great afterhours news fri:Raven Biofuels Signs MOU With Kamloops Indian Band for Feedstock and Biorefinery Development
Friday November 7, 4:30 pm ET
PARAMUS, NJ--(MARKET WIRE)--Nov 7, 2008 -- Raven Biofuels International Corporation (OTC BB:RVBF.OB - News) ("Raven" or the "Company") is pleased to announce that it has entered into a Memorandum of Understanding ("MOU") with the Kamloops Indian Band ("KIB") located in Kamloops, British Columbia, Canada, the purpose of which is to further the development and construction of a proposed ethanol biorefinery and cogeneration power plant in conjunction with KIB.
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As part of the agreement, KIB (www.kib.ca) would provide a site ideally situated for industrial use near Kamloops, BC. KIB brings significant access to feedstock resources secured via a multi-year Provincial forestry agreement in which KIB has rights to 124,000 cubic metres of beetle-killed wood within the Kamloops Timber Supply Area. The forestry agreement augments a forest and range agreement signed by the band in 2005, which granted $2.5 million in shared revenues and 272,000 cubic metres of timber over five years.
Recent meetings in Kamloops have led to the agreement between both parties of a non-binding MOU which outlines the mutual interest towards pursuing an alliance leading to the construction of a cogeneration power facility and biorefinery utilizing technology and expertise provided by Raven plus a site, feedstock and other resources provided by KIB. Mr. Ken Day of Price Biostock (www.pricebiostock.com) was instrumental in introducing Raven to KIB. Price Biostock will maintain a role in providing feedstock expertise and management in the proposed venture.
Raven, through its Canadian subsidiary, and KIB plan to quickly move ahead and develop a course of action for the lease of a 30-acre site located near Kamloops, BC with direct rail and road access for the construction of an environmentally safe facility. Current plans identify an initial annual output of 7 million gallons (MGY) of fuel grade ethanol and 4 million gallons of furfural, furfural alcohol, related eco-friendly derivative chemicals and lignin cake. Due to the size of the proposed location, future capacity could be increased to double the plant's production based on its current design.
Estimated capital expenditure for the initial plant (not including the cogeneration power facility) is anticipated to be CAD $33 million with projected revenues of CAD $44 million per year. The initial refinery would employ approximately 30 people directly and provide other related regional economic benefits such as the ongoing provisioning of feedstock to the refinery.
Planning for a definitive agreement includes the execution of a feasibility study to develop arrangements with KIB for a continuous supply of approximately 500 dry ton / per day of organic cellulosic waste. This feedstock would primarily be wood chips from regionally sourced, mountain pine beetle-killed wood fiber as well as other appropriate wood waste sources from the area.
Additional studies would include safe transportation planning as well as the development feasibility of a co-generation plant to provide process steam and power to the proposed biorefinery which offer added financial benefits from offset revenues via the sale of power to the grid and/or the local area. Fuel for the electrical plant is identified as hog fuel consisting of bark and waste wood also sourced primarily from the pine kill forest lands.
Company Management, in conjunction with its engineering firm, will conduct an assessment of all necessary permitting and conduct a full environmental survey in accordance with government guidelines and further plan to assess the possibility of training programs undertaken by Raven for the purpose of establishing employment of band members towards the operation of the plant. The MOU identifies that discussions will include the possibility of an equity investment and ownership from KIB in Raven and/or the projected plant as well as other mutually beneficial business opportunities including the possible development of the Raven brand as a First Nations commercial brand offering a full product line of renewable fuels and eco friendly specialty chemicals as well as future E85 gas stations in British Columbia and other parts of Canada.
Further specifics outlining the agreements between both parties will be made upon completion of negotiations, full details of which will be made publicly available at that time as part of the Company's regulatory disclosure filings with the Securities and Exchange Commission ("SEC").
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