Hooba,I don’t know if this thread is really the place to go to...

Hooba,

I don’t know if this thread is really the place to go to details on JAT but you did ask the question here.
BTW Note that my sentiment and disclosure selected refers to MBT not to JAT

Biofuels had been on my radar for some time and JAT initially caught my eye when I noticed on BLG’s info' that Michael Taverner was also a director of JAT.
So I have had a look at Jat Oil some time ago and have just taken another peek on your prompting, so here is my take on the business for what it’s worth:

The company aims to be essentially equivalent to the upstream feeder segment of Mission New Energy’s business, but smaller in scale.
If the business develops as planned then the revenues will be similar to MBT, ie, The seed cake should eventually cover most of the operating costs and the oil should be the gross profits.
Sounds good at first glance.

However compared to MBT, they are several years behind in setting up the farming and commercial infrastructure and getting the actual plants in the ground.
No real plantations yet in Vietnam or in the Philippines, only prospects and identified acerages.

JAT’s presentation relies heavily on promoting biofuels generally and specifically Jathropa’s future in that industry. There’s not much argument here about the prospects of that.
The presentation over estimates the yield from a mature Jathropa crop as well as being overly optimistic with regard to how soon the plantation matures enough to produce that yield, so their figures need to be taken with a grain of salt.
To be fair, so also did MBT’s presentation, but MBT has extra strings to it’s bow, that keeps the investment looking good.

An investment in JAT does initially look fairly secure with a quick ratio of 44 and cash in hand of approx $7.5M with a current burn rate of $2.5M PA .
But the burn rate is low because they haven’t yet really started to actually plant or do much, so I would expect that to increase significantly as the business actually starts to operate

Their presentation clearly states that around $25M will be needed to set up the commercial operation, so lots of capital will be needed soon.
Even with joint ventures and partnerships, their share price would make any future capital raising of those large amounts, extremely difficult.
If they succeed in raising the money, based on their own data, at current oil prices of around $78 per barrel and 12 month forecast of around $90 per barrel, JAT’s payback period on investment will be around 7 years.
They will also be cashflow negative for at least the next five years, even if everything goes to plan. The truth is though that in the history of Jathropa cultivation the opposite happens, not much goes to plan.
The plus however for JAT’s late entry is that they needn’t repeat the mistakes of the earlier ventures into this field.

A long wait though to see any profits!

Vietnam is also an unknown to me with regard to the legal, commercial, political and industrial climate, so that presents me with a lot of uncertainty with regard to actually establishing the farmer contracts as well as the cultivation and harvesting infrastructure

Look hooba, I guess I could look at more detail on JAT, but to be honest, not much leaps out at me to make this seem like an attractive investment at this stage.
That’s not to say the company doesn’t have a future, but from my perspective, it’s too early in it’s development path to be certain of that future. That’s obviously why the share price is down from 15c at IPO to the current 3c.
But if you can see the way ahead there’s clearly a lot of upside in the price.

I would personally wait a couple of years to see actual farmer contracts in place, plants in the ground, acres and dates quantified before I would make any commitment here.
To me, MBT seems a far better bet.

Cheers