News Release

llinois River Energy LLC ("IRE" or the "Company")
Acceptance Tests Complete and First Revenue Announced

Illinois River Energy is pleased to announce that its ethanol plant at Rochelle, Illinois, which commenced production on 27 December, has completed its acceptance tests on 16th January and has received its first revenues.

The acceptance tests, which check that the plant is capable of meeting production expectations, were completed over the period 10th to 16th January, during which time the plant on average exceeded the:

·     Nameplate capacity of 50 million gallons per annum
·     Guaranteed ethanol yield equivalent to 2.8 denatured gallons per bushel of corn
·     Guaranteed electricity and gas usages per gallon of ethanol

The plant is now being operated by our staff following handover by the technology providers ICM and the contractor Fagen Inc.

All production since 27th December has met quality specifications and ethanol shipments to both the local Chicago market by truck and the New York market by rail are proceeding to plan. Dried Distillers Grains shipments to the rapidly expanding Far Eastern market have also commenced with attractive margins being achieved as a result of the plant’s proximity to Chicago container terminals.

The landmark receipt of the Company’s first $ 1 million of revenue was achieved on 12th January.  The plant is operating profitably and its continued ability to do so will be assisted by risk management activities.  These include the use of financial derivatives by means of which the company has limited its corn price exposure on 95% of its nameplate corn usage for calendar 2007.  At a hypothetical $4/bushel corn for 2007 the benefits of these hedging activities would exceed 50cents/bushel with a limited exposure to higher prices outweighed by a greater downside participation potential.

Vince McCabe, IRE’s General Manager, said
 
“We are very excited about the completion of our first ethanol plant, and are particularly pleased that it was achieved on schedule and to budget. Despite current oil and corn volatility, production remains profitable. The outlook remains strong for well managed and well located plants such as ours at Rochelle.”

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