Expect a 2 Week Delay
Last November, in their SEDAR filings, Sonic indicated they would have their first upgrading plant operational by June 2010. At the time, we thought that they might be having issues with Mirex, because that plant should have been operational by April. It later became obvious that the Company was placing Mirex on the back-burner, while looking for opportunities in Albania.
In February, they finally announced the much anticipated deal with an Albanian firm, known as Albnafta, to process their heavy oil. Reiterating their November statement, they re-affirmed the first plant to be operational by June 2010. Then silence fell upon us.
Given the timelines, I was expecting a June 1st start-up date. Nevertheless, a little Icelandic volcano placed a damper on their plans, and delayed the start-up date. I just found out that we can expect installations to be completed in 2 weeks from now (mid-June).
Yes, it can be frustrating that the share price is not reflecting current events. I'm going to attribute the neglect of news to Gun-Shyness: This Company has a history of making promises, creating expectations, and then falling short - way short. Remember, the share price was over $3 once upon a time.
I'm guessing they don't want a repeat of history, and are waiting until events are definate. Nevertheless, as we approach the magic date (June 29th), I expect they will say something rather sooner than later - they have no choice.
It doesn't matter what the share price is doing today, because I truly believe it will be well over $1 in a year from now if this thing works according to specs.
The conspiracy theorist in me believes that they are purposely keeping the share price low so that their friends -the ones who didn't get their orders filled in the Private Placement- have a chance of picking up shares on the cheap; Remember the PP was oversubscribed by a two to one margin.
Nevertheless, this is still a risky venture. Although the generator was tested over and over again with the same lab results using small sample sizes, it has yet to be tested in the field with amounts over 1,000 BOD. For example, they stated that 97% of the added solvent, is recoverable (to be used over and over again). The solvent is the highest expenditure; If that number can't be matched in the field... well... let's not go there.
The Company should know the true costs by mid-July. Nevertheless, the Company should have an idea by 10AM June 29th, the date of the AGM. Unfortunately, I don't live in Vancouver, but a friend of mine has agreed to attend the meeting on my behalf.
Other Events on the Horizon
The Alberta Research Council should be making their final determination this week as to whether or not PetroSonic is entitled to a grant. This grant would pay 1/3 of the capital cost associated with building a plant, and pay the plant's first year operational expenses. The caveat is that the plant has to be built in Alberta.
Altough I stated over and over again since last fall (after Chavez started shipping his oil to be processed in China, causing the price of North American Heavy Crude Oil to jump) that the Mirex project would be unprofitable given the current spread in North American Heavy/Light Oil, a research grant would nevertheless aleviate some of this burden.
The other event is Nalco-Mobotec. The joint patent was taken out last July. We should hear something about that over the next month -if not from Sonic- then from Nalco.
P.S. I picked up some more shares at 10.5 cents last week.
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