Transcript Document

Investor Presentation
August 2010
Tim Haig, CEO
Chris Clinning, CFO
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
3
Energy security: An escalating issue
Oil Production by Volume
Russia
Canada Venezuela
Norway
Nigeria
United
States
Mexico
Iraq Brazil
Iran
Libya
Algeria
China
India
Saudi
Arabia
Kuwait
Source: CIA Factbook, 2010
UAE
$400B
2008 U.S. Oil Import Expenditure
35%
Oil Consumption by 2030
Angola
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 multiple
feedstock sources
~
 Soybeans
 Rapeseed
 Palm oil
 Animal fats (white grease, tallow)
2
50
particulate
~
%
matter
 Jatropha
 Yellow grease
90CO
%
~
50CO
%
 Future feedstocks (algae, etc.)
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Renewables are inevitable
Renewable
content in diesel
Clean Air Act of 2006
Gazette, April 10, 2010
2
%
by 2011
2
%
Renewable Fuel
Standard Program
RFS-2, February 2010
by 2012
Renewable Energy
Directive
Passed in 2007
5.75
by 2010
>
%
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Mandated demand for renewables is taking off
Billions of litres
0.12
0.6
1.4
3.8
7.5
14.8
0
2
2009 biodiesel production
4
7
9
11
13
15
2012 demand for renewables in diesel
8
Mandates should transform biodiesel pricing
Today
Post-mandate
(Voluntary)
(Obligatory)
Biodiesel price
Biodiesel price
+ Petroleum diesel price
+ Incentives
+ Input costs
+ Profit margin
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Historically
~
%
of production costs
are feedstock costs
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The BIOX multi-feedstock advantage
17%
57%
Soy
26%
White grease
Yellow grease
Tallow
High levels of FFAs
impede
traditional
conversion processes
Other
High FFA feedstocks
historically trade at
2008 U.S. Biodiesel
feedstock sources
High FFA
Low FFA
35-40%
discount to seed oils
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BIOX’s proprietary production process
Cosolvent
Technology
 Low temperature
(60°C)
FFA conversion vs.
FFA pretreatment
Cosolvent
(recycled)
Feedstock
100
 Atmospheric pressure
Acid
 99.99% recycled
Base
Alcohol
8
 Efficient “mass transfer”
 Permits high FFA content
– Tallow
– White grease
– Used cooking oil
– Crude palm oil
 FFA converted
 1:1 yield
Bioheat
7
Highest possible yields
>99%
Biodiesel
93
Glycerin
8
Continuous process
<90 minutes
True multi-feedstock
capability
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The impact of our technical advantage
Competition
BIOX
Higher priced low FFA feedstock
or pretreatment
= yield loss
35-40% price discount
on higher FFA feedstock
Chemistry consumption
likely higher
Cannot use less chemistry
(stoichiometrically)
Energy consumption
likely higher
Atmospheric pressure and
ambient temperature
= low energy cost
Yield: ?
Yield: 1:1
BIOX = low cost provider
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The BIOX economic advantage
Voluntary (pre-mandate)
Biodiesel fixed
to diesel price
Unprofitable
Traditional
(soy feedstock)
Biodiesel price
BIOX (multifeed stock)
Obligatory (post-mandate)
Biodiesel fixed to
feedstock price
Biodiesel price
30%
lower cost
Biodiesel directly competes
against fossil fuel prices;
Many of our competitors sit idle
Traditional
(soy feedstock)
30% lower cost +
BIOX (multifeed stock)
industry
margin
Biodiesel prices based
on production costs;
BIOX maintains cost advantage
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14
Our key assets
67
million
litres/year
Nameplate
commercial-scale facility
$
46
million
raised
in RTO
Adequate resources
to build second
processing facility
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Canada’s largest biodiesel producer
139
million
litres
produced to date
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Our Hamilton I facility
 Designed, built, owned and operated by BIOX
 Location: Hamilton, Ontario
 Biodiesel produced conforms to North American
and 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

Petroleum distribution
infrastructure

Customers
(refiners and importers)

Transportation logistics

Favourable jurisdictions

Multiple feedstocks
BIOX
Downtown
Hamilton
Shell
terminal
BIOX
facility
500 ft
Access to

Proximity to plantbased feedstock
Traditional producers
1000 ft
Biodiesel
plant
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Our next facility
No
scale-up
Financing
in place
Permitting

67 million litres/year nameplate facility

Estimated processing plant cost:
$38-40 million

No significant reengineering

No major changes in
construction methods

Established relationships with
experienced contractors
Fabrication
(9 months)
Assembly
(45 days)
Maximum
capacity
(3 months)
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Revenue generators
Biodiesel
 95% of revenue
 Off-take agreements
Glycerin
 Balance sold on North
American or European
biodiesel spot market
 Anticipate direct
sales to major
petroleum 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
14,400
41,800
Production (litres)
7,100
33,000
Sales (litres)
$6,600
$33,000
$3,100
$400
$4,500
$4,000
$6,000 $13,0002
1
(in thousands)
Sales revenue
BIOX Canada1 operating loss
prior to non-cash items
Operating loss prior to non-cash
items
Net loss
BIOX Canada = Hamilton I facility
2 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 Haig
Chief Executive Officer
Kevin Norton
Chief Operating Officer
Chris Clinning
Chief Financial Officer
Scott Lewis
Vice President, Business
Development and Sales
Nak Paik
Vice President, Operations Officer
Neil Van Knotsenburg
 Founded BIOX
 Patented the process
 Purchase patents
from UofT
 Built two pilot plants
 Raised capital for
first plant
 Constructed, commission
and operate largest plant
in Canada
Vice President, Projects
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BIOX
 Mandates should drive market economics
(demand and repricing)
 Technology leads to low cost
provider in growth markets
 Currently has assets generating cash flow
 Possess capital to build additional capacity
 Highly experienced management team
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