Hot Rock shares (ASX code HRL) soared 40 per cent in a week on the news that it has drafted a joint venture deal to sell 70pc of its projects in Chile and Peru to the world’s largest integrated geothermal operator, the Philippines-based Energy Development Corporation (EDC).

If it goes ahead, EDC will pay most of the development costs and HRL will get $US4 million cash.

Less happily, the Punter’s options to buy shares in the biodiesel manufacturer Australian Renewable Fuels (ARW) reached their use-by date last Friday.

At first sight it was tempting to exercise the options and buy 60,000 shares at a cent each at a time when they were selling on the open market for 1.5c.

The company issued the first of what it hopes will be quarterly newsletters, putting a positive spin on things on the eve of the option expiry date.

Reading cynically between the lines, however, the Punter suspects that feedstock costs are still high, there are still technical problems in switching to the proposed cheaper alternative (recycled mill oil from the palm oil industry) and the company is going to need more money soon.

None of the plants are operating at full capacity and it is likely to be at least six months or a year before they are.

ARW notes that its relatively small export sales are profitable, but there is nothing to say domestic sales are making money.

Negative cash flow in the three months to the end of September was $2.5m, leaving only $2.5m in the bank.

On a positive note, ARW has succeeded in taking over Biodiesel Producers Ltd becoming Australia’s largest producer with a potential capacity of 150m litres a year.

The government earlier this year slapped an anti-dumping levy on imports of US biodiesel.

Demand for biodiesel remains firm, and when ARW succeeds in adapting its plants to use palm mill oil it will have a plentiful supply of cheaper raw material.

Nevertheless, the Punter, with a deep sigh, declined to exercise the options and sold them on the market at a hefty loss.

The Punter has no financial qualifications and no links to the financial services industry. He owns shares in a number of companies featured in this column.