Do things change? These two pictures are Skunk's back yard - only 60 days apart. The second week of April and the second week of June this year. What will GERS PPS be in 60 days? Well by then the Marion IN COES PR should be a distant memory. We also should have a pretty good idea on the status of the Global Ethanol COES at Riga MI and Lakota IA as well. We should have read and digested the 2nd quarter report and even got a few questions answered we had not even thought to ask. I suspect the dam that has kept us channeled around a dime since the second week of February will have finally broken loose a bit. In which direction? Well it all depends on performance. COES and Financing. Financing and COES.*****************************************
Again thanks to lightbeam on i-hub. He has found some news where little is available. GERS was featured in the March/April 2008 edition of Biofuelsjournal P.22. http://www.nxtbook.com/nxtbooks/grainjournal/biofuelsjournal_20080304/
This is a nice little article if you missed it. Two things of particular note. The first is Dave Winsness and Ed Carroll seem to have done the interview - and the only other mention is of Dave Cantrell. No mention or quote from Kevin Kreisler - this is a change from the PRs of the recent past. How you frame this change may tell more about how you see the company and the directors - than it does about the company itself.
The other change in this article is the use of the name, quotes and phone number of Steve Roe, the General Manager of the Little Sioux Ethanol Plant – Marcus, IA. (this is the first time the Skunk has seen reference to a second system - this is "NEWS") The Skunk has learned (with help from another investor) that this second system came from ICM - ". . . no other reason than to try something different." The plant believes that "Greenshifts equipment works well." and that "They are good people." This endorsement of GERS appears to conflict with those on the boards who portrayed this relationship as less than positive. Again, how you decipher this apparent conflict will depend on your perspective.
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_G/threadview?m=tm&bn=77822&tid=2418&mid=2455&tof=9&frt=2It
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_G/threadview?m=tm&bn=77822&tid=2744&mid=2748&tof=35&frt=2
This article also ties in with the additional use of Little Sioux Ethanol Plant as a successful COES example on the GERS home page:
"Little Sioux Corn Processors operates a 50 million gallon per year corn ethanol facility and was an early adopter of our corn oil extraction technology that has been utilizing our corn oil extraction since Spring 2006. Since (then) we sold Little Sioux our demonstration system and do not own this facility. This oil extraction system has more 40,000 hours of runtime producing corn oil at rates exceeding 1.5 million gallons per year."
http://www.greenshift.com/facilities.php?mode=3
It appears that at least part of the Little Sioux extracted corn oil is sold into the local retail market as a feed supplement and as biodiesel fuel. This from their web site: "Our expansion is now complete and we will have a steady supply of DDGS, MWDGS, Syrup & Corn Oil available." "Call for availability and pricing on Syrup and Corn Oil." Also from their first quarter report:
"We directly market and sell our corn oil to regional wholesalers. Presently, the end use of our corn oil is in the livestock and biodiesel industries. In the long term, our corn oil could be marketed for human consumption; however, the feasibility of market penetration as human food is unknown at this time, as corn oil extraction in dry milling is relatively new and suitability for human consumption has not yet been determined."
And this little tidbit on the cost of the ICM COE:
"The increase (in the cost of their expansion) was due to our purchase of an oil separation unit. We did not, however, increase the amount of our construction loan to include this additional $2,000,000 cost as we will pay for the oil separation unit with our cash from operations"
The Skunk recommends that everyone pay for a $2M capital expenditure with cash out of the ol'till.
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ASTM Approves New Biodiesel Fuel Blend Specifications 06/20/08 4:36:11 PM
It will be interesting to see if the new specifications below will have any effect on GERS and the processing of corn oil. One benefit may be that the market for bio-diesel can now expand quickly with the opening for up to 5% bio-diesel within the specs for regular diesel:
" . . . and a new specification to include up to 5 percent biodiesel in the conventional diesel specification."
http://www.dtnethanolcenter.com/index.cfm?show=10&mid=72&pid=16
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Skunk Says SOY STINKS!
The Skunk sees more and more hard times for those biodiesel plants dependent on soy oil as a feed stock. The high costs of the soy oil is shutting them down left and right. Many see corn oil as the only feedstock where it is possible to make a profit. Here is an example in the first quarter report of CENTRAL IOWA ENERGY, LLC:
"We have also begun utilizing crude corn oil extracted by dry-mill ethanol plants as an alternative feedstock, which we are able to pretreat at our facility. We expect that corn oil will be a lower cost vegetable oil feedstock alternative, and we hope to be able to substitute it for soybean oil in our biodiesel blends. The amount of corn oil that we will be able to acquire will likely depend upon the rate at which ethanol plants begin installing corn oil extraction equipment at their plants and the extent to which they market their corn oil. We anticipate that our ability to utilize lower cost feedstocks will help make our biodiesel more price competitive with petroleum-based diesel, in light of historically high petroleum diesel sales prices, thereby increasing sales volume of our biodiesel."
