GTL Resources is to go ahead with the doubling of capacity at its Rochelle, Illinois, ethanol facility through the placing of £13 million worth of new shares at £1 a time and the raising of around £85 million of debt. The news has done nothing for the shares, which languish at 136p compared with the 263p at which I tipped them here a year ago. But there is certainly plenty of encouraging news from the existing plant, which is currently producing at an annual rate of more than 55 million gallons of ethanol – well above nameplate capacity. The permit for the plant is 60 million gallons, and GTL is clearly close to achieving that.

The market has been downbeat about GTL’s ability to make money because corn prices – the feedstock for its plant – have soared. But so too has the price of ethanol, which has been dragged up by a rising oil price. Good margins are being achieved on feedstock costs well below current spot prices and sales that are now overwhelmingly being made into the local Chicago market (saving on freight costs). In the first two months of the current year, unaudited figures show a $5.4 million (£2.7 million) top-line profit before interest costs, tax and depreciation. Continue to hold.

GTL Resources	AIM	£5.44m	17.00p	0.00p
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Other company articles:
GTL into the black			03/07/2008
GTL turns a profit			16/11/2007
Maiden profit from GTL			13/11/2007
GTL Resources doubles up at Rochelle			06/07/2007
GTL seeks £13m			02/07/2007