'Nothing to do but sit tight. Today was the Port's committee meeting. What usually goes to comittee will go to the full Board at the next meeting. This "Pellet Handling Facility" on the agenda is interesting, but has been on agendas since 2009 (prior to BMSPF involvement). 'Doesn't mean they didn't become involved at some point later though.

There's several things I just can't put my fingure on. Why is Drax so quiet about their facility at the Port? Why is Drax geting $50 million in bonds for their facility after construction supposedly had already started? Why is BMSPF crossing the interstate with their conveyor? Why is the capacity of Drax's conveyor system so much greater than what they produce from their pellet plants? So many questions that I just know there's more to the story.

I don't trade on feelings either, but with the share price tanking, lack of information coming forward, and a tepid response from the Port to BMSPF's August progress report; I can't say I don't have concerns.

Who knows though. Maybe this pellet handling facility the on the Port's current agenda has something to do with BMSPF instead of just Drax.

Phillip

I've got a feeling the project is dead. Does anyone else have any information?

Phillip

Below is the company's report to the Port's Board at the end of August. I was going to keep it to myself, but at this point, it's probably dated material.

BMSPF Progress Report

Phillip

I've already been bugging the Port with public information requests. The bond authorization for Drax doesn't mention BMSPF at all. The August Board meeting that BMSPF was at asking for an exension of their lease option had an update of all of their progress to date, but a lot of unresolved issues. The one piece of good news is that BMSPF is now sponsored by Canaccord Genuity and apparently working toward the TSX. My gut feeling is they don't have the manpower needed for a project this large, but did have a consultant in Lousiana working on it (as of August). Jim's interview at the same time with Biomass Magazine and what was reported to the Board stated they were still on track to break ground in December. The fact that plans haven't been submitted to the State Fire Marshall makes me think it isn't going to happen unless the plans were rolled up with the ones Drax submitted (which I don't think happened).

Anyway, I'm done bugging Port staff for now (they have been more than accommodating) since even if I did find out something definitive, I wouldn't be selling at these levels. I'm not sure what else to ask them anyway. They were cryptic about a potential lease option on the other side of the river, but I suspect they didn't put anything in writing to make a public information request on.

Phillip

BTW, what did you mean by things are starting to make sense? I can't make heads or tails out of what is happening (or not happening).

Phillip

That's good to know. If they are flying to Florida, it means the lights are still on at the company. Hopefully it also means that Port of Baton Rouge project is still moving forward also.


Definitely some of the major companies. I just hope going to these conferences is actually resulting in more than a free globe shaped stress ball or earth pin picked up at a vendor booth. I've been to many conferences in my profession and haven't ever seen contracts signed, but the contacts made are usually worth while.


I hope so, but I think that will all depend on news coming out. I've thought that last Christmas also so I don't get my hopes up anymore. If news does come out, I'll be pleasantly surprised. The Port of Baton Rouge has another lease option on the agenda. Company unknown, "informational only", only item on the agenda, etc. Could be code to throw off people like me from bugging them. I wish the posted videos of their Board meetings online. Property in question is on the other side of the river. Could be log storing/staging area. Could be something unrelated. The fact that the Port's modus operandi has changed and don't list the company name and informational only has me wondering though.

Here's another map looking at the quantity of biomass in the form of mill residue. I'd say the Natchitoches Parish Port is a prime location. It now makes sense why an exclusive agreement was signed with the Port. They just locked up the fiber in this area by controlling port access. I'm thinking the Alabama River may be a good place also.

