Investor Presentation August 2010 Tim Haig, CEO Chris Clinning, CFO
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Transcript of Investor Presentation August 2010 Tim Haig, CEO Chris Clinning, CFO
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Investor PresentationAugust 2010
Tim Haig, CEO
Chris Clinning, CFO
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Forward-looking statements
This presentation and our answers to questions contain statements about expected
future events and financial and operating results of BIOX that are forward-looking.
By their nature, forward-looking statements require BIOX to make assumptions and
are subject to inherent risks and uncertainties. There is significant risk that the
forward-looking statements will not prove to be accurate. Readers are cautioned not
to place undue reliance on forward-looking statements as a number of factors could
cause actual future results and events to differ materially from that expressed in the
forward-looking statements. Accordingly, our comments are subject to this
disclaimer and qualified by the assumptions, qualifications and risk factors (including
those associated with legislation affecting the biodiesel industry, the availability of
producer payment programs, and commodity prices) referred to in BIOX’s public
disclosure documents filed with Canadian securities regulatory authorities. Except
as required by law, BIOX disclaims any intention or obligation to update or revise
forward-looking statements.
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This IS NOT sustainable
ENERGY SECURITY
FINITE DIRTY
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Energy security: An escalating issue
35%SaudiArabia
RussiaUnitedStates
ChinaIndia
Iran
Canada
UAE
VenezuelaMexico $400B
2008 U.S. Oil Import Expenditure
Oil Production by Volume
Oil Consumption by 2030
Angola
Nigeria
AlgeriaKuwait
IraqBrazil
Norway
Libya
Source: CIA Factbook, 2010 Source: Congressional Research Service, 2008
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This IS sustainable…
DOMESTIC RENEWABLE CLEAN
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A better fuel for a cleaner world
Produced from multiplefeedstock sources
Soybeans
Rapeseed
Palm oil
Jatropha
Yellow grease
Animal fats (white grease, tallow)
Future feedstocks (algae, etc.)
CO2
90
50CO
particulate matter
50
~
~
%
%
%
~
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Renewables are inevitable
Clean Air Act of 2006Gazette, April 10, 2010
Renewable Fuel Standard ProgramRFS-2, February 2010
Renewable Energy DirectivePassed in 2007
Renewablecontent in diesel
by 2011 2%
by 20122> %
by 20105.75%
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Mandated demand for renewables is taking off
2012 demand for renewables in diesel2009 biodiesel production
Billions of litres
4
0.60.12
3.81.4
14.87.5
0 2 11 139 157
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Mandates should transform biodiesel pricing
Biodiesel price
+ Petroleum diesel price
+ Incentives
Today Post-mandateBiodiesel price
+ Input costs
+ Profit margin
(Voluntary) (Obligatory)
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of production costs are feedstock costs
80%~Historically
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The BIOX multi-feedstock advantage
High FFA feedstocks historically trade at
35-40%discount to seed oils
impedeHigh levels of FFAs
traditionalconversion processes
2008 U.S. Biodiesel feedstock sources
Low FFAHigh FFA
17%
26%Other
57%Soy
White greaseYellow grease
Tallow
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BIOX’s proprietary production process
CosolventTechnology
FFA conversion vs. FFA pretreatment
Acid
Base
Cosolvent(recycled)
Feedstock100
Alcohol8
Biodiesel93
Bioheat7
Glycerin8
Highest possible yields >99%
Continuous process<90 minutes
True multi-feedstock capability
Permits high FFA content– Tallow– White grease– Used cooking oil– Crude palm oil
FFA converted
1:1 yield
Low temperature (60°C)
Atmospheric pressure
99.99% recycled
Efficient “mass transfer”
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The impact of our technical advantage
Competition BIOX
Chemistry consumptionlikely higher
Higher priced low FFA feedstockor pretreatment= yield loss
Yield: ?
35-40% price discounton higher FFA feedstock
Cannot use less chemistry (stoichiometrically)
Yield: 1:1
Atmospheric pressure andambient temperature= low energy cost
Energy consumptionlikely higher
BIOX = low cost provider 13
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Biodiesel directly competesagainst fossil fuel prices;
Many of our competitors sit idle
Biodiesel prices basedon production costs;
BIOX maintains cost advantage
The BIOX economic advantage
Obligatory (post-mandate)Voluntary (pre-mandate)
Biodiesel fixedto diesel price
Unprofitable
30% lower cost
Traditional(soy feedstock)
Biodiesel price
BIOX (multi-feed stock)
Traditional(soy feedstock)
30% lower cost +
industry margin
Biodiesel fixed to feedstock price
Biodiesel price
BIOX (multi-feed stock)
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Our key assets
Nameplate
commercial-scale facilityAdequate resources
to build second processing facility
67
million litres/year 46 million
raised in RTO
$
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Canada’s largest biodiesel producer
161 produced to date
millionlitres93
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Our Hamilton I facility
Designed, built, owned and operated by BIOX
Location: Hamilton, Ontario
Biodiesel produced conforms to North Americanand EU standards
Operating at full production levels since April 2008
Small footprint 10,000 ft2
Modular design
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We select the optimal locations
Access to
Proximity to plant-based feedstock
Access to
Petroleum distribution infrastructure
Customers(refiners and importers)
Transportation logistics
Favourable jurisdictions
Multiple feedstocks
Traditional producers
BIOX
Biodiesel plant
1000 ft
500 ft
BIOX facility
Shellterminal
Downtown Hamilton
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Our next facility
Financing in place
Fabrication (9 months)
Assembly (45 days)
Maximum capacity
(3 months)
Permitting
67 million litres/year nameplate facility
Estimated processing plant cost:$38-40 million
No significant reengineering
No major changes inconstruction methods
Established relationships with experienced contractors
Noscale-up
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2020
Glycerin
Revenue generators
Biodiesel 95% of revenue
Off-take agreements
Balance sold on North American or European biodiesel spot market
Anticipate directsales to majorpetroleum companies(obligated parties)
Carbon credits
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Corporate overview
TSX symbol BX
Market capitalization $52.4 mm
Share price* $1.15
Cash $31.6 mm
Working Capital $35.0 mm
Debt $12.0 mm
Shares outstanding 45.7 mm
* As of Aug 10, 2010
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2010 Q3 review
Q3 2010 YTD (in thousands)
14,400 41,800 Production (litres)
7,100 33,000 Sales (litres)
$6,600 $33,000 Sales revenue
$3,100 $400BIOX Canada1 operating lossprior to non-cash items
$4,500 $4,000Operating loss prior to non-cash items
$6,000 $13,0002 Net loss1 BIOX Canada = Hamilton I facility2 Included $3.9M of non-recurring non-cash warrant valuation charges and non-recurring costs of $0.6M related to the amalgamation
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Management
Tim HaigChief Executive Officer
Kevin NortonChief Operating Officer
Chris ClinningChief Financial Officer
Scott LewisVice President, BusinessDevelopment and Sales
Nak PaikVice President, Operations Officer
Neil Van KnotsenburgVice President, Projects
Founded BIOX
Patented the process
Purchase patentsfrom UofT
Built two pilot plants
Raised capital forfirst plant
Constructed, commission and operate largest plantin Canada
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BIOX
Mandates should drive market economics(demand and repricing)
Technology leads to low costprovider in growth markets
Currently has assets generating cash flow
Possess capital to build additional capacity
Highly experienced management team