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Sprott Power Corp. Reports 2010 Financial Results

^{Published on 2011-03-14 04:21:11 - Market Wire}
 

TORONTO, March 14 /CNW/ - Sprott Power Corp. ("Sprott Power" or "the Company"), (TSX: SPZ), a developer, owner and operator of renewable energy projects, today announced its 2010 financial results for the period from incorporation on May 26, 2010, to December 31, 2010.

2010 Operational Highlights

• Sprott Power was incorporated on May 26, 2010.
  
  
• On May 31, 2010, Sprott Power acquired Renewable Energy Developers Limited Partnership.
  
  
• In June 2010, Sprott Power completed a private placement of units for gross proceeds of $20,706,864.
  
  
• In December 2010, Hydro Québec Distribution awarded the Company a PPA for 24.0 MW.

Subsequent Events

• On January 31, 2011, Sprott Power combined with First Asset PowerGen Fund ("Fund") pursuant to a previously announced statutory plan of arrangement, and the resulting combined company was named "Sprott Power Corp."  On completion of the transaction, the shares of Sprott Power were listed under the symbol "SPZ" on the Toronto Stock Exchange ("TSX") and commenced trading effective February 3, 2011.
  
  
• On January 31, 2011, Sprott Power executed an asset purchase agreement to acquire substantially all of the assets of Amherst Wind Power LP.  Sprott Power expects to close the acquisition within 60 days, subject to satisfaction of all remaining conditions to closing.
  
  
• On February 8, 2011, Sprott Power acquired 100% of the shares of Sky Generation Inc. ("SkyGen").
  
  
• After completion of the aforementioned transactions, Sprott Power has a portfolio of 45.7 MW of operational wind assets, 91.0 MW of capacity accepted for long-term power purchase agreements, 199.6 MW in its advanced stage development portfolio and a coast-to-coast development portfolio of wind and hydro assets with a total net potential capacity exceeding 1,500 MW.

"We are pleased with the progress we made in 2010 towards achieving our goal of becoming a leading developer, owner and operator of renewable energy projects," said Jeff Jenner, CEO of Sprott Power.  "We recently completed our amalgamation with First Asset PowerGen Fund and began trading on the TSX.  We look forward to building a company that will offer investors the potential for both income and growth."

Financial Review
For the period from May 26, 2010 to December 31, 2010 Sprott Power has not generated any revenue.    The operating expenses of Sprott Power for the period from May 26 to December 31, 2010, totaled $1,997,723 and is primarily comprised of salaries and benefits of $496,842 (net of capitalized project salaries and benefits of $94,502), expenses incurred related to the Fund and SkyGen transactions of $965,557, and project development expenses of $432,927.  Project development expenses of $432,927 represent costs incurred with respect to the Company's 91.0 MW of near-term development projects for environmental studies, wind data collection and consulting services for the further development of these projects.

The net loss for the period from May 26, 2010, to December 31, 2010, was $1,997,273 while for the three months ended December 31, 2010, the net loss was $1,426,753 compared to a net loss of $485,900 for the three months ended September 30, an increase of $940,853.  The increase in the net loss is a result of Sprott Power not yet generating any revenue while incurring increasing operating and transactional expenses as it focuses on establishing its business operations, including $965,557 incurred as a result of the transactions with the Fund and SkyGen.

As at December 31, 2010, Sprott Power had approximately $17.5 million in working capital.  Management believes that the Company has sufficient working capital to fund its current operations as well as the operating assets acquired from the merger with the Fund and the acquisition of SkyGen.  These assets are expected to immediately contribute positive cash flow after providing for principal repayments of long-term debt.  As additional projects are developed capital will be required for construction and preparation towards commercial operations. 

Outlook
With the successful completion of its transactions with the Fund and SkyGen, management's focus is on integrating its operating assets and bringing into production several of its near-term development projects. 

In 2011, Sprott Power plans to:

About Sprott Power Corp.
Sprott Power is a publicly-traded (TSX: SPZ) Canadian-based company dedicated to the development, owning and operating of renewable energy projects. Through acquisitions, partnerships and joint ventures, Sprott Power seeks to provide its shareholders with exposure to the renewable power generation sector. Sprott Power is managed by Sprott Power Consulting LP, of which Sprott Consulting LP, a business unit of Sprott Inc. (TSX: SII), is the sole limited partner.

Forward-Looking Statements
Certain information contained in this press release may constitute "forward-looking information" which reflect the current expectations of Sprott Power. This information reflects Sprott Power's current beliefs with respect to future events and are based on information currently available to management. Forward-looking information involves significant known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking information including, without limitation, the risks listed under the heading "Risk and Uncertainties" in the Management Discussion and Analysis of Financial Results dated March 14, 2011.  Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking information contained in this release. Although forward-looking information contained in this release is based upon what Sprott Power believes to be reasonable assumptions, management cannot assure investors that actual results, performance or achievements will be consistent with this forward-looking information. The forward-looking information is made as of the date of this release and Sprott Power does not assume any obligation to update or revise it to reflect new events or circumstances, except as required by law.