Phillip

Here's a biomass map I put together with respect to the locations that Drax has their two plants (in red) and the two port sites that BMSPF will have (or says they'll have if the projects haven't died). Intersting distance between them. The green is the density of biomass per hectacre.
Link to full size map

Thanks Richard. I'm glad there's someone to get industry insight on the forum. The plant could very well be dead. It could very well be alive. Dunno. All of the information I've been able to gather in the last month shows mixed signals and the possibility things aren't as rosy as they claim to be. Here's the facts as I know them:

1) BMSPF attended the Port of Baton Rouge Board Meeting on 8/22/13 asking for an extension of their lease option. The Port said "No" because they haven't shown any signs of having any takeoff agreements and they weren't on the agenda.
2) The BMSPF lease option expired on September 1, 2013. It isn't known if they signed before the expiration.
3) At the same time in August, Jim was interviewed and said that they plan on breaking ground in October (Now December).
4) BMSPF has an investment bank with annual revenues of over $800 million (Canadian) sponsoring BMSPF.
5) BMSPF is relying on bonding through the port for financing. Not the investment bank.
6) No plans have been submitted to the Louisiana State Fire Marshall for plan check by BMSPF. Only Drax.
7) BMSPF has been proceeding with design and permitting up until the end of August.
8) Share price has taken a dive since the August board meeting and activity on this forum has dried up.
9) BMSPF has paid $15,000 to the Port of Natchitoches to secure an exclusive spot there (I'm assuming they wouldn't have put money down if their project was dead).
10) Drax attended the Port of Baton Rouge Board Meeting in September asking for the port to proceed with a bond issuance (unknown if this is related to BMSPF or not).
11) The capacity at the Drax transport facility is over 3 times what their plants can produce.
12) The Drax plants appear to leave one of the most productive biomass producing regions in Louisiana untapped while BMSPF has located their chipping plant there (presumably to receive fiber barged in from anywhere along the river).

Anyway, this thing is all contingent upon whether they are involved with the plans Drax has at the Port of Baton Rouge. If they aren’t connected, I agree with you that this project is dead in the water.

Phillip

From what I've read, fiber cost depends on the local demographics. Fiber in some parts of North America have seen an increase, but not in Lousiana (yet). I imagine long term contracts would need to provide some surety of cost control.

As far as torrefication, I don't know if you're right or not. I'm a Civil Engineer and not a Mechanical Engineer so it isn't my area of expertise. I know some are selling torrified pellets in bulk (New Biomass Energy LLC), but I imagine the sales metrics of having more BTU per metric ton being shipped has to be analyzed. If BMSPF has a widget to make it economical and efficient that gives it a competitive advantage, they can quickly dominate the market share for something that no one else has been able to do yet in large quantities. All I know is I've had consultants propose on jobs that they said couldn't be done. The next consultant said it could be done and did it. In the engineering world, nothing is impossible. It just becomes financially impractical until someone with the expertise and can-do mentality comes along to change that.

Phillip

Industry knowledge is just as good. Thanks.

I've often wondered about the logistics of securing fiber in the quantities proposed at ultimate buildout. I've done some back of napkin calculations on barge traffic to deliver chips to Baton Rouge and that certainly appears possible, but rail and barge traffic to the chipping plant isn't something I can calculate. Either way though, short term plans for Phase 1 are for 1 million tons per year which is in line with other plants. If they can reach that, then we can take a wait and see approach for future phases.

Phillip

Possibly, but I honestly don't know much about the plants that are sitting idle. Do you have any sources I can review? There could be other mitigating factors that could be the cause of some plants not in production such as sustainability of source fiber, proximity to deep water ports or railway capacity, etc. Let's not forget that Drax is building two pellet plants and must have a reason if there are a number of them sitting idle that they could buy.

I admit, my confidence has waned in the last few weeks that things will be moving forward. The company has made financial commitments at the Natchitoches Parish Port, but unless they signed at the last minute, their lease option expired at the Port of Baton Rouge. As of about a month ago, it didn't appear that any permits had been obtained and I still haven't seen any plans submitted to the Louisiana State Fire Marshall for building permits (unless they were bundled with Drax plans).

On the bright side, it appears that a large investment bank has taken up interest in the company. The Drax presentations also mention a "Gulf Cluster", "Assessing opportunity for expanding manufacturing capacity in region", "Scale improves economics for region and port facility", and "Opportunity to purchase pellets on a delivered basis". This sounds like BMSPF with their facility next to Drax in Baton Rouge. Also looking at the forestry map in their presentation and their proximity to their Plum Creek fiber sources, the positions of their Morehouse and Amite sites are leaving a huge swath of untapped fiber sources west of those projects along the Red River. Sources that BMSPF is positioned for to build a plant that is over twice as large as the two being built by Drax.

