They Will Still be On the Nasdaq
because Of the R/S
Here are some things Im Considdering when Im Selling Into Madera Announcement and buying back after the R/S in May.
Stock' Wrote this Up
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I try to think about the situation Pacific Ethanol and NK, and expectations for the future if the next two years is positive margin environment. Experts are expecting a minimum of two years with a positive margin.
The starting point for thinking is, that we know, Pacific Ethanol is making money in the current production environment with positive margin and valuable D6 RINs.
When there is a profit, then working capital must be adjusted for the better, without investment levels fall below the possible and reasonable, but what is there to invest in, in order to improve margins and earnings best for the economic future.
We are familiar with Pacific Ethanol invests in Corn Oil Extraction, Cellunators and implements Pathway Platform yeast and enzyme technology in their businesses, and that it increases the yield from 2.8 to 3.11 at full installation as on Stockton.
Earnings from the investment of Stockton will approximately look like:
$ 5,539,000 per year from Corn Oil Extraction
$ 6,480,000 per year from Cellunator milling technology
$ 6,480,000 per year from Pathway Platform (new yeast and enzyme technology)
$ 18,500,000 per year in round numbers, or $ 4,625,000 per quarter
So is Madera Plants 40MGY unproductive in a time of positive margin and valuable D6 RINs, and to get the company into production, is also investing, but how much earnings will a Madera restart add. to Pacific Ethanol per year and per quarter.
Let's just imagine Madera starts with 100% corn feedstock.
Margin is positive in California and not below $0.25 per gallon.
D6 RIN is $0.69 per gallon at the moment.
$10,000,000 per year from margin ($0.25 * 40,000,000)
$27,600,000 per year from D6 RINs ($0.69 * 40,000,000)
$37,600,000 per year in round numbers, or 9,400,000 per quarter
By putting Madera Plant into productive earnings will also create the basis for investment in Corn Oil Extraction, Cellunators and Pathway Platform at Madera, and later Biogas CHP and D5 RINs.
I think it's the choices made by the Board of Directors and NK ... let's get Madera put into production as it currently looks like the best investment, while also adding additional opportunities for future investment and earnings.
$ 3,693,000 per year from Corn Oil Extraction
$ 4,320,000 per year from Cellunators
$ 4,320,000 per year from Pathway platform
Later $ from Biogas CHP / Advanced D5 RINs
Can we believe that is what we are hearing Tuesday ... Madera come online.
I believe it is a good guess based on economic considerations.
