The biofuels industry, in particular Ethanol and Biodiesel will be the fastest growing industry in the world for the next several years. The present supply of ethanol is considered inadequate by half to meet the increased demand from the elimination of MTBE that is going to occur on May 5th.
Veridium is involved in both the ethanol production and biodiesel production industries.
As sales are unlikely to stop cold, and have been occurring at approximately 1 per week, each generating roughly a $1.5 million/year continuing income stream for the life of the system/plant. an earnings stream for the next year of $14 million is very conservative, for subsequent years Veridium's 4 technologies will generate continuing growth in at least the 50-100 percent and greater range for the foreseeable future.
Those four technologies three affecting the ethanol industry and one affecting the meat packing industry, are Corn Oil Extraction System(TM), Oil Extraction System (meat packing), CO2 sequestering (Starch Production) and High intensity Ultrasonic technology.
The Corn Oil Extraction System(TM) extracts corn oil from Dried Distillers Grain, (DDG) a by product of the fermentation of Corn Kernels that sells to farmers as animal feed for approximately 3 cents per pound. Thus the corn oil feed cost is 3 cents per pound, the wholesale price of corn oil is approx 27 cents per pound. A significant increase in product value. Veridium has a unique business plan for this technology, installing at no cost to the ethanol refinery, but requires a purchase contract to buy that corn oil produced at a discount to the current market price at the time. This discount gives Veridium a continuing year on year income from any sale. (Sales so far 4 ethanol plants)
The Oil Recovery System recovers the fat content from the water effluent from meat packing plants. Veridium's business model for this technology is two fold, Veridium keeps all fats recovered and the meat packing plant pays Veridium a fee for reducing their waste sludge by approximately 80%. Quantities involved are for the chicken processing industry, 50,000 rail cars. Veridium would produce 40,000 rail-cars of chicken fat for processing to biodiesel reducing the disposal problem to 10,000 rail-car loads, which are disposed of by land application. The figures while different affect the hog packing industry, beef packing industry, turkey packing industry, etc. The potential US wide market is in excess of 300,000,000 gallons of diesel feedstock. (Sales so far one beef packing plant)
CO2 sequestering, Veridium's technology differs from a similar commercial process as Veridium brings the sun to the algae rather than vice versa, this requires a significant reduction in the foot print for the bioreactor. Veridium is currently building a prototype plant (portable) that will be used to demonstrate this technology by utilizing the waste gas streams at interested refineries. This technology produces a product that is 94% starch (convertible to ethanol, and 6% oil (convertible to biodiesel. It is my guess the business model will be Veridium receives the Oil and the refinery processes the starch to ethanol. This technology is applicable to conventional fired electric power plants. It may be sold just to reduce the carbon dioxide output of these plants with Veridium receiving all algae output, just a guess.
Ultrasonic process, biomass ethanol production requires exposing the cellulose and hemicellulose to the enzymes that break it down into sugar, this requires removing the lignin from the surface of the cellulose and hemicellulose and then creating the greatest possible surface area for the enzymes/yeast to act on. This process is far simpler and less energy intensive than mechanical crushing and shredding. I do not yet know what Veridium's business model for this technology is.
All 4 technologies are being inquired about by the relevant industry. Sales of at least the three (oil extraction, CO2 sequestering are expected this year), as the biomass to ethanol industry develops the 4th technology may well be the adopted technology of choice to pulverize biomass.
As biofuels are a large part of the solution to the Peak Oil problem, Veridium is ideally situated to grow at hyperbolic rates.
Another big WAG, expect Veridium to reach price to earnings ratios much higher than they are now, include the increase in earnings and Veridium's price is your guess. In any case much higher than today's close of 3.7 cents.
Do your own Due Diligence, the above is just my understanding of what is happening with Veridium.
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