High Temperature Incinerator Agreement

17 April 2012

Augean plc

("Augean" or "the Group")

High Temperature Incinerator Agreement

Augean plc, one of the UK's market leaders in the management of hazardous waste, is pleased to announce that it has entered into a 10 year agreement to manage and operate a commercial high temperature incinerator at Discovery Park in Sandwich, Kent.

During 2011 Augean was invited to participate in the tender process to select a partner to manage and operate a commercial high temperature incinerator ("HTI") at Sandwich in Kent. The incinerator and associated assets were formerly operated as part of the Pfizer Ltd site at Sandwich, which now form part of Discovery Park complex. Following a competitive selection process Augean was chosen as the preferred operator for the waste management operations at Discovery Park, which will include the HTI ("the operations") and following a period of due diligence during the first quarter of 2012 agreements were signed on 16 April between Augean Treatment Ltd and Pfizer Ltd.

The agreements include a number of associated facilities, supporting the day to day management of the main HTI facility. Annual lease costs include a profit-related mechanism and total costs are expected to range from £0.3m to £0.5m per annum. The HTI will be made available to existing and potential new customers for the management and incineration of a range of waste streams, as defined and agreed within the operational permit issued by the Environment Agency. The HTI is expected to provide capacity to process 10,000 tonnes per annum of waste and also benefits from its ability to recover energy from the process, making the facility the only HTI in the UK with this capability. Augean will also be responsible for the management of certain waste streams and will provide waste management services to local businesses at Discovery Park.

A local operations team has been recruited to manage, operate and maintain the operations, which will be referred to as the East Kent Waste Recovery Facility ("EKWRF") and discussions are well advanced with the Environment Agency to complete the transfer of the relevant operating permits to Augean. EKWRF will be fully integrated into the Group's Waste Network division, aligning the assets at Discovery Park with the Group's existing national network of waste transfer stations and providing the sales and support infrastructure to market the new services across the UK and, potentially, into Europe.

Integration of the operations will take place during the second half of 2012 and are expected to reach volume capacity by the start of 2013. Once fully operational, EKWRF is expected to deliver revenues to the Group of between £2.0m and £3.0m per annum and EBITDA contributions between £0.3m and £0.5m.

Paul Blackler, CEO commented:

"We are delighted to have entered into these agreements, which represent an excellent and unique opportunity for the Group to build a profitable business within the UK's thermal treatment sector. The addition of incineration capacity is strongly aligned with the Group's strategy to provide specialist waste treatment services to a broad customer base. Over the remainder of 2012 we expect to begin to leverage trading throughout our network to supply the new facility, particularly focusing on promoting the benefits of energy recovery to our customers."

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