BFRE kept its progressive appreciation on Friday, adding another 28% to its value and closing at $0.64 for a share on almost 429,000 share volume. The total gain for the stock since the first published press release about the new contracts of the company exceeds 357% and the shares are already overbought.
The two latest optimistic press releases concerned one of the two planned by the company bio-refineries in North America, namely the one located in Fulton, Mississippi. According to the announcements, BFRE has secured a 15-year off-take agreement for the sale of all the ethanol produced by the plant, as well as a 15-year supply contract with a company which would provide BFRE’s Fulton plant with cellulose materials to produce its full planned capacity of 19-million gallons of ethanol per year.
No financial details about any of the two major deals have been provided, but it seems that solely the opportunity to report first operational revenues made the market so excited, although as of the end of June the proposed plant in Fulton was still waiting for an approval of its water pollution prevention plan before “ground can be broken on the Fulton project” and no news on that issue have been released yet.
For the Fulton project, BFRE has been awarded by the U.S. Department of Energy with a cost share grant of up to $88 million, the proceeds from that award representing the largest part of the company’s revenues so far. The grant means that the company will get the development and the construction cost for the plant repaid and up to date the BFRE has received reimbursements of approximately $6,316,000 under these awards. The grant also represents the main source of liquidity for the company so far.
As BFRE has not engaged with any concrete dates on which the productions plant will be ready and start functioning at full capacity, the market’s current reaction seems to be reflecting solely the potential profits and cash flows, and by now investors appear very optimistic about BFRE’s ability to grow its shareholder value.
