Great Plains Metals Corp. press release
Pristine Power announces results for the year ended December 31, 2008 and updates operations, construction and development activities
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CALGARY, Feb. 26 /CNW/ - Pristine Power Inc. ("Pristine" or the "Company") today announced its financial results for the year ending December 31, 2008 and provided updates to its operations, construction activities and development initiatives. Pristine has filed with Canadian securities regulatory authorities its audited financial statements and related Management's Discussion and Analysis for the year ended December 31, 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.
"2008 was a breakout year in the evolution of Pristine as a leading Canadian-based independent power producer" commented Mr. Jeffry M. Myers, President and Chief Executive Officer. "We completed our $55 million initial public offering on the Toronto Stock Exchange in March of 2008, laying the financial foundation for the future growth of the Company. We commenced commercial operations of our two 5 MW EnPower Energy Recovery Generation ("ERG(R)") facilities in the second half of 2008, followed by the closing of a $24.6 million non-recourse financing in the midst of turbulent capital markets. Our East Windsor project continued construction as planned and on budget and is scheduled for completion in mid 2009. In December, we were awarded a 20 year contract by the Ontario Power Authority to build the 393 MW York Energy Centre in Ontario, our share of which is expected be 50%. With this win, Pristine's net MW under contract grew 817% to 220 MW at the end of 2008 from 24 MW at the end of 2007, excluding the Mackenzie Green Energy Centre. During 2008, the amount of capital to be deployed by Pristine grew from $60 million to over $240 million, excluding the Mackenzie Green Energy Centre project. All in all, 2008 was an outstanding year for the Company and a testament to the hard work of all of our employees and contractors."
Summary of Selected Financial Information
Selected annual financial information for the three most recently completed financial years is set forth below. All tabular amounts are in thousands of dollars, unless otherwise noted, except share and per share amounts
Year ended December 31, 2008 2007 2006
Net production (MWh)(1) 5,768 - -
Revenue 2,011 944 518 Expenses 11,077 5,036 3,654 Net income (loss) and comprehensive income (loss) (9,423) 1,274 (3,106) Net income (loss) per share Basic (0.35) 0.12 (0.30) Diluted (0.35) 0.11 (0.30) Shareholders' equity 55,828 13,290 5,935 Cash used in operations (9,971) (3,057) (4,285) Cash used in operations per share Basic (0.37) (0.27) (0.41) Diluted (0.37) (0.25) (0.41) Funds used in operations(2) (7,996) (4,034) (2,861) Funds used in operations per share(2) Basic (0.29) (0.36) (0.27) Diluted (0.29) (0.33) (0.27)
As at December 31 2008 2007 2006 Total assets 181,587 123,648 6,796 Long term debt 100,311 88,444 -
(1) Before non-controlling interest share (2) Non-GAAP measure
Highlights
The Company's operating results for the year ended December 31, 2008 are compared below to the operating results for the year ended December 31, 2007.
In the year ended December 31, 2008 Pristine incurred a net loss of $9.4 million ($0.35 per share basic and diluted) compared to income of $1.3 million ($0.12 per share basic and $0.11 per share diluted) in the same period in 2007. Included in 2007 was a gain of $5.5 million on disposal of the Company's 25% interest in the East Windsor Cogeneration project. Following such disposition, Pristine retained a 25% effective interest in the project. Increased development, general and administrative costs and stock based compensation also accounted for the increased loss during the year.
Development activities increased in 2008 compared to the same period in 2007, reflecting a significant increase in requests for proposals and requests for qualifications in British Columbia, Ontario and Saskatchewan to which Pristine responded. During 2008, Pristine submitted five project proposals and three qualification submissions, compared to no such proposals or submissions in 2007. Of these proposals, Pristine was awarded the York Energy Centre contract and is awaiting the results of the Kleana Power run-of-river project proposal, a project in which Pristine has a 10% net interest. While the Company's three proposals bid to Phase I of BC Hydro's Bioenergy Call for Power were not selected, the Company intends to resubmit these proposals to Phase II of Bioenergy Call later in 2009. Subsequent to year end, the Company also submitted two bids for 200 MW gas fired peaking plants in New Mexico, United States. The Company expects to hold a 50 percent interest in both of these projects.
General administrative costs increased due to a higher staff complement 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 existing and new directors at the time of the IPO. Options were issued to directors in lieu of cash compensation for 2008.