Anyway, I don't know what to think. I swing from selling my position at these pennies on the dollar to holding on until news comes out that clarifies what is happening. The one thing I do know is I'm done buying more.

Phillip

Drax has great handouts for an upcoming investment presentation at the link below. They name several new suppliers. Unfortunately BMSPF isn't one of them.

http://www.drax.com/investor/results_and_reports/presentations/

Phillip

Yawn. . . It's way too quiet around here.

As far as some news goes, the Financial Times has a good story on Drax at this link. You have to sign up for it, but one thing I thought was interesting is the reference to a new US Department of Engergy Study that says that there is 93 million tons of logging waste and forest residue that has gone untapped. This compares to Drax's requirement for 7 million tons.

Phillip

UK Announces Sustainability Standards - http://biomassmagazine.com/articles/9514/uk-announces-sustainability-standards/

Yes, an investment bank with much deeper pockets. This is good news and points to things continuing to move forward and hopefully not diluting our positions too much.

My worries are now on the Port of Baton Rouge and getting through the permitting process. The lease option expired September 1st and the Port doesn't sound happy according to the minutes of the 8/22 board meeting:
http://www.portgbr.com/media/user/meetings/CommMtgMinutes%2008-22-13.pdf

It doesn't sound like takeoff agreements had been signed by them either. If they had, I would have thought that BMSPF would have been on the September agenda to renew the lease option.

I also checked the state Fire Marshall's website. Plans have been submitted by Drax, but not by BMSPF.

Anyway, knowing there's deep pockets now, I have no doubt things are moving forward and there's a huge driving force to make it happen, but to me it doesn't sound like the construction schedule is set in stone yet without a lease or permits in place.

Phillip

I finally have most of the answers I've been looking for, but I now have some new questions. Is Montreux Capital Corp out of the picture and a new, larger, company involved? I'm also worried about the lack of a lease at the Port of Baton Rouge and permits not completed yet.

Phillip

Nightshift, do you know how many short sellers there are? At only 1 penny it seems hard to belive they would be selling short at a time like this.

Do you know what kind of news we might be receiving in the coming weeks?

Phillip

Thanks for the encouragement. If it wasn't for the fact that I had once invested in a OTC stock that was announcing millions in new income one week only to go bankrupt the next, I probably wouldn't question every little thing that occurs here. The difference with BMSPF though is I have third party evidence that there are things going on and rather than the company issuing constant pump and dump press releases, all is silent like a true business should be. The silence is actually what has built my confidence that this isn't a scam. The other difference between this stock and the one the declared bankruptcy is that I have a much larger investment in this one. 'More of a reason I keep my eye on it.

With respect to your comment above, I have the opposite strategy. I'm fully in before the announcement. I don't have much disposable income left to invest. :)

As far as halting trading, I hope for the same and it will be good news. I'll keep my eye out if this event should occur.

On a side note, I ran into this article yesterday about the Port issuing bonds for a project. Until I saw the date, I thought this was news about last Thursday's Board Meeting. In some ways I'm glad it wasn't and to see that they have done this before. It sounds like the Port knows what they are doing.

Phillip

I added it to the iBox earlier this week. It alleviated some of my fears to hear that the company is still moving forward. I even picked up a few more shares since I read the news story.

Notice another coincidence in the article? Both Drax and BMSPF plan on production starting in the first quarter of 2015. Financing at the same time, construction at the same time, production at the same time . . . all circumstantial, but compelling support to my theory.

Phillip

Port Agenda is out for yesterday's meeting. I wonder how it went.

http://www.portgbr.com/media/user/meetings/CommMtg%2009-26-13.pdf

Phillip

I don't like the ask size. Another million shares. Could be insider dumping or our friend from last week trying to make quick buck off of the million shares purchased at 0.0025.

