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Sprott Power Corp. Announces 2011 First Quarter Results

^{Published on 2011-06-13 04:55:47 - Market Wire}
 

TORONTO, June 13, 2011 /CNW/ - Sprott Power Corp. ("Sprott Power" or "the Company"), (TSX: SPZ), an owner, operator and developer of renewable energy projects, today announced its financial and operational results for the first quarter ended March 31, 2011.

Operational Highlights

• Completed the previously announced transactions with First Asset PowerGen Fund (the "Fund") and Sky Generation Inc. ("SkyGen") which provided:
  
  
• 45.7 megawatts ("MW") of operating wind assets which historically have generated approximately $10.9 million in revenue per annum.
  
  
• An additional development pipeline of approximately 37.3 MW in near term wind projects with power purchase agreements ("PPAs") and 69.2 MW of combined wind (21.2 MW) and hydro (48.0 MW) advanced stage projects.
  
  
• Additional cash and restricted cash of approximately $5.2 million.
  
  
• Acquired the rights to a 31.5 MW wind power project located in Amherst, Nova Scotia.  During the quarter, Sprott Power was engaged with suppliers and equity and debt partners to advance the project with a targeted completion date in the first quarter of 2012.
  
  
• In conjunction with its partners, the Municipalité de Saint-Philémon and the MRC de Bellechasse, signed a 20-year power purchase agreement with Hydro-Québec Distribution for the 24.0 MW Saint-Philémon wind farm.  The Company will own 51% of the project which will be comprised of 8 to 12 wind turbines. It is anticipated that construction will begin in 2013 with commercial operations commencing in the fourth quarter of 2014.

Financial Summary

• Revenue for the period was $2.1 million and included the results of the Fund and SkyGen for approximately 2 months.  Had these operations had been consolidated from January 1, 2011, they would have contributed revenue of approximately $3.2 million.
  
  
• Earnings before interest, income taxes, depreciation and amortization ("EBITDA") was $1.2 million during the first quarter.
  
  
• Net income was $0.4 million or $0.01 per share.
  
  
• At March 31, 2011, the Company had working capital of $12.0 million including $16.3 million in cash.  Total assets at March 31, 2011, were $133.3 million including restricted cash of $7.3 million; long-term debt was $55.1 million; and total equity was $54.7 million.

Recent Events

• On May 11, 2011, the Company announced that it signed a non-binding letter of intent to sell one of its advanced-stage hydro projects, the 30.0 MW Anyox Creek Hydroelectric Project, and other nearby long-term hydro development assets located in north western British Columbia.  The sale is subject to the successful completion of various conditions and is anticipated to close on or before June 30, 2011.
  
  
• On June 13, 2011, the Company announced the signing of the material supply and financing agreements for the 31.5 MW wind power project located in Amherst, Nova Scotia.  Construction for the project has already commenced and is expected to be completed in the first quarter of 2012.  The material agreements included a contract with Suzlon Wind Energy Corporation ("Suzlon") in which Suzlon will provide fifteen S97-2.1 MW wind turbines, along with the engineering, procurement, construction and commissioning services.  Pursuant to a 10-year warranty, maintenance and service agreement, Suzlon will also provide operation and maintenance services for the Amherst Project. Sprott Power also signed a limited partnership agreement of SP Amherst LP which will own the project assets.  The Company's partner in the project is Firelight Infrastructure Partners LP ("Firelight") who will co-invest with Sprott Power a total of $61.0 million to fund all of the capital needs of the project.  Sprott Power will retain 51% ownership in the project and has the right to purchase Firelight's partnership interest by December 31, 2013.  Simultaneously, SP Amherst LP signed binding Letters of Intent with lenders to provide up to $45 million of debt financing for the project.

"The first quarter of 2011 was transformative for Sprott Power," said Jeff Jenner, CEO of Sprott Power.  "We integrated the operating assets acquired from the Fund and SkyGen transactions and were successful in advancing several of our near-term development projects.  In addition, Sprott Power continues to seek opportunities to partner with other renewable energy developers in order to expand our operations. The Amherst project has further validated our business model and we look forward to its successful completion."

The Company's full financial statements and Management's Discussion and Analysis for the quarter ended March 31, 2011 are available at [ www.sedar.com ] or the Company's website at [ www.sprottpower.com ].

Non-IFRS Financial Measures

This press release includes financial terms (including EBITDA) that the Company utilizes to assess the financial performance of its business that are not measures recognized under International Financial Reporting Standards ("IFRS"). These non-IFRS measures should not be considered alternatives to performance measures determined in accordance with IFRS and may not be comparable to similar measures presented by other issuers.

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 project development efforts, acquisitions, partnerships and joint ventures, Sprott Power provides its shareholders with income and growth from the renewable power generation sector of the energy industry.

Forward-Looking Statements

Certain information contained in this press release may constitute "forward-looking information" which reflects 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 June 13, 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.