Biomass Secure Power Inc. (BMSPF)

[PhillipD]

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.