Phillip

I was going to ask the same question about how the Board Meeting went. They never posted the agenda which would have been illegal here in California. I think the port is being discrete since they know we're looking and they don't want to give away any insider information.

As far as short term share price goes, it's anyone's guess. We first need more eyes on this stock (besides the three of us :))which could happen if someone other than BMSPF issues a press release (ie Drax or the Port). The second thing we need is for investors to be able to calculate the valuation of the stock. I did this with what I considered conservative numbers, but with all of the uncertainty associated with the Montreux Transaction, investors need confidence that their investment won't be diluted. The last hurdle that needs to be overcome is the lack of knowledge of this new industry. Institutional investors and analysts probably don't know enough about this market to jump into it. That will take some time and education. Time is always available, but who's going to educate them? Anyway, I expect to see some short term growth, but I think the full potential won't occur until there has been proven revenues. We're several years out from that.

Phillip

Yes it sounds like there's a few of us out there since the beginning. I no longer hold FASC, but hung onto BMSPF. Only time will tell if we are complete idiots or briliant. I may have been in and out of it over the years, but have had it in my portfolio for for the bulk of that time while increasing my position in the last year or so based on my speculation of a joint venture with Drax and evidince that the project at the Port of Baton Rouge is real (at least being talked about in Board minutes). Today is D-Day for whether or not the Port approves the bond measure. They didn't post their agenda so if anyone has any news as to whether it was approved, please let me know.

Phillip

Drax Biomass Running At Half Capacity

Link: Drax Biomass Running At Half Capacity

I missed the abovementioned news story at the end of July, but the lack of biomass storage is killing Drax's production. With torrefied pellets being hydrophobic, covered storage wouldn't be necessary. This is another reason to join forces with a company with a shovel ready torrefication plant. Without the biomass plant operating at full capacity, Drax would have to rely more on their unconverted coal plants and pay the carbon tax!! Big incentive to get into the torrefied pellet business.

Phillip

Hopefully this will be the moment we've both been waiting years for. Little did I know when I bought FASC that it would spin off into VMHIF and subsequently become BMSPF. My investment has gone from a KDS micronizer machine, to a video movie warehouse, to a pellet torrification facility with a few buys and sells along the way. Little did I know how huge this had the potential of becoming. A cost effective, sustainable, low sulphur, renewable, replacement for coal. On top of everything else, power companies avoid extremely large capital expenses to construct new power plants and mothball the old. I'm in no way an environmentalist, but I am seeing green.

Phillip

Here's why I speculate that it's showtime. Yesterday, Drax was on the Agenda at the Port of Baton Rouge Committee meeting for their bond issuance. Just a mere few hundred million dollars to build pellet facilities for Drax. I don't know the outcome of the Committee meeting vote, but the fact that they've only spent the last year working to get to this point, I'd bet my shares in the company that it passed the Committee yesterday. For those who aren't familiar with how government works, Committees usually comprise of a few members of the overall Board of Directors and field or work on the details of what eventually goes to the entire Board. Assuming this did pass committee, I would expect to see this on the agenda for the Board meeting on September 26th. The agenda isn't out yet, but check on it early next week on the Port's website and I'd bet it will be on there (remember I found out Drax is "Baton Rouge Transit LLC" according to the Lousiana Secretary of State so this name is what you will see on the agenda).

Now, what does this have to do with BMSPF?? All of the circumstantial evidence has led me to believe that Drax and BMSPF are joined at the hip. I have no proof and no insider information, but A LOT of circumstantial evidence. My guess is this bond issuance for Drax is also the same bond issuance for BMSPF. Raising this capital is the key to getting what I believe both Drax and BMSPF have been waiting for before breaking ground at the Port (Notice Drax has started construction of their pellet plants up river, but hasn't started work at the Port. Coincidence?? I think not.) Anyway, as far as showtime. I think we all need to mark September 26th on our calendar. We probably won't hear anything that day (since the meeting is at night), but shortly thereafter. Stay tuned.

*peace of mind

As long as you weren't the one dumping a million shares, I've got some piece of mind. :) I just can't believe someone did that intentionally, but I'm noticing a lot of people messing around with their bid prices though trying to pick up more shares at that level.