Funds used in operations during the year ended December 31, 2008 were $8.0 million ($0.29 per share basic and diluted) compared to $4.0 million ($0.36 per share basic and $0.33 per share diluted) for the year ended December 31, 2007, reflecting the aforementioned higher development and general administrative costs. Funds used in operations represent funds used in operations before changes in non-cash working capital (see "Non-GAAP Measures"). Cash used in operations during the year ended December 31, 2008 was $10.0 million ($0.37 per share basic and diluted) compared to cash used in operations of $3.1 million ($0.28 per share basic and $0.26 per share diluted) for the year ended December 31, 2007.
At December 31, 2008, Pristine had approximately $37.7 million of cash on hand and $2.3 million of cash held in trust that was subsequently released for general purposes in February, 2009. The Company expects to use these monies to fund future development and administrative activities as well as funding the project equity requirements of its newly awarded York Energy Centre project.
Projects in Operation
In 2008, the Company completed its first two power development projects, the 5MW waste heat recovery projects at Savona and 150 Mile House, British Columbia. Power generated from these two plants is sold to BC Hydro at fixed prices under the terms of related twenty-year contracts. Production at the plants in the fourth quarter of 2008 was negatively impacted by post-COD issues relating to construction quality control that is the responsibility of the major equipment supplier. The cost to rectify a significant portion of these issues is fully recoverable under warranty. Both plants returned to full availability in the third week of January, 2009. During 2008, the two plants generated 11,536 gross MWh (5,768 MW net) of electricity and revenues of $475,000, net, with a combined capacity factor of 47% compared to an expected capacity factor of 82%.
Project under Construction
Construction of the $207 million, 84 MW East Windsor Cogeneration Centre continued in 2008, and is on schedule and on budget. By year end, all major equipment had been installed and interconnection to the grid was completed. Back feed power will be available in April, 2009 upon completion and verification of all protections and relays. Commissioning is expected to begin in the second quarter of 2009 and commencement of commercial operation is anticipated in mid 2009. Remaining construction costs are expected to be fully funded by restricted cash on hand at December 31, 2008.
Projects under Contract
York Energy Centre
In December 2008, the Company was awarded a 20 year contract by the Ontario Power Authority to construct and operate the York Energy Centre, a 393 MW natural gas fired peaking generation facility, located in the Township of King, Region of York, Ontario. Pristine is expected to hold a 50% interest in the project with total project costs expected to be up to $365 million. The Company has received confirmation from municipal authorities that all land use approvals are in place, and the Company is currently completing the necessary provincial environmental assessment, permitting and site plan process to obtain the necessary approvals required for construction, with completion of the permitting process expected in the third quarter of 2009. The Company is also in the process of finalizing negotiations with engineering, procurement and construction contractors and major equipment suppliers for the facility. Preliminary discussions have commenced with potential lenders for long-term non-recourse financing, with such financing expected to be in place later in 2009 following receipt of all necessary construction permits. Construction is expected to commence in mid 2010 with completion anticipated late in 2011.
Mackenzie Green Energy Centre
Development of the proposed 65 MW Green Energy Centre has been deferred until resolution of fundamental project issues related to site and fuel supply.
"In addition to the specific project developments outlined above, we are anticipating the implementation of the Green Energy Act announced in the Province of Ontario," added Mr. Myers. "We also expect significant positive industry developments in British Columbia after the provincial election in May of this year. These developments are in addition to the major announcements by the Obama administration in the United States to implement incentives to effect major increases in green energy generation. With the New Mexico bids, Pristine is responding to a clear increase in demand for natural gas fired peaking as a compliment to the proliferation of less reliable wind generation."
Conference Call
Pristine (TSX:PPX) will hold a conference call on Friday, February 27, 2009 at 10:00 am MT (12:00 pm ET) to discuss its fourth quarter and full year 2008 results and provide an update on operations. The call can be accessed at 1-800-588-4942 or 1-416-644-3425. A replay of the call will be available until March 13, 2009 at 1-877-289-8525 or 1-416-640-1917. The access code for the replay is 21297813 followed by the pound sign. Pristine will release its fourth quarter and year end 2008 financial results before the market opens on February 26, 2009.
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, including development and financing of the Mackenzie and York projects, development of new projects and construction and financing of the East Windsor Project as well as future 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 two under contract and in advanced development. Pristine is developing projects in Ontario, British Columbia and the Western United States. Visit www.pristinepower.ca for more information.
