Great Plains Metals Corp. press release
Pristine Power announces second quarter 2008 results and updates construction and development activities
TSXV - TSX Venture Exchange · Gold · Copper · Molybdenum · Rare Earth Elements · Uranium · Canada
CALGARY, Aug. 12 /CNW/ - Pristine Power Inc. ("Pristine" or the "Company") today announced its financial results for the quarter ending June 30, 2008 and provided updates to its construction activities at the East Windsor Cogeneration Centre and Enpower projects as well as its development initiatives in British Columbia and Ontario. Pristine has filed with Canadian securities regulatory authorities its unaudited financial statements and related Management's Discussion and Analysis for the three and six months ended June 30, 2008. These filings are available for review on the Corporation's SEDAR profile at www.sedar.com and on Pristine's website at www.pristinepower.ca.
"In the second quarter of 2008 the Company made significant progress with its three major projects under construction and in the development of new projects," noted Mr. Jeffry M. Myers, President and Chief Executive Officer. "Construction of Enpower's project at Savona was completed and is expected to be operational in the third quarter. Completion and commercial operations of Enpower's other project at 150 Mile House is also expected in the next quarter. Progress on the East Windsor Cogeneration Centre project remains on track and on budget with commercial operation expected in the third quarter of 2009. The Company also actively pursued additional growth submitting three proposals totaling 40MW under BC Hydro's Bioenergy Call for Power. In addition the Company continues to develop a project for submission into the Ontario Power Authority's Request for Proposals for approximately 350 MW of Peaking Generation in the Northern York Region, with the bid submission expected to be in the fourth quarter of 2008."
Financial and Operating Highlights
For the three month For the six month period ended period ended ($000s) June 30, June 30, June 30, June 30, 2008 2007 2008 2007 Revenue 516 206 695 463 Expenses 2,517 1,126 4,247 1,884 Net income (loss) (1,936) (221) (3,784) (722) Net income (loss) per share Basic and diluted (0.06) (0.02) (0.16) (0.07) Total assets 179,135 17,200 179,135 17,200 Long term debt 88,413 - 88,413 - Shareholders' equity 60,932 5,537 60,932 5,537 Funds used in operations(1) (1,553) (899) (2,949) (1,374) Funds used in operations per share Basic and diluted(1) (0.06) (0.09) (0.12) (0.13) (1) Non-GAAP measure
In the three months ended June 30, 2008, Pristine incurred a net loss of $1.9 million ($0.06 per share basic and fully diluted) compared to a loss of $0.2 million ($0.02 per share basic and fully diluted) in the same period of 2007. Year-to-date, the Company reported a net loss of $3.8 million ($0.16 per share basic and fully diluted) compared to a loss of $0.7 million ($0.07 per share basic and fully diluted) in the first six months of 2007. Increased development, stock based compensation and general administrative costs, partially offset by realized foreign exchange gains, accounted for the increased loss in both the second quarter and year-to-date 2008 results compared to the same periods in 2007. Development activities increased in 2008 as the Company submitted three proposals totaling 40 MW in June 2008 under BC Hydro's Bioenergy Call for Power and continues to develop a project for submission into the Ontario Power Authority's Request for Proposals for approximately 350 MW in the Northern York Region. Higher general and administrative costs reflect increased salaries and wages due to an increased staff complement to support the Company's development and construction initiatives and upcoming operations. Funds used in operations during the second quarter of 2008 were $1.6 million ($0.06 per share basic and fully diluted) compared to $0.9 million ($0.09 per share basic and fully diluted) in the second quarter of 2007. Year-to-date funds used in operations were $2.9 million ($0.12 per share basic and fully diluted) compared to $1.4 million ($0.13 per share basic and fully diluted) during the first six months of 2007. Increased use of funds during the quarter and year-to-date 2008 compared to 2007 reflect the aforementioned higher development and general and administrative costs.