Phillip

NiteShift, are you still holding onto your position?

Phillip

I haven't spoken to him since the million shares traded this week for $0.002. I've always figured that any information that could sway the stock price he wouldn't be at liberty to discuss so the questions I typically ask are about items that are already public information.

Phillip

I hope that's the reason. I would say that the 100 shares at 0.01 bought today is MM manipulation. It's kind of a joke to see a $1 trade just to get the share price back up.

I'm hoping it isn't the alternative and someone with insider information was dumping a million shares. We'll eventually find out if bad news gets released.

Phillip

What the hell just happened?

Valuation for Biomass Secure Power Inc.
I'm updating my valuation calculations based on a couple of new assumptions:
(1) My previous assumptions were based on torrified wood pellet costs and the company's quoted 1,000,000 ton per year production estimates. Since Phase 1 is only white wood pellets which weigh more than torrified pellets, this wasn't an apples to apples comparison. Since torrified pellets would weigh 30% less than white wood pellets so multiplying 1 million tons times the unit cost for torrified pellets I don't think is valid. It should have been 0.7 million tons per year for torrified pellets which would have reduced my previous margins from $85 million/year to $60 million/year for Phase 1.
(2) Since Phase 1 is white wood pellets and not torrified pellets, I assume they won't command the premium torrified pellets would command. Since I don't have any numbers for white wood pellet costs and the $60 million I came up with above was close to the company's estimates, I'm now using the company's EBITDA estimates of $50 million listed here to be more conservative.
(3) My previous valuation didn't factor in taxes, interest, and amortization on capital costs. My number was more of an EBITDA value. Although interest and amortization will eventually go away as it gets paid off, I want to look at short term valuation and not long term so I'm subtracting estimated interest, taxes, and amoritization.

Sales Metrics - Company Estimates - Phase 1 Only
Gross Profit= $155,000,000.00
EBITA= $50,000,000.00
Amoritization= $8,666,666.67
Interest= $5,355,054.36
Taxable Income= $35,978,278.97
Taxes= $12,592,397.64
Net Profit Margin= $23,385,881.33
Shares Outstanding= 599,991,908

Phase 1 Only:
Net Profit Margin (1 million tons/yr)= $23,385,881.33
EPS= $0.04
If P/E=5, share price = $0.19
If P/E=25, share price = $0.97

All 4 Phases:
Net Profit Margin (4 million tons/yr)= $93,543,525.33
EPS= $0.16
If P/E=5, share price = $0.78
If P/E=25, share price = $3.90

The wildcard in all of this is still how much dilution we are going to experience with the Montreux Trasaction.

Drax is on the Comittee agenda at the Port of Baton Rouge for the Agreement to issue the Revenue Bonds presumably for the financing of their plant. If Drax and BMSPF truly are joined at the hip hopefully this bond issuance will also be the same one financing the BMSPF plant and the contents of the Agreement also list BMSPF.

http://www.portgbr.com/media/user/meetings/ExCommAgenda%2009-19-13.pdf

Phillip

I've been in this stock for 12 years, so I hope no one will ever accuse me of not being patient. I'd have to admit though that half of that time, I never thought that this company would amount to anything and just didn't want to pay the commission to sell it. Once I found the article showing me the sales metrics, my perception not only changed, but I started following this industry (and company) much more closely. I still see a lot of risks, but if this company is truly legitimate, being secretive about their plans is a good thing. They don't hold patents, they have environmental groups opposing this industry, competition that could try to slow their progress, and regulatory agencies that would want to extort a great deal more if they knew how huge this is. Being under the radar is a good thing except for my deep desire for a play by play report of what's going on.

Phillip

BTW, you didn't mention what the information was that you have. Anything you wanna share? :)

Phillip

Another biomass plant going in at the Natchitoches Parish Port. It looks like they are in a different market segment though and using biomass to produce gasoline.
http://www.thetowntalk.com/article/20130824/NEWS01/308240015/Biomass-facility-locate-Port-Alexandria

Phillip