This company has just been notified by its lender it is in default - its interest rate went up 2% and it has 90 days to raise $7M. (and we thought we had problems!)
http://www.sec.gov/Archives/edgar/data/1385952/000136231008002854/c73404e10qsb.htm#103
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Here is another one called East Fork Biodiesel:
" . . . in light of the continuing increase in the prices of our primary raw material, soybean oil, which is at or near record levels, coupled with the comparatively slower increases in diesel fuel prices, we believe it is not in our best interest to begin regular operation of our plant."
and
"DDGS Corn Oil. The most promising economical alternative to soybean oil is corn oil extracted from dried distillers grains with solubles, known as DDGS. . . We believe that corn oil, extracted from DDGS from ethanol plants, is currently the closest oil to being economically available."
So now after they build their plant - they realize they cannot make a profit when the feedstock costs more than the end product! Now they wish they had set up to run corn oil!
http://www.sec.gov/Archives/edgar/data/1424804/000118301008000047/form10-12ga3.htm#a3
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Now the Skunk could give lots and lots of examples of the trouble soy based biodiesel plants are having - but let me make one more please. I mean, look at the name of this one:
SOY ENERGY, LLC = Now listen to what they say:
"Management sought technology that would allow the biodiesel plant more flexibility in the types of feedstock that may be used. Management began exploring the use of corn oil as the primary feedstock for the production of biodiesel. Management believes that corn oil may present a more favorable feedstock for biodiesel production compared to soybean oil. Management believes this is especially true now due to the current high soybean oil prices."
http://www.sec.gov/Archives/edgar/data/1426780/000089710108001357/soy082627_10-12ga.htm#A002
DUDE! A company called "Soy Energy" is saying corn oil is the only way to make money making Biodiesel!
We are standing in the right place - at the right time - on the cusp of history!!
GERS management - LETS GET IT RIGHT! Lets get this two car funeral on the road and headed in the right direction!!! Lets get these COES up and working and lets get some decent financing! I wanna hear some pop and snap.
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The Skunk has linked the following Plants to Corn Oil Extraction - no evidence yet - but - will try to monitor for possible third party sales or other links to GERS?????
LINCOLNWAY ENERGY, LLC
"A corn oil extraction system was completed and commissioned in April 2008. Lincolnway Energy is currently working to maximize corn oil production capacity. The system is performing as expected in performance projections."
http://www.sec.gov/Archives/edgar/data/1350420/000114420408028594/v114015_10q.htm#RANGE_A1:C20
PRAIRIE CREEK ETHANOL, LLC
"We also plan to negotiate and execute finalized contracts concerning the construction of the plant and corn oil extraction technology. . ."
GRANITE FALLS ENERGY, LLC
"Subsequent to our fiscal quarter ended April 30, 2008, we completed the installation and start-up of our corn oil separation equipment at our ethanol plant and we are presently operating the new equipment. . . . . we expect the total cost of the oil separator system will be approximately $775,000."
http://www.sec.gov/Archives/edgar/data/1181749/000136231008003217/c73631e10vq.htm#102
End of Year (EOY 2008) Forecast
The Skunk stands by his detailed EOY forecast from last weeks blog. See that previous blog for details. My prediction for the last trade in 2008 for GERS is the center of the Trading Range .60**
This with a trading range of .45 to .75 during mid December '08 to mid January '09. I am making this prediction on 6 June 2008. GERS stock just closed down 9% for the day at a dime.
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LONG RANGE FORECAST
The Skunk stands with his Long Range estimate of the last couple weeks. See previous blogs for details.
$4.91 Share Price in FEB 2010**
**Note: I am a shareholder - I do not work for, nor do I receive any direct or indirect payment from GERS or anyone associated with them. (But it would be Kapitalist Kool if I did) I will not intentionally mislead - but I can be wrong (ask Mrs. Skunk for specific frequencies) - so do your own due diligence - and take responsibility for your own financial decisions – (and your own life in general) good or bad. And some good garage logic luck to ya.
SKUNK
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