D3MAX Update 2017 FEW. Mark Yancey, CTO D3MAX LLC Office: (701) Cell: (303)

Transcription

1 D3MAX Update 2017 FEW Mark Yancey, CTO D3MAX LLC Office: (701) Cell: (303)

2 Introduction to D3MAX D3MAX, LLC is a startup technology company created by BBI International in 2015 to develop and license BBI s corn fiber-to-ethanol technology to ethanol plants in the US, Canada and other countries BBI began developing the technology in 2007 and received a patent in 2012; the patent is now owned by D3MAX D3MAX is owned by its investors and founders; the company is managed by a board of managers which includes Joe and Tom Bryan, Mark Yancey and a General Manager from an ethanol plant Our goal is to license the D3MAX technology to 50 or more of the 200 dry mill ethanol plants in the US

3 D3MAX is a Bolt-on Technology

4 Key Process Steps The D3MAX process consists of five primary process steps: 1. Pretreatment converts the cellulose, hemicellulose and residual starch in the wet cake into fermentable sugars 2. Enzymatic Hydrolysis converts the remaining cellulose in the wet cake to additional glucose; oligomers created in pretreatment are converted to monomers 3. Fermentation with a GMO yeast converts sugars to ethanol 4. Distillation separates the ethanol from the whole stillage 5. Decanting to dewater the high-protein feed coproduct

5 Advantages of D3MAX Corn fiber in wet cake has been cooked by the ethanol plant resulting in low pretreatment temp and pressure (lower capex and opex) True plug flow pretreatment reactor results in higher sugar yields High solids in wet cake results in lower capex and opex Low cellulase enzyme dose due to low lignin in wet cake and high conversion of cellulose to glucose in pretreatment (lower opex) True bolt-on technology, no major modifications to the dry mill D3MAX high protein animal feed product is suitable for ruminant and monogastric animals

6 D3MAX Project Update Completed FEL 2 design of a commercial D3MAX plant in January 2017 Completed fabrication of the D3MAX pilot system in February 2017 On Feb 16, 2017, D3MAX announced that its skid-mounted pilot system would be installed at Ace Ethanol in Stanley, WI The pilot system was delivered to Ace Ethanol on Feb 28; Ace connected utilities and conducted shakedown tests through March 10; the first pilot-scale pretreatment test was conducted on March 14 Ace Ethanol, Stanley, WI

7 D3MAX Pilot System Design Yeast Wet Cake Fermenter Water 300 gal Acid Vent Condenser Flash Steam Feed Tank Flash Tank 800 gal. Pretreatment Reactor 120 gal Feed Pump Steam 50 25% solids (12.5 dry ton/day) Diaphragm Pump to waste Fermenter Pump Ammonia Enzymes Beer Enzymatic Hydrolysis Tank 600 gal transfer hydrolysate to fermenter Hydrolysis and fermentation are batch

8 D3MAX Pilot System

9 D3MAX Pilot System

10 Flash Tank, Fermenter and Feed Tank

11

12

13

14

15

16 Pilot Test Results Achieved >90% xylose yield in our very first pretreatment test; we routinely achieve >95% xylose and arabinose sugar yields in pretreatment (monomers and oligomers) Routinely pretreat 25% solids No dilution required for enzymatic hydrolysis and fermentation Met our goals for monomeric sugar yields after enzymatic hydrolysis Beer produced is easily separated into cake and thin stillage Need to establish optimum pretreatment versus cost of enzymes Need to improve fermentation

17 Commercialization Schedule Pilot testing began March 2017 Pilot testing will be followed by FEL 3 design and integration with the first host ethanol plant Construction of the first D3MAX plant is expected to Nov 2017 with commercial operation by Dec 2018 D3MAX Schedule Activity Start Finish Pilot Testing Mar-17 Jul-17 FEL 3 Design Jul-17 Sep-17 Financing Sep-17 Oct-17 Construction Nov-17 Oct-18 Startup Nov-18 Dec-18 Commercial Operation Dec-18

18 Projected Yield Improvements Jun-17 Sep-17 Dec-17 Pilot Ethanol Yield, gal/dry ton Increase in Ethanol Production 6.7% 7.4% 8.1% Impact on Profitability: IRR - 50 MGY Dry Mill 61% 67% 72% IRR MGY Dry Mill 91% 98% 105% Net Earnings Increase - 50 MGY $0.15 $0.16 $0.18 Net Earnings Increase MGY $0.17 $0.18 $0.20

19 Proforma Financials - Assumptions 50 MGY Ethanol Plant 120 MGY Ethanol Plant Assumptions for D3MAX Plant Cellulosic Ethanol Production (gal/year) 4,039,286 9,694,286 Capex and Financing EPC Cost $21,258,650 $35,937,212 Owner s Costs $4,055,000 $8,598,000 Total Capital Cost $25,313,650 $44,535,212 EPC Capital Cost per Gallon $5.26 $3.71 Percent Debt / Equity 60% / 40% 60% / 40% Key Financial Model Inputs (year 1) Cellulosic ethanol yield (gal/dry ton) Ethanol Price ($/gal) D3 RIN Value ($/gal) reduced 20% Increase in Corn Oil Recovery (lb/bu) Corn Oil Price ($/lb)

20 Proforma Financials Proforma Income Statement for Year 2 *** D3MAX Plant Only *** 50 MGY Ethanol Plant 120 MGY Ethanol Plant Revenue $/Year $/Year Cellulosic Ethanol $6,543,643 $15,704,743 D3 RIN Income $6,691,137 $16,058,728 Increased Corn Oil Revenue $2,678,571 $6,428,571 Total Revenue $15,913,351 $38,192,043 Production & Operating Expenses Chemicals, Enzymes & Yeast $1,938,857 $4,653,257 Natural Gas $741,613 $1,779,871 Electricity $247,204 $593,290 Denaturant $128,307 $307,936 Production Labor & Benefits $419,985 $419,985 Total Production Costs $3,475,966 $7,754,339 Gross Profit $12,437,385 $30,437,703

21 Proforma Financials Proforma Income Statement for Year 2 50 MGY 120 MGY *** D3MAX Plant Only *** Ethanol Plant Ethanol Plant Gross Profit $12,437,385 $30,437,703 Administrative & Operating Expenses $548,551 $914,815 EBITDA $11,888,834 $29,522,889 Less: Interest - Senior Debt $1,025,932 $1,804,959 Depreciation & Amortization $1,384,058 $2,351,844 Net Earnings Before Income Taxes $9,478,844 $25,366,086 Net Earnings per cellulosic gallon $2.35 $2.62 Net Earnings for all gallons $0.18 $0.20 Internal Rate of Return (IRR) 72% 105% Payback, years

22 Wrap Up - Benefits of D3MAX Ethanol +10% Corn Oil +0.5 lb/bu DDGS Protein 30% 40% DDGS Volume -20% Dryer Energy -20% Corn Grind +20% Maximize D3 RINs Increase Net Income 18 to 20 /gal

23 Ace Ethanol President and GM, Neal Kemmet: We see this type of bolt-on technology as a clear path forward for cellulosic ethanol, says Neal Kemmet, president and general manager at ACE Ethanol, LLC. Of course, much will be determined during the next phase of pilot testing. However, if successful, we feel the D3MAX process will be key in allowing current producers to lead the way for the next generation of ethanol production.

24 D3MAX Maximize profits Maximize D3 RINs Maximize corn grind Maximize ethanol yield Maximize corn oil recovery Maximize corn fiber to ethanol DISTILLERS MAX