Golden Triangle Energy

Volume 1, Issue 2

Second Quarter 2011

Golden Triangle Energy, LLC

From the Chairman…

2011 has certainly been a challenging year at Golden Triangle Energy LLC. Our business plan to market a diversi-ty of products to high quality customers was very much on target for the first 6 months of this year even with ex-traordinary price volatility, especially the cost of corn to keep the plant at full production capacity. As you are well aware, the value of corn has increased over 40% from year ago levels and while this is most encouraging for corn producers, it has a dramatic impact on our processing margins. While we have Business Interruption Insurance, the total financial impact from the flood of 2011 has yet to be determined. Our management and operations staff have certainly done everything possible to mitigate the damage to our facility and our customer relationships. Roger Hill had experienced the 1993 flood in Hamburg Iowa and had a refined plan to disassemble the critical components of our facility when flooding conditions became eminent . We certainly want to commend all our staff for their extraordinary dedication during this extremely stressful time. Many of our area producer stockhold-ers as well as many of our staff experienced extensive loss of property and extreme emotional distress as the flood issues of 2011 continue to persist. Plant Operations Manager, Charlie Martin, has a brief summary of the sum-mer's events later in this newsletter.

Looking ahead:

Our annual meeting is scheduled to be held December 8, 2011. More specific details will follow in the months to come.

We have two directors up for re-election at the annual meeting, Randy Luke and Steve Volker. These positions are for a 3 year term and you are welcome to nominate additional candidates for the two elected director positions. Additional nominees for candidates may be made by any stockholder entitled to vote generally in the election of directors. All nominations must be received by the Company no later than November 8, 2011 and should include the following: (i) the name and address of the stockholder who intends to make the nomination; (ii) the name, age, address, and principal occupation of each stockholder being nominated; (iii) a short biography of the stockholder being nominated. Once all nominations have been received, a proxy containing a list of all candi-dates will be mailed out in November to all stockholders entitled to vote. Stockholders will be able to vote their units for any two of the director nominees listed on the proxy. The units will be voted as a "whole" and cannot be split up (if you hold 1,500 units then you may vote the full 1,500 units for 1 nominee and the full 1,500 units for another nominee). For those who prefer to attend the annual meeting and vote in person, ballots will be provided at the meeting.

 

If you are interested in transferring your stock units please visit the GTE website at www.goldentriangleenergy.com and click on the "Unit Transfer Directions" (see the webpage image above). This link gives directions and has ac-cess to the forms that can be used for the transfer process.

 

If you have any questions regarding any of the information above, please contact Sheri Sharp at 660-683-5646 x20.

Best regards,

Gene Millard , Chairman

Golden Triangle Energy, LLC

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Page 2

As you know, most of our high quality product is contracted 3 to 6 months at a time. We called on fellow ethanol pro-ducers to help out with some of our contractual obligations. Nebraska Corn Producers (NCP) helped in a huge way to fill our 500,000 gallon fuel exports to Rotterdam. ADM helped us with our Dow Chemical contracts and MGPI at Atchison, KS helped with some exports to Mexico. Fortunately, our beverage customers had enough inventory to get by.

 

It has been a challenging summer with displaced employees, including myself. We lost 2 of our operators from Falls City, NE due to the long commute.

Thankfully, we have been in good enough financial condition to weather the storm. We have a lot of ground to make up, but if we can maneuver through this crazy corn market, we will be alright. Our banker understands the situation and is willing to continue to work with us because we have a strong balance sheet.

 

Roger Hill , General Manager

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In late Spring, the Corps of Engineers’ publicized some alarming water inundation predictions for our area, in part, due to excessive amounts of snowfall up north. On June 6th, BNSF made their last exchange of rail cars at GTE…..all cars were removed and we were given notice that railroad service was suspended at Craig until flood waters receded and tracks repaired. GTE continued operations, receiving corn and shipping alcohol and feed inventory with "truck only" operations. In order to fulfill alcohol contracts that we had previously been shipping by railcar, GTE began trucking alcohol to Kansas City and transloading product to rail cars (4 trucks per railcar).

 

Record high river levels and levee failure after levee failure pushed flood waters to the city limits of Craig. News indi-cated the Gavin’s Point dam could further increase releases. Several issues led us to believe a controlled shutdown would be GTE’s least painful option to preserve capital and minimize expenses. At risk was highway access, our elec-tricity supply, city water, sewer to operate, and a need for time to move computer network systems, plant electrical control systems, motors, and corn inventory. We shutdown on June 21st in a manner to best preserve the plant for an extended down time and minimize damage should water get on site. The equipment listed above was disconnected, moved and the corn bins were sealed.

A temporary office site was rented in Mound City and the necessary office equipment was set up to handle ongoing business. A couple of the rooms at this site were designated as sleeping quarters for a few of our Nebraska employees who had and still have a very long commute to work. Also at this time, we began looking for alternative sources of al-cohol to protect our customer accounts and to manage our contracts with them the best that we could.

 

On Monday, July 11th we began putting the plant back together and after much dedicated effort by our employees in unbelievable heat, we began receiving corn on July 25th. Mechanical issues have plagued us since the restart, but we managed to be at full production by August 9th. Lack of rail service at Craig is still an added expense, but we will continue to trans load at Leeds in Kansas City and are just beginning to trans load at Gage’s in St. Joseph. We view this as a must to preserve our nationwide customer base and market our production capacity. Indications are that rail service should be fully restored in October.

 

Please send your e-mail address to me if you wish to be included in distribution of more detailed updates and market information routinely passed to stockholders.

 

Charlie Martin, Plant Manager

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