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                                                                  EXHIBIT (C)(1)
 
ANTHONY B. PETRELLI
Senior-Vice President
Investment Banking Services
 
December 15, 1997
 
The Board of Directors
Advanced Environmental Systems, Inc.
370 Seventeenth Street, Suite 2300
Denver, CO 80202
 
Gentlemen,
 
     You have requested our opinion with respect to the fairness, from a
financial point of view, to the minority shareholders of common stock of
Advanced Environmental Systems, Inc. (the "Company" or "AESI"), a New York
corporation, of the transaction contemplated by the proposed Agreement and Plan
of Merger dated December 15, 1997 ("Agreement"). The Agreement is between the
Company, Philip Services Corp. ("Philip"), a corporation existing under the laws
of Ontario, Canada and AES Acquisition Corp. ("AES Acquisition"), a New York
Corporation and wholly owned subsidiary of Philip. The transaction contemplated
is described below.
 
     The Agreement anticipates as promptly as practicable AES Acquisition to
commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended) a tender offer for any and all of the outstanding shares of
Common Stock, par value $0.0001 per share of the Company at a price of US$0.0059
per share, net to the seller in cash subject to certain conditions.
 
     In connection with our examination we have reviewed, among other things,
(i) the Agreement and Plan of Merger dated December 15, 1997; (ii) the
Preliminary Schedule 14d-9 relating to the proposed transaction; (iii) the
Company's Forms 10Q dated 3/31/94, 6/30/94, 9/30/94, 3/31/95, 6/30/95, 9/30/95,
3/31/96, 6/30/96, 9/30/96, 3/31/97, 6/30/97 and 9/30/97; (iv) the Company's
Forms 10-K dated 12/31/94, 12/31/95 and 12/31/96; (v) and various other
documents provided by the Company.
 
     We have had discussions with management of the Company regarding the
Company's business, operations and earnings. In addition we have reviewed the
historical stock prices and trading volumes of the Company's common stock and
have made such other financial studies and analyses and investigations as we
deemed relevant.
 
     In rendering our opinion, we have relied on the accuracy and completeness
of the information provided to us by the Company's management and available
public information and have made no independent verification of any of the
information reviewed by us for purposes of this opinion.
 
     Neidiger, Tucker, Bruner, Inc. as part of its investment banking services,
is regularly engaged in the valuation of businesses and securities in connection
with mergers, acquisitions, underwritings, sales and distribution of listed and
unlisted securities, private placements and valuations for estate, corporate and
other purposes.
 
     Based on the foregoing and such other factors as we deem relevant, we are
of the opinion that as of December 15, 1997, the date of the Acquisition
Agreement, the proposed Acquisition is fair to the minority shareholders of
Advanced Environmental Systems, Inc. from a financial point of view.
 
Very truly yours,
 
/s/  ANTHONY B. PETRELLI
Neidiger, Tucker, Bruner, Inc.