Maxim Power Corp.
TSX : MXG

Maxim Power Corp.

November 09, 2005 17:52 ET

MAXIM Power Corp. Announces Acquisition of a 67 MW Power Plant and Power Purchase Agreements for Milner and Cambodia

CALGARY, ALBERTA--(CCNMatthews - Nov. 9, 2005) - Maxim Power Corp. (TSX:MXG):

67 MW Power Plant Acquisition in Rhode Island, USA

Maxim Power Corp. ("MAXIM") is pleased to announce that it will be acquiring, through its wholly-owned subsidiary, Maxim Power (USA) Inc., a 67 Megawatt ("MW") natural gas-fired combined cycle cogeneration plant located in Pawtucket, Rhode Island, USA (the "Facility"). The acquisition has been approved by the Federal Energy Regulatory Commission ("FERC') in the United States and is targeted to close on or before November 11, 2005. The expected total capital investment, including closing costs, working capital adjustments and near term major maintenance on the turbine, is approximately US$3.25 Million.

MAXIM is currently evaluating proposals for short to medium term Power Purchase Agreements for output from the Facility ("PPAs") with several counterparties in the New England Power Pool ("NEPOOL") market. Given that the NEPOOL market generation supply mix is approximately 65% natural gas and oil fired, MAXIM believes that current market heat rates are unsustainably low. MAXIM also believes that the New England market has very positive fundamentals and that this Facility will prove to be a very low-cost high impact acquisition in MAXIM's portfolio of generating facilities.

Milner Power Plant

MAXIM is also pleased to announce that it has entered into a one year Power Purchase Agreement ("PPA") for 2006 with respect to the Milner power plant ("Milner"). Milner is a 144 megawatt ("MW") coal-fired power plant located near the town of Grande Cache, Alberta.

The PPA is structured to sell 138,000 MWh or an approximate equivalent of 18.5 MW of power to Prairie Power Ltd. ("PPL") over the period from January 1, 2006 to December 31, 2006, on a "fully unit contingent basis". The contract price is $73.75/MWh.

PPL is a high quality creditworthy counterparty that represents three Rural Electric Associations in Alberta. There are no credit requirements of MAXIM and MAXIM has the obligation to deliver power if, and only if, Milner is operational.

Cambodia

With respect to its operations in Cambodia, MAXIM is also pleased to announce that official notification has been received from Electricite du Cambodge that the Power Purchase Agreement for the C-1 Power Plant, which supplies electricity to the City of Phnom Penh, has been extended for a further six months to June 30, 2006. All debt associated with the C-1 facility will be retired by the end of 2005.

Upcoming Announcements

Subject to approval tomorrow by MAXIM's Board of Directors, MAXIM will release its third quarter financial results at the opening of trading on Friday, November 11, 2005. In addition, on October 28, 2005, MAXIM announced a proposed financing of up to $35 million via a non-brokered private placement of Common Shares at a price of $0.63 per share. It is anticipated that a release will be issued on Monday, November 14, 2005 to announce that the financing has closed. The funds raised will be used to repay certain bridge loan facilities and for working capital purposes.

Outlook

With the 67 MW acquisition in Rhode Island, USA, and completion of the Basin Creek Power Plant in Montana, USA, MAXIM will have a total of 385 MW electric and 45 MW of thermal net installed generating capacity by the end of 2005. This will represent an 85% increase in installed electric capacity from year end 2004. MAXIM will continue to execute on its strategy as an Independent Power Producer and is targeting significant growth through acquisitions, development and rationalization of power projects which utilize hydrocarbon based fuels and renewables in the markets of North America and Europe.

About MAXIM Power Corp.

Based in Calgary, Alberta, MAXIM is an Independent Power Producer, which acquires or develops, owns and operates innovative and environmentally responsible power projects. MAXIM currently owns and operates 25 power plants in Western Canada, Continental Europe and Cambodia, having 334 MW of electric and 45 MW of thermal net generating capacity with another 52 MW under construction. MAXIM trades on the TSX under the symbol "MXG". For more information about MAXIM, visit our website at www.maximpowercorp.com.

Statements in this release which describe Maxim's intentions, expectations or predictions, or which relate to matters that are not historical facts are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performances or achievements of MAXIM to be materially different from any future results, performances or achievements expressed in or implied by such forward-looking statements. MAXIM may update or revise any forward-looking statements, whether as a result of new information, future events or changing market and business conditions.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of the press release.

Contact Information

  • Maxim Power Corp.
    John R. Bobenic
    President and CEO
    (403) 750-9300
    or
    Maxim Power Corp.
    Victor S. Dusik
    Vice President Finance and CFO
    (403) 750-9319
    or
    Maxim Power Corp.
    Suite 1210, 715 - 5 Avenue S.W.
    Calgary, Alberta, Canada T2P 2X6
    Press Line: (403) 263-3021