Maxim Power Corp. announces the EPC of the CCGT Milner 2 project
CALGARY, Alberta, June 30, 2021 (GLOBE NEWSWIRE) – Maxim Power Corp. (“MAXIM“or the”society“) (TSX: MXG) announced today that it is moving forward with the Company’s project to expand M2 into a combined cycle gas turbine (“CCGT”) through the installation of heat recovery technology. The CCGT expansion project is expected to increase total generation capacity from 204 MW to approximately 300 MW and improve operational efficiency, resulting in lower O&M costs per MWh. The current estimated cost of the CCGT expansion project is $ 125 million before financing costs. MAXIM expects the expansion to begin commercial operations in December 2022.
The CCGT expansion project is funded by debt, existing liquidity and cash flow from operations during the construction period. At this date, MAXIM expects to have sufficient liquidity to carry out the CCGT extension project.
MAXIM, through a wholly owned subsidiary, entered into an engineering, procurement and construction contract (“CPE“) for the CCGT expansion project. The EPC contractor is a joint venture between PCL Industrial Management Inc. and Overland Contracting Canada Inc., a Black & Veatch company, which are the same parties that built the plant at existing M2 single cycle. The EPC contractor has agreed to complete and deliver the expanded plant as a turnkey project at a fixed price. The value of the EPC contract is approximately $ 86 million and the remaining cost of $ 39 million is the owner’s costs for the activities for which MAXIM is responsible.
M2 will continue to operate in single cycle mode during construction. The commissioning of the expanded facility is expected to take place over a period of 3 months during which there will be periodic shutdowns of the existing M2 plant while work is carried out to connect this plant to waste recovery technology. heat.
MAXIM has amended its senior secured credit facility. The amended senior secured credit facility was arranged by ATB and Fiera Private Debt and the total borrowing base under it was increased to $ 105 million to finance construction, of which $ 28.5 million was dollars are currently being drawn, $ 62.4 million is available for construction and the remainder available for general corporate use and letters of credit. The construction facilities of up to $ 62.4 million consist of two non-revolving construction loans and a revolving credit facility of $ 5 million. Construction loans have amortization requirements ranging from five to ten years from the completion of construction of the CCGT extension. All loans under the senior secured credit facility mature on June 30, 2026.
MAXIM has also extended the maturity date of its current subordinated convertible secured credit facility to provide additional construction financing, if required. The total capacity under this credit facility is unchanged at $ 75 million, of which $ 29.4 million is currently drawn. This facility matures on September 25, 2026.
Based in Calgary, Alberta, MAXIM is one of Canada’s largest truly independent power producers. MAXIM is now fully focused on energy projects in Alberta. Its core asset – the 204 MW (âM2â) HR Milner plant in Grande Cache, Alta. – is a state-of-the-art natural gas-fired power plant that was commissioned in the second quarter of 2020. MAXIM is currently increasing the capacity of M2 to around 300 MW and will simultaneously achieve an improvement in plant efficiency by investing in combined cycle heat recovery technology. In addition, MAXIM continues to explore other development options in Alberta, including its currently licensed gas-fired power generation project and the authorization of its wind power generation project. MAXIM trades on the TSX under the symbol “MXG”. For more information about MAXIM, visit our website at www.maximpowercorp.com.
For more information, please contact: Bob Emmott, President and Chief Operating Officer, (403) 263-3021.
Note regarding forward-looking statements
This document contains forward-looking information. This information relates to future events and the future performance of the Company. All information and statements contained in this document that are not clearly historical in nature constitute forward-looking information, and the words “may”, “will”, “should”, “could”, “expect”, ” plan “,” intention “,” anticipate “,” believe “,” estimate “,” propose “,” foresee “,” potential “,” continue “,” aim “,” budget “or the negative of these terms or other comparable terminology are generally intended to identify forward-looking information. This information represents the Company’s projections, estimates, expectations, beliefs, plans, objectives, assumptions, intentions or internal statements about future events or performance. This information involves known or unknown risks, uncertainties and other factors which may cause actual results or events to differ materially from those anticipated in this forward-looking information.
MAXIM believes that the expectations reflected in this forward-looking information are reasonable; however, one should not place undue reliance on such forward-looking information, as there can be no assurance that the plans, intentions or expectations upon which it is based will be achieved. This press release contains forward-looking information regarding, among other things, the planned commissioning period for the CCGT extension, the expected completion date of the CCGT extension, the current cost estimates for the CCGT extension, operational disruptions expected at M2, the value of the EPC contract (above all rider) and MAXIM’s financing plans relating to the extension of the CCGT. The reader is warned that this information, although considered reasonable by the Company, may prove to be inaccurate. Actual results obtained during the forecast period will differ from the information provided in this document due to many known and unknown risks and uncertainties and other factors. A number of risks and other factors could cause actual results to differ materially from those expressed in the forward-looking information contained herein, including, but not limited to, MAXIM’s continued compliance with its agreements. credit, liquidity, interest rates, availability and cost of finance, labor and services, the impact of increasing competition, changes in laws, regulations and policies government in terms of carbon taxation and the Company’s ability to access capital.
With respect to the forward-looking information contained in this document, the Company has made assumptions regarding, among others: the scope and design of CCGT’s expansion, that no change order will vary the costs associated with the ‘expansion of CCGT, timely receipt of all required regulatory approvals and the Company’s ability to obtain qualified personnel, equipment and services in a timely and cost effective manner; that no construction delay will occur with regard to the expansion of the CCGT; that the rules, laws, regulations and policies described herein relating to carbon taxation will remain in effect as provided herein; and the Company’s ability to obtain financing on acceptable terms when and when required. MAXIM’s management has included the above summary of the assumptions and risks associated with forward-looking information included in this document in order to provide investors with a more complete perspective on the future operations of the Company. Readers are cautioned that this information may not be appropriate for other purposes.
Readers are cautioned that the above lists of factors are not exhaustive. The forward-looking information contained in this document is expressly qualified by this cautionary statement. The forward-looking information contained in this document is made as of the date of this document and the Company disclaims any intention or obligation to publicly update this forward-looking information, whether as a result of new information, events or future results. or otherwise, other than as required by applicable Canadian securities laws.