On April 18, 2008, the Company's agents exercised their over-allotment option and an additional 1,250,000 common shares were issued for net proceeds of $4.6 million.
Projects under Construction
Construction of the Company's projects remained on track and on budget in the second quarter of 2008.
East Windsor Cogeneration Centre
Construction of the 84 MW East Windsor Cogeneration Centre continued in the second quarter of 2008 on schedule and on budget. During the second quarter, the once-through steam generators were received at site and installation is now substantially complete. As at August 12, 2008, the GE LM6000 gas turbine generator sets have been delivered to site and installation has commenced. Foundation work and construction of the switchyard and interconnect is ongoing. The project remains on track for commencement of commercial operations in the third quarter of 2009. At June 30, 2008, $133.4 million of the total expected project costs of $207 million had been incurred with $37.0 million incurred in the second quarter of 2008. Pristine holds a 25% effective working interest in the project.
EnPower Projects
At the 5 MW Savona and 5 MW 150 Mile House Enpower ERG(R) waste heat recovery generation projects, construction also continued in the second quarter of 2008. Construction of the Savona project was completed in July 2008 and commissioning commenced in August with the first MW generated on August 2, 2008. On August 11, 2008, the Savona project successfully completed its 72 hour performance test and commencement of commercial operations is expected by August 31, 2008. At the 150 Mile House site, assembly of all major components is nearly complete and commissioning is expected to begin in September, 2008. The total construction cost of the Enpower projects is on budget and expected to be approximately $31.5 million. At June 30, 2008, $24.9 million of the total expected costs had been incurred with $10.2 million incurred in the second quarter of 2008. Pristine holds a 50% working interest in the projects, which will be reduced to 25% upon completion of the related project financing, expected to be finalized in the third quarter of 2008.
Projects under Contract
Mackenzie Green Energy Centre
Development of the proposed 65 MW (thermal equivalent) biomass fired Mackenzie Green Energy Centre, in which the Company holds a 35% working interest, continued in the second quarter of 2008. In May 2008, the Mackenzie pulp mill, the proposed steam host and fibre supplier for the project, suspended operations and the sale of the mill is currently subject to a court approved auction. Accordingly, negotiations with BC Hydro continued during the second quarter to amend the existing Electricity Purchase Agreement to address the impact of changes in the region's overall fibre supply environment on the project. The Company is also continuing to examine other potential sites available in the immediate vicinity of the Mackenzie pulp mill and is seeking to secure other cost effective sources of fibre.
Development Activities
On June 10, 2008, Pristine submitted three proposals totaling 40 MW under the BC Bioenergy Call for Power by BC Hydro. The Ditni Yoh Green Energy project is a 20 MW proposed project to be located in Burns Lake, British Columbia, developed in association with the Burns Lake Band. The Anahim Green Energy project is a 10MW proposed project developed in association with the Ulkatcho First Nation to be located near Anahim Lake, British Columbia, while the Cheslatta Green Energy project is 10 MW proposed project developed in association with the Cheslatta Carrier First Nation to be located near Cheslatta, British Columbia. If awarded by BC Hydro, the projects will employ gasification or traditional boiler technology, utilizing a combination of sawmill wood residue, road side slash residue and standing pine beetle kill. Total cost of the projects as bid, including related significant transmission upgrades, is approximately $240 million with projected in service dates of between 2010 and 2011. Awards are expected to be announced by BC Hydro in October 2008.
On June 11, 2008, the Ontario Power Authority released its draft Request for Proposals for approximately 350 MW of Peaking Generation in Northern York Region ("Northern York RFP"). Under the Northern York RFP, proposals must be submitted by October 30, 2008 with awards expected to be announced in December 2008. An affiliate of Pristine is one of 5 pre-qualified proponents and is actively developing a project to submit under the Northern York RFP.
On June 11, 2008, BC Hydro issued the Clean Call Request for Proposals ("Clean Call RFP") with an acquisition target of 5,000 GWh per year. Under the terms of the Clean Call RFP, projects with an extended in-service date of up to 2016 will be considered. Pristine is actively developing projects to submit into the Clean Call RFP.
