Gevo announces key business updates, initiatives for 2021

Gevo announced key business updates and initiatives for 2021. Gevo recently announced the concept of Net Zero Projects to produce energy-dense liquid hydrocarbons using renewable energy and Gevo's proprietary technology. Gevo is currently developing its Net-Zero 1 Project at Lake Preston, South Dakota. On January 22, 2021, Gevo closed a registered direct offering priced at-the-market under Nasdaq rules of an aggregate of 43,750,000 shares of common stock at a purchase price of $8.00 per share. Gevo received net proceeds of approximately $321.7 million. Gevo now has approximately $535 million dollars of cash and no significant debt. Gevo expects that Net-Zero 1 would have the capability to produce approximately 45MGPY of liquid hydrocarbons that when burned should have a "net-zero" greenhouse gas footprint as measured across the whole of the lifecycle based on Argonne National Laboratory's GREET model. In addition, Net-Zero 1 is expected to produce at least 350,000,000 lbs/yr of high protein animal feed. To reduce and eliminate the fossil resources used in the plant, it is expected to have an anaerobic digestion wastewater treatment plant that is capable of generating enough biogas to run the plant and supply a combined heat and power unit, capable of meeting approximately 30% of the plant's electricity needs. The remaining 70% of electricity to run the plant is expected to come from wind power. Net-Zero 1 may also obtain renewable natural gas using manure from dairy or beef cows. Preliminary capital estimates for Net-Zero 1 are $700-$800M Gevo is in the process of completing front-end engineering and project planning to determine capital costs for Net-Zero 1 with more precision. As of January 22, 2021, Gevo had approximately $535 million of cash and virtually no debt. Gevo intends to use its cash to fund capital projects, working capital and for general corporate purposes. Gevo now has enough cash to fund 100% of the equity investment that is expected for Net-Zero 1. Gevo may bring in appropriate strategic or financial partners as equity investors if it is in Gevo's interests to do so. Gevo expects to establish Net-Zero 1 in a special purpose entity. The full financing of Net-Zero 1 can only be completed after the front-end engineering phase is completed. As of January 22, 2021, Gevo had approximately 198 million shares of common stock issued and outstanding. Gevo has approximately 48MGPY of contracts signed for a mix of jet fuel and renewable gasoline products, representing approximately $1.5 billion of revenue across the life of the contracts. If Gevo secures additional take-or-pay contracts, Gevo would have to acquire and develop additional Net-Zero production sites. Gevo has optioned the right to purchase approximately 240 acres of land near Lake Preston, SD. This site is attractive because of its abundant sustainable corn supply, high protein feed demand, rail transportation, and renewable energy potential. Gevo is planning to close and begin construction of its first RNG project in 2021. The NW Iowa Project will produce RNG by using anaerobic digesters to convert manure from dairy cows into RNG. RNG production is expected to begin in 2022. Citigroup is arranging the debt financing. Gevo plans to sell most of the gas to the RNG market in California and use some of the biogas generated from this project at its renewable hydrocarbons plant, for example, at Lake Preston, Luverne, and/or another site. Gevo hired Citigroup to assist the financing of the Net-Zero production facilities and the RNG project. The Net-Zero 1 financing process is dependent on completing the front-end engineering work, expected to be completed in December 2021. Gevo expects financing for Net-Zero 1 to close in the first half of 2022. Key Initiatives for 2021: Complete front-end engineering work for Net-Zero 1 by year end of 2021. Gevo anticipates signing take-or-pay contracts with additional customers in 2021. Additional contracts are expected to support additional Net-Zero projects. Secure additional plant sites for Net-Zero 2 and/or 3 to accommodate additional offtake agreements that Gevo may sign this year. Close financing for Gevo's NW Iowa Project and commence construction. Secure investment agreements with strategic and financial project investors for Net-Zero projects if terms are attractive.