AMU announced this morning that the Federal Government has approved a $7.15 million grant for AMUs biodiesel project. Now that has to be a resounding tick of approval that their business model is a goer.
When I spoke to the agency assessing the projects and responsible for putting up the recommendations to Government, I was told one criterion for approval was that the project would stand on its own in the long term. In other words, that the project was commercial without any assistance from government. The fact that AMU was given a grant tells us that their business model for biodiesel will stand up in the long term.
And given that the other four or five plants they have planned are based on the same model, that bodes very well for the future.
With each plant likely to deliver very substantial profits to AMU - of the order of $5+ million per annum - this is cause for celebration among AMU shareholders. Of course the $7.15 million is not to be sneezed at either!!
Well done AMU/ARF. Roll on construction and that future earnings stream.
AMU Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
