a client and convince that client to use our technology. There are a couple of stages and the first is what we call a ‘Pilot Scale Unit’ to assure the client that the technology is effective. We already know that the client wouldn’t look at our system if it were not cost effective, so we focus on  the technical merits. As long as we meet or exceed the guidelines stated by the client, then the final step is a full-scale installation.”

CEOCFOinterviews: If something is not right during the testing, would it show up quickly?

Dr. Shelp: “Yes, for example; if a client were to contact me and tell me that they want to run a certain test and want us to build a unit that will handle 5000 gallons a day, it would probably take us three months to construct the unit and we would operate it on-site for three months. Within 6 months we would likely have a go/no go decision, so it is relatively quick.”

CEOCFOinterviews: Now that the technology is in-place, and people see it working, all you have to do is go from there!

Dr. Shelp: “Yes, and that is what we are doing right now. We are attending a number of trade conferences with a portable, small-scale demonstration unit. That is how we established our relationship with CSIR; they attended a conference where we had a booth.”

CEOCFOinterviews: Are there other new competing technologies which you need to be watching for?

Dr. Shelp: “Not that we are aware of. The DesEl System is state-of-the-art. and we believe that we are at the forefront. Regarding the AmmEl System, almost all outside research and development has focused and will continue to focus on biological systems. For areas where you have cold climate part of the year,  biological systems don’t work effectively. If you consider the Kyoto Accord (United Nations Framework Convention On Climate Change), and the production of greenhouse gasses, all biological systems produce greenhouse gasses, but our system does not.”

CEOCFOinterviews: In what regions are you largest markets?

Dr. Shelp: “The largest market is in North America. In addition, there are huge markets in Europe, the Middle East, North Africa, China, and Asia. We have inquiries from all over the world right now. A number of countries in Asia have approached to set up strategic alliances, partnerships and/or joint ventures; we haven’t taken that jump yet. We are taking a very cautious approach by selecting those companies that we know are convinced of our capabilities and potential."

CEOCFOinterviews: Is it more difficult to get those relationships in North America?

Dr. Shelp: “No, it is a matter of demonstrating the product, site visits and encouraging a potential partner to visit our facilities in Guelph,  Ontario, Canada for a demonstration.  We welcome opportunities to visit the field locations of clients - to see their operation, assess the problem and design a system specific to their needs Right now, we are talking to some very large companies based in North America. We are attracting a lot of attention.”

CEOCFOinterviews: Are you poised at that point to ramp up and get moving?

Dr. Shelp: The key for ENPAR is to secure its first large-scale commercial installation, and once that happens, I’m convinced that the growth will be substantial.”

CEOCFOinterviews: Will you tell us how you have been funded up until now, what you are going to need going forward, and how you plan to take care of that end?

Dr. Shelp: “In 1997, we did an IPO and raised $1.5 million. Before that, we raised close to $400,000.00 dollars from family, friends and colleagues. Over the last year-and-a-half, we raised a small amount of money, about $300.000.00 dollars. The company is financially healthy; we have about $500,000.00 dollars in the bank, and we have about half-a-million dollars in securities and investments in other companies. Right now, ENPAR is not in need of money but, in order to establish a significant manufacturing facility, the company will need to secure funds. In order to take that next leap, we have to obtain that first large contract.”

CEOCFOinterviews: You have an agreement with Canadian Golden Dragon Resources Ltd. (Dragon); will you tell us more about this?

Dr. Shelp: “ENPAR was in the process of developing an electrochemically enhanced hydrometallurgical approach for specific ore types. Canadian Golden Dragon Resources Ltd. (Dragon)  is active in the mining industry. We saw some synergy, so we transferred 70% of the ExtrEl technology to Canadian Golden Dragon and they will invest the money we need to further the development of the ExtrEl technology.”

CEOCFOinterviews: You are really getting a lot of mileage out of a variety of partnerships!

Dr. Shelp: “For sure!”

CEOCFOinterviews: Are you still active in research and development?

Dr. Shelp: “The technologies designed for specific applications such as drinking-water municipal wastewater, or a groundwater issue are market-ready. We will always do R&D because the market is changing and opportunities will continue to present themselves. What is exciting about electrochemical technology is that, with few modifications and no changes in the basic principle, you can address a number of other issues. We are now looking at the treatment of organics such as perchloroethylene and a number of other compounds. We will continue to do research but our focus right now is marketing and obtaining that large contract that is going to take ENPAR to the next level.”

CEOCFOinterviews: Are there government or environmental agencies that you approach or work with?

Dr. Shelp: “Yes, our original technology, the AmdEl System, which is an electrochemical cover technology, is being tested in Butte, Montana with project funding from the U.S. EPA. One of the strongest programs that has been critical to the survival of a lot of small Canadian technology companies like ENPAR is the Industry Research Assistance Program (IRAP). It is available through the Government of Canada and has been instrumental in assisting companies like ENPAR to develop and commercialize our technologies.”

CEOCFOinterviews: Why should potential investors be interested, and what might there be about ENPAR that investors may not realize when they first look at the company?

Dr. Shelp: “ENPAR is working on several projects at this time. They all start on a small-scale, and any one of these projects could lead to a full-scale installation. Potential investors are encouraged to take into account the total number of shares, the float and the number of shares that are actually trading. Most of the shares are held tightly by insiders or people that are very close to the company. Typically, they are committed for the long-term and really believe in the future of the company. If you are a short-term investor, I don’t see ENPAR being your play. If you are a person with a longer horizon and are more of a visionary and are looking at twelve to twenty-four months, I think ENPAR is for you. I believe that current ENPAR initiatives have great potential to substantially increase the value of our shares over that period.”

CEOCFOinterviews: In closing, what should readers remember about ENPAR?

Dr. Shelp: “The key strategy for ENPAR’s sustainable future growth is to continue to build strategic alliances with recognized and very credible companies that already have a market share. Working with these companies and establishing a level of confidence will expose ENPAR to the kind of opportunities needed to take this company to the next level.”


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