On July 10, 2008, Pristine, through a 50% owned affiliate, acquired a site in the town of Milton, Ontario for approximately $9 million ($4.5 million net to Pristine) in support of development of a future power project. The site is strategically located adjacent to transmission lines and the related environmental assessment has been completed for a large scale gas-fired power generation facility.
Conference Call
Pristine will hold a conference call on Wednesday, August 13, 2008 at 10:00 am MT (12:00 pm ET) to discuss its second quarter 2008 results and provide an update on operations, construction and development activities. The call can be accessed at 1-800-796-7558 or 1-416-644-3428. A replay of the call will be available until August 27, 2008 at 1-877-289-8525 or 1-416-640-1917. The access code for the replay is 21280174 followed by the pound sign.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this news release may constitute "forward-looking information" or "forward-looking statements" which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. When used in this news release, such information uses such words as "estimates", "expects", "plans", "anticipates" and other similar terminology. This information reflects the Company's current expectations regarding future events and operating performance and speaks only as of the date of this news release. Forward-looking information involves significant uncertainties, should not be read as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information. Although the forward-looking information in this news release is based upon what management of the Company believes are reasonable assumptions, the Company cannot assure investors that actual results will be consistent with this forward-looking information. This forward-looking information is provided as of the date of this news release, and, subject to applicable securities laws, the Company assumes no obligation to update or revise such information to reflect new events or circumstances.
About Pristine
Pristine was founded in 2002, and is in the business of developing, owning and operating independent power plants that will produce and sell electricity and in some cases, sell process steam to industrial users. Pristine capitalizes on opportunities in the independent power market by actively pursuing the development of dependable, cost-effective and environmentally responsible power generation facilities utilizing technology with proven past performance. Pristine pursues a mix of large gas-fired electricity generation and hydroelectric projects and small replicable waste heat recovery ERG(R) and bioenergy gasification electricity generation projects. Pristine currently has three projects under construction, and is actively developing projects in Ontario, British Columbia and Alberta.
PRISTINE POWER INC. CONSOLIDATED BALANCE SHEETS (Unaudited)
June 30, December 31, 2008 2007
ASSETS
Current assets
Cash and cash equivalents $ 37,386,258 $ 1,567,275 Accounts receivable 2,079,297 2,030,638 Prepaid expenses and deposits 931,379 624,593 Due from related parties - 392,116 Derivative financial instruments asset 269,660 49,111 40,666,594 4,663,733
Restricted cash 53,849,786 75,235,475 Investments 2,317,352 2,282,452 Property, plant and equipment 82,301,030 41,415,392 $179,134,762 $123,597,052
LIABILITIES Current liabilities Accounts payable and accrued liabilities $ 11,470,788 $ 8,344,109 Due to related parties 4,471,416 - 15,942,204 8,344,109
Asset retirement obligation 310,786 211,049 Long-term debt 88,412,593 88,443,876 88,723,379 88,654,925
Non-controlling interest 13,536,722 13,309,051
SHAREHOLDERS' EQUITY Share capital 67,323,967 16,947,656 Contributed surplus 1,510,653 463,551 Deficit (7,902,163) (4,122,240) 60,932,457 13,288,967 $179,134,762 $123,597,052 Commitments and guarantees
