Recs: 3 How much will it squeeze when that first plant deal is announced?
So how much do you think this stock will squeeze when that Indonesia deal with Sumitomo is announced? Believe it or not, 28% of the float is shorted, providing LOTS of fuel for a squeeze:
shortsqueeze.com
In case you didn't notice, Insiders have been BUYING:
insidercow.com
The shorts are upset about this, and have even forced this stock back on the naked short list:
archipelago.com
The shorts really think they can naked short this thing back down using that options market maker exemption, but nothing can stop the tidal wave of buying that will happen when that first plant deal is announced.
The company has a new chairman, they kind of guy who wouldn't have signed up for the job if he didn't think this Indonesia deal was going to happen. Listen to Mr. Walker's speech at the end of the stockholder's meeting:
evgenergy.com
Also notice that in that same meeting Collins declared that ALL test burns have gone well. Customers love the product. They could be selling a billion tons of K-fuel, if they only had the production capability.
Sumitomo has already made an equity investment in Evergreen Energy, and they're darn serious about taking advantage of this opportunity:
sumitomocorp.co.jp
Sumitomo isn't screwing around, they really did their homework on the Indonesia deal:
blog.evgenergy.com
(Not mentioned in the above blog is the fact that Sumitomo even hired a 3rd party to evaluate the prospects for the Indonesian deal.)
How much steel will the new plant require? Has anybody noticed that the price of steel has started to come down in price lately?
thefabricator.com
Who designed the new plant? Bechtel did. Want to see what it looks like? Upper left corner of this document:
evgenergy.com
None of the above evidence of a pending deal in Indonesia is as significant as the fact that thermal coal is currently floating around the area of $200/ton in Asia. Combine that with the fact that Evergreen has figured out how to convert unmarketable lignite into a product comparable to thermal coal, and you've got a solid business case for building the proposed 1.5 Million ton/yr plant:
evgenergy.com
Look at it like this: Even if the lignite feedstock costs $40/ton to dig out of the surface mine, and another $40/ton to process it, that still leaves an operating margin of $120/ton. Now multiply that by the plant's rated capacity, 1.5 million tons per year, and you get annual positive cash flow somewhere in the area of $180M. At that rate the plant would pay for itself in under a year! No wonder Sumitomo wants this deal.
But, that's just the tip of the iceberg. Imagine how many coal producers are going to want one of these plants next to their mine after the first Bechtel built plant proves itself. Rumor has it that BHP Billiton already bought a license to build their own plant. Now add in the revenue associated with Evergreen's Buckeye coal mining subsidiary, and future profits from the C-Lock subsidiary. I
Folks, I know this company has a long ugly history. I won't deny that. But one of the big lessons they learned is that the K-fuel process can convert otherwise unmarketable lignite into viable power plant fuel. Like turning lead into gold.
Get ready to see the short squeeze of a lifetime. How high will it go when the first PR is released with a picture of Collins and various Japanese and Indonesian dignitaries wearing hard hats, grasping gold plated shovels, as they break ground on a new plant in Indonesia?
P.S. Don't tell Vod the Indonesia deal is coming together, as I have placed him and all his negative aliases on IGNORE. |
