BlueFire Renewables Launches Subsidiary and Formalizes Funding Agreements in 2011; Sets Sights on Further, Significant Milestones for 2012
Dear Fellow Shareholders:
First, I would like to take this opportunity to wish you and yours a joyous Chanukah and Christmas season and a very Happy New Year. It is this time of year when we reflect on what this year has brought, the things lost and the things gained. The relationships forged through the fire of trials and the people we lost along the way.
We lost a great man, friend and visionary this year from the BlueFire family, Bill Davis. He was a man’s man and was crusty when needed, tender and caring when no one was looking. He joined BlueFire as it was being created in 2006 and lead the efforts with Necy Sumait to secure the DOE Grant and the Lancaster project. Later he was critical to the development of the EPC Contract with MasTec to build the project in Mississippi. We were blessed to know Bill and send out to his family the love of Jesus and the appreciation for sharing him with us.
Management this year focused on the need to grow the company in a never-ending changing business environment. The formation of a wholly owned subsidiary coupled with exciting new partnerships has made 2011 a pivotal year for BlueFire Renewables. This year-end review is to provide you with an update on our progress.
In early 2011 the company signed a purchase agreement, commonly referred to as an equity line for public companies, for up to $10 million with Lincoln Park Capital Fund, LLC (“LPC”), a Chicago-based institutional investor. This money allowed BlueFire to fulfill short-term cash needs and continue to pursue financing opportunities on our projects.
To that end, in Q4 2011, with assistance from the National Center for Sustainable Development, (NCSD), BlueFire entered into a Memorandum of Understanding (“MOU”) with China Huadian Engineering Co. LTD to invest equity and debt into the integrated Power Plant and Biorefinery in Fulton, MS. Under the MOU, Huadian has agreed to invest equity by purchasing an interest in the BlueFire Fulton Renewable Energy LLC and, optionally, debt for the Fulton project to complete financing and construction for this cellulosic ethanol facility.
Additionally, upon the initial success of the Fulton Project, the agreement intends for Huadian to invest equity and/or provide debt for the development of five (5) additional plants in the United States. The MOU also contemplates the formation of a Development Joint Venture to develop similar projects in China.
NCSD is aligned with the China CDM Fund under the supervision of the Ministry of Finance of China and has, since 2009, worked closely with counterparts in the Chinese government and industry. Recognized by both NCSD and the CDM to be a tangible and immediate example of the cooperation between the US and China on low carbon economic development, the BlueFire concept has been introduced by NCSD to various other entities in China and it appears that BlueFire will play a continuing role as potential technology supplier to both U.S. and China. NCSD is going to play a continuing critical role as BlueFire and SucreSource play an ever-expanding role in the Advanced Biofuels space.
To meet increasing demand for cellulosic sugars (“The New Oil”) BlueFire formed SucreSource, LLC, a wholly owned subsidiary that will manufacture cellulosic sugars from biomass for Biofuel, Bioplastic and Specialty Chemical markets. Established in November 2011, SucreSource will utilize BlueFire’s proven and patented high yield process of economically unlocking cellulosic sugars from biomass to produce multiple sugar streams for these growing markets. SucreSource will capitalize on our existing process design packages, providing either a 34,000 tons per year or 163,000 tons per year source of cellulosic sugars. SucreSource is actively pursuing partnerships opportunities to deploy the technology in a wide range of industries.
With support from the County of Itawamba and the City of Fulton and excellent work done by Century Construction, BlueFire also completed initial site-preparation on the company’s Fulton, MS cellulosic ethanol plant. Construction for the Fulton project is expected to create about 700 jobs and will commence upon securing final financing for the complete project. Once completed, the Fulton project will utilize the region’s green and wood wastes as feedstock for the production of approximately 19 million gallons per year of cellulosic ethanol sold under long-term contract to help fulfill the demand under the Federal Renewable Fuel Standard established under the Energy Independence & Security Act.
We were also pleased to announce that Joe Sparano has joined the Company’s Board of Directors. As former President and, subsequently, Executive Advisor to the Chairman of the Board of the Western States Petroleum Association (WSPA), as well as former president of Tesoro Petroleum’s West Coast Regional Business Unit, Sparano is a much-welcomed addition to the BlueFire Renewables board.
Our progress in 2011 further established that BlueFire is more than just an ethanol company. The continued expansion of our capabilities demonstrates our spirit for innovation and development of cleaner alternatives to Fossil fuels in the United States and across the globe.
We look forward to an even more exciting 2012 as BlueFire closes the financing for the Fulton project and embarks on its first plant with SucreSource. The coming year will be attacked with the vigor that it requires to be successful, dominant and sustaining in the years to come by the dedicated people of BlueFire and the partnerships we have forged. Keep us all in your prayers for that is the true strength and success of this company, invested to change the world! —–Arnie Klann