PRISTINE POWER INC. CONSOLIDATED STATEMENTS OF LOSS, COMPREHENSIVE LOSS AND DEFICIT (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007
REVENUES Consulting fees $ 210,363 $ 163,223 $ 314,951 $ 391,159 Interest and other income 305,673 43,102 379,872 72,290 516,036 206,325 694,823 463,449 EXPENSES
General and administrative 1,202,713 889,247 2,092,992 1,529,971 Project development costs 948,017 125,122 1,477,184 213,578 Stock based compensation 194,213 10,931 1,047,102 27,886 Interest and finance charges 1,637 87,882 13,115 87,882 Unrealized (gain) loss on derivative financial instruments 148,775 - (220,549) - Unrealized foreign exchange (gain) loss 59,918 - (274,776) - Realized foreign exchange (gain) loss (83,061) - 53,390 - Depreciation, amortization and accretion 45,136 12,553 58,616 24,513 2,517,348 1,125,735 4,247,074 1,883,830
NET LOSS BEFORE THE UNDERNOTED (2,001,312) (919,410) (3,552,251) (1,420,381)
OTHER ITEMS
Partnership loss - - - (1,030) Loss from equity accounted for investments - (1,508) - (480) Gain on disposal of investments - 700,000 - 700,000 698,492 - 698,490
NET LOSS BEFORE NON-CONTROLLING INTEREST (2,001,312) (220,918) (3,552,251) (721,891)
NON-CONTROLLING INTEREST (65,424) - 231,255 -
NET LOSS AND COMPREHENSIVE LOSS (1,935,888) (220,918) (3,783,506) (721,891)
DEFICIT, BEGINNING OF PERIOD (5,966,275) (5,896,873) (4,122,240) (5,395,900)
ADOPTION OF FINANCIAL INSTRUMENTS - - 3,583 - DEFICIT, END OF PERIOD $(7,902,163) $(6,117,791) $(7,902,163) $(6,117,791) BASIC AND DILUTED NET LOSS PER SHARE $ (0.06) $ (0.02) $ (0.16) $ (0.07)
PRISTINE POWER INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007 OPERATING Net loss $(1,935,888) $ (220,918) $(3,783,506) $ (721,891) Add (deduct) non-cash items: Unrealized loss (gain) of derivative financial instrument 148,775 - (220,549) - Unrealized foreign exchange Loss (gain) 59,918 - (274,776) - Amortization of deferred leasehold Inducements - (2,775) (3,293) (5,550) Stock based compensation 194,213 10,931 1,047,102 27,886 Non-controlling interest (65,424) - 227,671 - Gain on disposition of investment - (700,000) - (700,000) Loss in equity accounted investments - 1,508 - 480 Partnership loss - - - 1,030 Depreciation, amortization and accretion 45,136 12,553 58,616 24,513 (1,553,270) (898,701) (2,948,735) (1,373,532)
Change in non-cash operating working capital (302,343) 1,274,902 (293,578) (530,452) Cash (used in) provided by operating activities (1,855,613) 376,201 (3,242,313) (1,903,984)
FINANCING Net proceeds from issuance of shares (net of share issue costs) 4,552,300 - 50,376,311 - Advance from partners 5,810,206 - 4,863,532 - Repayment of shareholder loans - (536) - (536) Issuance of promissory note - 7,000,000 - 7,000,000 Net proceeds from issuance of special warrants - 296,014 - 296,014 Change in non-cash working capital (464,818) (7,500) (14,760) 13,986 Cash provided by financing activities 9,897,688 7,287,978 55,225,083 7,309,464
INVESTING Acquisition of property, plant, and equipment (24,128,423) (7,734,431) (40,872,217) (9,125,299) Release of restricted cash 11,101,550 - 21,518,799 - Proceeds from disposal of investments - 700,000 - 700,000 Investments (34,900) (30,483) (34,900) (30,483) Advance from related parties - (426,808) - (434,564) Change in non-cash working capital (1,207,294) 2,561,340 3,097,850 4,156,867 Cash used in investing activities (14,269,067) (4,930,382) (16,290,468) (4,733,479) Unrealized foreign exchange (gain) loss (1,614) - 126,681 - Increase (decrease) in cash and cash equivalents (6,228,606) 2,733,797 35,818,983 672,001
Cash and cash equivalents, beginning of period 43,614,864 1,916,631 1,567,275 3,978,427 Cash and cash equivalents, end of period $37,386,258 $ 4,650,428 $37,386,258 $ 4,650,428