Cardinal Resources Inc fka CDNL

[Opportunity Strikes]

For the past several years, China has been hailed as the "next big thing" in consumerism. Its population is huge, but has only recently become capable of spending in a way that mirrors the spending habits of western consumers. That internal consumption - rather than exports - has given rise to a whole new era of economic growth in China, and the country's weaker GDP growth rates are still better than the best GDP growth rates the United States or Europe could boast.

The increasing westernization of China, though, has underscored some key challenges as well as key opportunities for the giant country. One of the biggest, overarching hurdles is the simple fact that China doesn't have enough clean water; people living in rural area now know just how bad this problem is, having realized it using their internet connections, many of which are mobile connections.

The statistics: China holds only 7% of the world's fresh water supply, but 20% of the world's population calls the country home.

And yet, the rise of the consumer class in China that made it clear the country has a water-shortage problem also, ironically, has made the clean water shortage problem worse, as the rise of heavy-polluting factories supply the jobs that have made so many Chinese citizens more well-off than they were in the past.

The nation's government says it's working toward quelling its rampant pollution, though its enforcement of tough regulations to that end has been hit and miss. More often than not, the country has been opting to clean the water it has rather than finding a way of not dirtying it in the first place.

And the initiatives have been bold, even if odd. As an example, the country's government has backed some experimenting with so-called sponge cities, which handle water that most of the nation's urban areas simply can't any longer. Though the primary intent is to divert water away from major urban infrastructure, it's also got a water-scrubbing aspect to it. Project coordinator Kongjian Yu explains "A sponge city is one that can hold, clean, and drain water in a natural way using an ecological approach."

China deserves credit for a creative approach, but sponge cities are more of a philosophical approach where applied, practical, and literal solutions are needed. They're also expensive, at about $180 million per project. That's where an up-and-coming company called Cardinal Resources Inc. (OTCBB:CDNL).

Cardinal Resources has developed a ground-breaking water purification technology and platform that fills the important market between 5000 and 20,000 people. Anything less, and personal systems like the "drinkable book" and hand-held filtration systems make more sense. Anything more, and utility-scale water systems become prudent. There are thousands of small communities all over the world, however, that are trapped in the middle... with a sizeable need, but not the funding necessary to make permanent potable water a long-term reality.

The solution Cardinal Resources brings to the table is called a Red Bird System. Though the company makes various-sized systems to meet different needs, they're all about the size of a concession stand. A couple of them are mobile, capable of being towed by a small truck.

Depending on the equipment in question, a system can clean anywhere from 50,000 liters to more than 200,000 liters per day (between 10 and 40 gallons per minute), which is enough to serve communities of between 5000 and 20,000 people, respectively. Better still, these systems require no infrastructure , no nasty chemicals, and no constant changing of filters; the only filter to speak of on a Red Bird system needs to be replaced once every five years.

At a price of anywhere between $125,000 and $270,000 per system (mostly depending on its size and capacity), some would-be buyers can easily afford the equipment, while others can't. CDNL doesn't have to sell these systems to make money though. It can sell the water it cleans to achieve a nice ROI on the technology, which doesn't force a community in need to come up with a great sum of money right up front. Or, Cardinal Resources also offers lease-to-own options. Joint ventures and co-ops - both private and public - are also in the works.

More important right now, China is finally tapping into this practical solution that Cardinal Resources offers.

Earlier this week, the HangZhou Sky Valley Water Technology Co. - a China-based consortium formed to market and commercialize Cardinal Resources' water treatment technologies in Asia and other international markets - ordered one of these systems, and is planning on buying two more as part of just its initial order.

It was actually a relationship that was quietly forged back on October 13th, when CDNL raised several million dollars worth of funding by selling 51% of itself to this Chinese consortium that didn't just want an investment in a novel idea, but also wanted to build a joint venture that would distribute Red Bird Systems in China. It was the first and last investors heard of it until Monday. Now, that partner/investor has ramped up that relationship by becoming a customer.

The exciting part is, the clean water market in China is a $29 billion opportunity. Odds are good this is just the first of many Red Bird Systems China will want. It's a far more practical approach, and will certainly solve the problems in rural areas where a sponge city would have to impact whatsoever.
http://www.smallcapnetwork.com/Cardinal-Resources-Offers-a-Real-and-Real-Quick-Solution-to-the-Clean-Water-Shortage-in-China/s/via/1789/article/view/p/mid/1/id/630/