Great Plains Metals Corp. press release
Pristine Power announces third quarter 2008 results and updates operations, construction and development activities
TSXV - TSX Venture Exchange · Gold · Copper · Molybdenum · Rare Earth Elements · Uranium · Canada
CALGARY, Nov. 5 /CNW/ - Pristine Power Inc. ("Pristine" or the "Company") today announced its financial results for the quarter ending September 30, 2008 and provided updates to its operations, construction activities and development initiatives. Pristine has filed with Canadian securities regulatory authorities its unaudited financial statements and related Management's Discussion and Analysis for the three and nine months ended September 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.
"The Company has achieved several notable accomplishments during the quarter," commented Mr. Jeffry M. Myers, President and Chief Executive Officer. "During the third quarter, the Company began to operate its first power plant, the 5 MW waste heat recovery plant at Savona. In October, the second 5 MW plant at 150 Mile House commenced commercial operations. The commercialization of the first two projects is a significant milestone for Pristine and will begin to generate cash flows for the Company. Furthermore, these projects were on budget, and provide a base to replicate our success with waste heat recovery technology in other locations.
The Company's remaining project under construction, the East Windsor Cogeneration Centre, also continues to progress as expected, and based on the current status of the project, is expected to be on budget and to achieve commercial operation by mid 2009. The Company is pursuing an unprecedented number of new growth opportunities, including a bid to the Ontario Power Authority's Request for Proposals for approximately 350 MW of Peaking Generation in the Northern York Region, and expect to submit its qualifications to the Ontario Power Authority's Request for Qualifications for up to approximately 850 MW of Generation the Southwest Greater Toronto Area. Pristine has also submitted its qualifications to SaskPower's Requests for Qualifications for 100 MW of peaking generation and will make another submission for up to 400 MW of base load power. In addition, later this month the Company intends to submit projects for development under BC Hydro's Clean Power Call, including the up to 600 MW Klinaklini run-of-river project and up to four 5 MW EnPower ERG(R) projects.
Lastly, and perhaps most notably, despite the recent turbulent times in the financial markets, EnPower Green Energy Generation Limited Partnership, a partnership in which, prior to completion of the financing, the Company had a 50% interest, completed a ten year, $24.6 million non-recourse loan at a fixed rate of 6.65%. Concurrent with the close of the financing and under the terms of the equity contribution agreement with CFI Infrastructure Opportunities LP, the Company's interest was reduced to 25% in exchange for $3.7 million cash. As a result, funds previously invested in this project have been repaid to the partners and the Company currently has over $40 million of cash available to fund operations and future development activities."
Summary of Selected Financial Information
For the three month For the nine month period ended period ended ($000s) Sept. 30, Sept. 30, Sept. 30, Sept. 30, 2008 2007 2008 2007 Revenue 514 412 1,209 875 Expenses 2,897 1,422 7,144 3,306 Net loss and comprehensive loss 2,323 1,010 6,106 1,732 Net loss per share - basic and diluted 0.07 0.09 0.23 0.16 Total assets 171,190 28,815 171,190 28,815 Long term debt 88,401 - 88,401 - Shareholders' equity 58,676 9,546 58,676 9,546 Cash used in operations 3,463 1,885 6,705 3,789 Cash used in operations per share - basic and diluted 0.12 0.15 0.26 0.30 Funds used in operations(1) 2,159 988 5,108 2,361 Funds used in operations per share - basic and diluted(1) 0.07 0.08 0.20 0.19
(1) Non-GAAP measure
Highlights
The Company's operating results for the three month and nine month periods ended September 30, 2008 are compared below to the operating results for the three and nine month periods ended September 30, 2007.
In the three month period ended September 30, 2008 Pristine incurred a net loss of $2.3 million ($0.07 per share basic and diluted) compared to a loss of $1.0 million ($0.09 per share basic and diluted) in the same period in 2007. On a year-to-date basis, the Company incurred a net loss of $6.1 million ($0.23 per share basic and diluted) compared to a net loss of $1.7 million ($0.16 per share basic and diluted) in the first nine months of 2007. Increased development, general and administrative costs and stock based compensation accounted for the increased loss in both the third quarter and on a year-to-date basis compared to same periods in the previous year.
Development activities increased in 2008 compared to the same period in 2007, reflecting a significant and unprecedented increase in requests for proposals and requests for qualifications in British Columbia, Ontario and Saskatchewan to which Pristine is responding in the form of greenfield project submissions. General and administrative costs increased as a result of additional staff required to support the Company's development and operational initiatives, increased consulting and legal costs due to the Company's public listing requirements and higher rent expense. Stock based compensation expense increased as a result of options issued to employees and directors in the nine month period. Options issued to directors are in lieu of cash compensation for 2008.
Funds used in operations in the third quarter of 2008 were $2.2 million ($0.07 per share basic and diluted) compared to $1.0 million ($0.08 basic and diluted) in the third quarter of 2007, reflecting the aforementioned higher development and general and administrative costs. Funds used in operations represent cash used in operating activities before changes in non-cash working capital. Cash used in operations in the third quarter of 2008 was $3.5 million ($0.12 per share basic and diluted) compared to cash used in operations of $1.9 million ($0.15 per share basic and diluted) in the third quarter of 2007. On a year-to-date basis, funds used in operations were $6.7 million ($0.26 per share basic and diluted) compared to $3.8 million ($0.30 per share basic and diluted).