PRISTINE POWER INC. CONSOLIDATED BALANCE SHEETS (in thousands)
As at December 31, 2008 2007
ASSETS Current assets Cash and cash equivalents $ 37,700 $ 1,567 Cash held in trust 2,320 - Accounts receivable 2,581 2,031 Prepaid expenses and deposits 1,922 625 Due from related parties 490 474 Derivative financial instruments 250 49 Restricted cash 770 - 46,033 4,746
Restricted cash 20,062 75,235 Investments 2,250 2,252 Property, plant and equipment 113,242 41,415 $ 181,587 $ 123,648
LIABILITIES Current liabilities Accounts payable and accrued liabilities $ 7,770 $ 8,343 Income tax payable 114 - Due to related parties 164 51 Current portion of long-term debt 877 - 8,925 8,394 Asset retirement obligation 321 211 Long-term debt 99,434 88,444 99,755 88,655 Non-controlling interest 17,079 13,309
SHAREHOLDERS' EQUITY Share capital 67,441 16,948 Contributed surplus 1,928 464 Deficit (13,541) (4,122) 55,828 13,290 $ 181,587 $ 123,648
Approved on behalf of the Board of Directors of Pristine Power Inc.
"Jeff Myers" "Stephen White"
--------------------- Director --------------------- Director (Signed) (Signed)
PRISTINE POWER INC. CONSOLIDATED STATEMENTS OF NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) AND DEFICIT (in thousands)
Years Ended December 31, 2008 2007
REVENUES Project management fees $ 664 $ 794 Interest and other income 872 150 Power generation sales 475 - 2,011 944
EXPENSES General and administrative 5,816 3,988 Project development costs 4,043 546 Stock based compensation 1,174 63 Interest, bank, and finance charges 167 979 Plant operating costs 204 - Unrealized gain on derivative financial instruments (201) (49) Foreign exchanges gain (518) (539) Depreciation, amortization and accretion 392 48 11,077 5,036
NET LOSS BEFORE THE UNDERNOTED (9,066) (4,092)
OTHER ITEMS
Gain on disposal of investments - 5,456
NET INCOME (LOSS) BEFORE INCOME TAXES (9,066) 1,364
Current income taxes 114 -
NET INCOME (LOSS) BEFORE NON-CONTROLLING INTEREST (9,180) 1,364
NON-CONTROLLING INTEREST 243 90
NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (9,423) 1,274
DEFICIT, BEGINNING OF YEAR (4,122) (5,396)
ADOPTION OF NEW ACCOUNTING POLICIES 4 - DEFICIT, END OF YEAR (13,541) (4,122)
NET INCOME (LOSS) PER SHARE Basic $ (0.35) $ 0.12 Diluted $ (0.35) $ 0.11
PRISTINE POWER INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Years Ended December 31, 2008 2007
OPERATING Net income (loss) $ (9,423) $ 1,274 Add (deduct) non-cash items: Depreciation, amortization and accretion 392 48 Stock based compensation 1,174 63 Non-controlling interest 243 90 Gain on disposal of investments - (5,456) Other 7 (4) Unrealized foreign exchange gain (188) - Unrealized gain on derivative financial instrument (201) (49) (7,996) (4,034)
Change in non-cash working capital (1,975) 977
Cash used in operating activities (9,971) (3,057)
FINANCING Proceeds from debt issued 12,300 89,500 Repayment of long-term debt (25) - Deferred financing costs (357) (1,056) Advances from (to) partners 96 (387) Proceeds from issuance of shares (net of share issue costs) 50,494 5,531 Proceeds from issuance of warrants (net of issue costs) - 335 Change in non-cash working capital 35 -
Cash provided by financing activities 62,543 93,923
INVESTING Restricted cash 54,466 (75,235) Property, plant and equipment (72,132) (35,802)
Cash held in trust (2,320) - Non-controlling interest contribution 3,789 13,180 Investments - (2,250) Proceeds on the disposal of investment - 700 Change in non-cash working capital (359) 6,130
Cash used in investing activities (16,556) (93,277)
Unrealized foreign exchange gain on foreign denominated cash 117 -
Increase (decrease) in cash and cash equivalents 36,133 (2,411)
Cash and cash equivalents, beginning of year 1,567 3,978
Cash and cash equivalents, end of year $ 37,700 $ 1,567