ADA-ES (ADES) Announces $60 Million Equity Sale in Clean Coal Solutions, LLC Joint Venture

Jun. 6, 2011 (Business Wire) — ADA-ES, Inc. (NASDAQ:ADES) (“ADA”) today announced the sale of a 15.8% equity interest in Clean Coal Solutions, LLC (“Clean Coal”), ADA’s 50:50 joint venture with an affiliate of NexGen Resources Corporation (“NexGen”), by ADA and NexGen for $60 million to GSFS Investments I Corp. (“GSFS”), an affiliate of The Goldman Sachs Group, Inc. (“Goldman Sachs”). Closing of the transaction was simultaneous with signing.

GSFS’s 15.8% equity interest in Clean Coal is represented by Class B Units, which are non-voting except as to approval rights on certain matters. The Class B Units entitle the holder to a targeted return of at least 15%. ADA and NexGen each received gross proceeds of $30 million at closing and ADA will receive an additional $1.8 million payment from NexGen to maintain NexGen’s interest in Clean Coal. Given the 2.5% direct interest both ADA and NexGen retain in the individual entities previously formed to lease the “Refined Coal” facilities, the effective sharing ratio of net cash generated by all expected Refined Coal operations is 15% to GSFS and 85% to ADA and NexGen.

Clean Coal’s patented coal technology, CyClean, is a cost effective coal technology to produce Refined Coal, which reduces emissions of NOx and mercury. The American Jobs Creation Act of 2004 included changes to Section 45 of the Internal Revenue Code that incentivize the production of Refined Coal through an annually escalating tax credit, which is presently $6.33 per ton.

In conjunction with the equity purchase, Clean Coal granted Goldman Sachs the exclusive right to lease Refined Coal facilities targeted to produce up to 12 million tons of Refined Coal per year on terms that will be economically more favorable to Clean Coal than those in effect for the leases that Clean Coal entered into with another affiliate of Goldman Sachs in June 2010.

Dr. Michael D. Durham, President and CEO of ADA, commented, “We are very pleased to welcome this additional investment by Goldman Sachs. We believe that their continued financial interest in Clean Coal further validates the environmental and financial benefits of this proven emissions control technology. As we continue to assess ADA’s liabilities resulting from the arbitration panel’s recent interim award to Norit Americas, Inc. and related indemnity obligations, this cash infusion enhances our balance sheet and our ability to fulfill those obligations.”

Additional information regarding the transaction is available in ADA’s Current Report on Form 8-K, which ADA filed with the United States Securities and Exchange Commission on June 3, 2011.

About ADA-ES

ADA-ES is a leader in clean coal technology and the associated specialty chemicals, serving the coal-fueled power plant industry. Our proprietary environmental technologies and specialty chemicals enable power plants to enhance existing air pollution control equipment, minimize mercury, CO₂and other emissions, maximize capacity, and improve operating efficiencies, to meet the challenges of existing and pending emission control regulations.

With respect to mercury emissions:

We supply activated carbon (“AC”) injection systems, mercury measurement instrumentation, and related services.
We are also a joint venture participant in ADA Carbon Solutions (“ADA-CS”), which has commenced operations at its AC production facility
Under an exclusive development and licensing agreement with Arch Coal, we are developing and commercializing an enhanced Powder River Basin (“PRB”) coal with reduced emissions of mercury and other metals.
Through our consolidated subsidiary, Clean Coal Solutions, LLC (“Clean Coal”), we provide our patented Refined Coal technology, CyClean, to enhance combustion of and reduce emissions from burning PRB coals in cyclone boilers.

In addition, we are developing CO₂ emissions technologies under projects funded by the U.S. Department of Energy (“DOE”) and industry participants.