Operations
In August, 2008 the 5 MW waste heat recovery project at Savona commenced operations. During the quarter, the Company had a 50% interest in the Savona plant. Concurrent with completion of the ten-year, non-recourse term loan on October 23, 2008 the Company's interest was reduced to 25% under the terms of an equity contribution agreement.
The Company's share of revenue generated during the quarter following commencement of commercial operations equaled $0.07 million on generation of 821MWh and includes the impact of a ten day planned maintenance outage on Spectra's compressors. Power generated from this plant is sold to BC Hydro under a twenty-year long term contract.
Operating expenses during the quarter and on a year-to-date basis were $0.03 million.
Projects under Construction
Construction of the Company's two remaining projects remained on track and on budget in the third quarter of 2008.
East Windsor Cogeneration Centre
Construction of the 84 MW East Windsor Cogeneration Centre continued in the third quarter of 2008 on schedule and on budget. During the third quarter, installation of the once-through steam generators was completed. Installation of the GE LM6000 Gas Turbine generator sets continued as did construction of the switchyard, balance of plant and 115kv interconnect. The current outlook is to achieve commencement of commercial operations mid-year 2009. At September 30, 2008, $157.7 million of the total expected project costs of $207 million had been incurred with $24.3 million incurred in the third quarter of 2008. Pristine holds a 25% effective working interest in the project.
EnPower Projects
Construction of the 5 MW Savona waste heat recovery project was completed in July 2008 and commissioning commenced in August with the first MW generated on August 2, 2008. Upon successfully completing performance testing, commercial operations commenced later in August, 2008. At the 150 Mile House site, the project completed construction in September and commenced commercial operation in October, 2008. Total construction cost of the Enpower projects is on budget and expected to be approximately $30.2 million, before financing costs. At September 30, 2008, $29.4 million of the total expected costs had been incurred with $4.5 million incurred in the third quarter of 2008. During the third quarter, Pristine held a 50% working interest in the projects. On October 23, 2008, the Company's working interest was reduced to 25% upon completion of the ten-year term, non-recourse financing.
Projects under Contract
Mackenzie Green Energy Centre
Development of the proposed 65 MW (thermal equivalent) biomass fired Mackenzie Green Energy Centre ("MGEC"), in which the Company holds a 35% working interest, continued in the third quarter of 2008. The Mackenzie pulp mill, the proposed steam host and fibre supplier for the project, was sold in September 2008. The viability of the pulp mill remains in question as the pulp mill's main fibre supply contract was cancelled following a court approved agreement with the fibre supplier. Discussions with the new owner of the mill have commenced and Pristine continues to monitor the status of the pulp mill. Pristine is working closely with the community area mill owners and the provincial government to establish a means to secure the necessary fuel supplies for MGEC. Negotiations with BC Hydro concluded in the third quarter of 2008 to amend the existing Electricity Purchase Agreement to address the impact of changes in the region's overall fibre supply environment on MGEC, including an increase in base power price and an extension to the in-service date requirement. Such amendments are subject to and pending final regulatory approval.
Development Activities
In the second quarter of 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, the 10 MW Anahim Green Energy project located near Anahim Lake, British Columbia, while the Cheslatta Green Energy project is 10 MW proposed project located near Cheslatta, British Columbia. If awarded a contract by BC Hydro, the projects will utilize a combination of sawmill wood residue, road side slash residue and standing pine beetle kill to produce power. Awards are expected to be announced by BC Hydro in the near future.
On September 29, 2008 SaskPower issued a Request for Qualifications ("RFQ") for approximately 100 MW of Peaking Generation and a Request for Qualifications for 200 to 400 MW of base load power. On November 3, 2008, the Company submitted a response to the peaking generation RFQ with the submission for the base load RFQ due on November 17, 2008.
On November 4, 2008 the Company submitted a bid pursuant to the Ontario Power Authority's Request for Proposals for approximately 350 MW of Peaking Generation in Northern York Region ("Northern York RFP"). The Ontario Power Authority is expected to announce the successful bidder in December 2008.
The Company is also actively developing projects to submit into BC Hydro's Clean Power Call ("Clean Call"). This Call has an acquisition target of 5,000 GWh per year and, under the terms of the Clean Call, projects with an extended in-service date of up to 2016 will be considered. Submissions for the Clean Call are due November 25, 2008. It is expected that Pristine will submit several new 5 MW waste heat recovery development sites on the Spectra pipeline as part of the EnPower venture, and subject to partner approval, up to 600 MW Klinaklini River run of river hydro project.
On October 2, 2008, the Ontario Power Authority issued Southwest GTA Request for Qualifications for up to 850 MV of combined cycle natural gas fired generation. The Company also plans to submit a response to the RFQ which is due November 28, 2008.
Conference Call
Pristine will hold a conference call on Wednesday, November 5, 2008 at 9:00 am MST (11:00 am EST) to discuss its third quarter 2008 results and provide an update on operations, construction and development activities. The call can be accessed at 1-800-814-4862 or 1-416-644-3432. A replay of the call will be available until November 19, 2008 at 1-877-289-8525 or 1-416-640-1917. The access code for the replay is 21288481 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 (TSX: PPX) is in the business of developing, owning and operating independent power plants that 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, bioenergy and hydroelectric projects, and smaller replicable waste heat recovery ERG(R) and bioenergy projects. Pristine currently has two projects in operation, one under construction, and one under contract and in advanced development. Pristine is developing projects in Ontario, British Columbia, Saskatchewan and Alberta. Visit www.pristinepower.ca for more information.