RE:RE:RE:RE:RE:RE:RE:I Agree with 1320racing
Start with this one:
BioExx Announces Plan to Advance Protein Isolate Production to 2009
Tuesday, 23 June 2009 15:30
Highlights
• Isolate production can be accelerated to late 2009 from early 2011
• Isolates to be incorporated into single system capable of full range of proteins
• Earlier implementation of Isolates would enhance margins and reduce operating risk
• GRAS, HACCP, GMP Plus, and ISO 22000 all expected by year-end
TORONTO, – JUNE 23, 2009 – Bio-Extraction Inc. (TSX-V: BXI) (“BioExx” or “the Company”) is pleased to announce that it has developed a plan to commence production and sales of its high-value Protein Isolate and Hydrolyzed Protein products (together “Protein Isolates”) before the end of 2009. Originally, BioExx had planned to reach this very significant milestone in early 2011. The advanced schedule, which does require additional equipment, flows from the enhancements to the design of its extraction process as announced on April 22, combined with continued progress with regulatory certifications and strong market demand.
The planned system builds upon the existing design utilizing provisional patent applications in the United States (and subsequent PCT applications) for both its Protein and Extraction processes, and will now allow for the production of all grades of proteins from one integrated process. The key additional equipment in the new BioExx protein system is well proven in a broad range of food processing applications, including the production of whey, soy, and pea proteins.
The original plan to commence Isolate production in early 2011 involved a significant additional expenditure to build what was essentially a separate process added to the initial lower-value Protein Concentrate plant. The accelerated Isolate producing process will require that additional planned capital expenditures be made earlier, but will avoid the redundancy of some equipment that would have occurred by installing the systems in separate phases. To fund the accelerated process, the Company intends to access a combination of proceeds from the exercise of outstanding share purchase warrants which expire in January 2010, and other non-dilutive sources of capital that may be available. To achieve the goal of producing Isolates by the end of 2009, BioExx will seek the cooperation of warrant holders to exercise their warrants on a steady basis between now and expiry. If the warrants are exercised at a slower pace than desired, the accelerated start-up date could shift commensurately to as late as June 2010.
“Despite the many prior accomplishments by BioExx, we believe this is the most significant milestone achieved to date,” said BioExx CEO Chris Carl. “The production and sale of high-value proteins has always been our end goal and the key driver of shareholder value in this business. To be able to reach the Isolate production goal much earlier than planned, and in a manner which can deliver enhanced upside while at the same time mitigating risk, is an accomplishment of which we are very proud.”
To smooth the implementation and scale-up of Isolate production, BioExx will initially install a system which will run at approximately half of target Isolate capacity. As production and cash flow grows, additional equipment will be added to increase capacity to full plan. This approach is expected to facilitate production volumes which are in line with typical ramp-up rates while at the same time deferring and reducing at-risk capital.
The Company believes that in addition to driving higher revenues and margins by entering its higher-value protein markets earlier, this accelerated plan has several risk mitigation benefits that include:
• The protein system to be deployed would be capable of producing the entire range of specialty proteins, versus an implementation capable of producing only lower-end Protein Concentrates;
• Converting from a Concentrate-only system would require additional equipment and processes for Isolates, some of which would be redundant, and while this was originally thought unavoidable, it is not acceptable in the presence of a demonstrated ability to implement an integrated system capable of producing both products;
• An accelerated deployment of the Isolate system provides for an extra year’s experience in Isolate production and sales which is a key benefit for the much larger second facility which would then be able to commence production of Isolates at start-up;
• Successful implementation should result in enhanced cash flow on an earlier schedule, through the production and sale of high margin Isolates, which typically sell for about $6,000 per metric tonne versus Concentrates at $1,000 per metric tonne, and which should result in better access to, and a lower cost of, capital for funding of the second plant.
To enable food-grade specialty protein sales in the United States, BioExx will require GRAS (Generally Regarded As Safe) status. GRAS is a self-affirmed food safety designation which is administered by independent third parties in accordance with the regulations of the US Food and Drug Administration. Based on efforts to date, BioExx expects to self-affirm its GRAS status before the end of 2009, which would allow it to commence the sale of Isolates. In the event that this designation is unexpectedly delayed, the integrated nature of the BioExx protein system will still allow BioExx to produce and sell Protein Concentrate products for markets that do not require GRAS, such as specialty feeds.
The Saskatoon plant will also need to have demonstrated that it has implemented and maintained its procedures in a manner that complies with HACCP, GMP Plus, and ISO 22000. Certification for all of these processes with respect to Phase 1 operations is well advanced and nearing completion. BioExx expects to complete preliminary work with respect to Protein production prior to the planned start-up later this year.
Specialized protein markets are very strong and are widely expected to continue to grow over the long term, driven simply by demand fundamentals exceeding supply. BioExx continues to receive very strong interest in all of its proteins products, with considerable emphasis on Isolates, from around the globe. By working through its primary distributor and in some cases directly, BioExx is excited to be able to offer a solution that will enable these customers to be serviced considerably earlier than originally anticipated.