Amazon Timeframe.
I have been wondering how long it will take to generate the 1.5 Billion in log rev, since annual revenues are key to any pps determination. This type of info has been lacking in this deal. On Google, I found info that the entire Amazon basin area may have 4 billion board feet of sunken logs. FHAL releases state phase 1 (the "easier" part) will be 2.6 billion board feet.
So, on the web, I found formulas to calculate the board feet in a log, based on dimensions. I had to do some estimating, but I think a typical large amazon log should be under 200 board feet. (input welcome on this estimate). This means 2.6 billion board feet = 13 million logs. The MN1.com release on FHAL says 1 crew can do a minimum of 200 logs per day, but due to Amazon river conditions, you can only work/run barges 10 days per month. I did not understand this, so I actually am using 20 days per month in my calculations, to estimate a best case scenario. (there are stories that in some parts of the Amazon, balloons are used to lift logs out, although, this is probably in phase 2 ). If 10 days is correct, all revenues per crew would be cut in half.
To finish here, 13 million logs, divided by 4000 logs per month, = 3250 months (270 years) to generate the revenue, for 1 crew. So, obviously, many crews will be needed. It will not be a cheap undertaking. The MNI.com release discussed using several crews, but they will need a minimum of 25 crews to do this in 10 years. (no idea how many crews are planned - would love to know more specifics, since this directly affects share pps valuation). This would = 150 million in annual rev, if a crew can work 20 days per month, plus the green carbon credit income - although, since I suspect the vast majority of net profit will come from green credits, full weighting should not be given to Log rev in a pps calculation.
It seems the credits are where it's at. They were designed to encourage projects which help environmentally, and with greenhouse gas (Kyoto treaty). They are typically used on projects which are not normally financially feasable. So i think the big log undertaking may be marginally profitable, but earning credits, which could even be held for long term appreciation, is the main $$ in this. (polluting countries/operations in Kyoto signed countries buy these credits when they fail to improve upon 2000 pollution satndards.)
If anyone has info on how many credits this type of project can earn, please update me.
This is just a guess here, but due to the complete lack of specifics from FHAL, when they first announced the letter of intent, it's a start.
