Gen III Oil (GIII.V) confirmed it has selected Koch Modular Process Systems (a private company based in New Jersey, and a sub-division of Koch Industries) as its ‘preferred technical subcontractor’. Koch Modular will enter into a Design Build contract for the second stage of the company’s 3-stage re-refining process. Koch will work on a ‘lump sum’ principle; which means the risk for cost overruns on that specific part of the plant will have to be covered by Koch.
Although this is considered to be good news, we aren’t quite sure why Gen III Oil requested a trading halt to announce a subcontractor. The appointment of Koch was hardly a secret as even Canaccord Genuity (which has a C$1.50 target price on the stock) already mentioned Koch in a recent research report. Canaccord will also be taking Gen III Oil around Toronto next Monday, June 11th.