Some calculations on production capacity. Please take a look at my variables and let me know if I missed something:
CCG LOI per 12/21/10 8-K states expected average sales of 2,500 MT of canola oil per month. This equals approximatley 30,000 MT of oil per year.
The Regina plant has a stated capacity of 19,700,000 liters of oil crushing capacity per year, or 18,250 MT of oil per year. (10/31/10 10-Q)
The rental agreement for the Culbertson facility states that CPOW will crush at a mininimum 2,000 MT of seed per month. This is equal to a minimum crush of 24,000 MT of seed per year. There are 2,205 lbs. per MT. That is a minimum required crush of 59,920,000 lbs. of seed per year. Based on what I can tell, 50 lbs. (1 bushel) of canola oil seed produces 11 liters of oil. Dividing 59,920,000 lbs. of seed per year by 50 lbs. equals 1,058,400 bushels. Multiply this by 11 liters per bushel gives a minimum required oil production of 11,642,400 liters per year. That equates to an approximate minimum annual production of 10,800 MT of canola oil per year.
In addition to the base monthly rent of the Culbertson facility, there is additional monthly rent of $15 per MT of seed crushed in excess of the minimum 2,000 MT per month required under the agreement. I cannot find anything that gives the total crush capacity of the Culbertson facility, but the example in the rental agreement for the excess monthly rent uses 5,000 MT per month. Assuming this as the maximum, the Culberston facility would have the ability to produce up to approximatley 27,000 MT of canola oil per year.
Regina (18,250) plus Culbertson (27,000) equals capacity of approximaltye 45,250 MT of canola oil per year. The CCG agreement was expecte to average 30,000 MT of oil per year. That appears to give excess capacity to 1) service existing and future customers and 2) the rental agreement for Culbertson also states CPOW will process, at the Landlord's request, up to 3,000 MT of camilia seed per month for the Landlord.
IMO, this provides pretty convining evidence the CCG deal has either gone through or is going to go through, as I see no reason, based on current output, for CPOW to incrase its capacity to this degree.
I have not included Bridgeport becuase it appears this facility is dedicated to the production of bio-fuel, not canola oil. This fits with the most recent 10-Q in which management states, "We also plan to research acquisition of a U.S. based biodiesel operation to assist in meeting this production goal and to capitalize on a ‘blenders credit’ that is provided by the U.S. government."
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