Canada-based Maxim Power (TSX: MXG) said in an Aug. 5 earnings report that a second quarter highlight was that on June 10, it announced that it had entered into an agreement to sell its wholly-owned subsidiary, MAXIM Power (B.C.) Inc., to Village Farms International Inc.
MAXIM BC owns and operates the Vancouver Landfill Power Project, a 7.4-MW electrical and 9.1-MW thermal energy landfill gas cogeneration project in Delta, British Columbia. On July 17, it closed the sale of MAXIM BC, for total cash consideration of C$5.2m, which includes working capital closing adjustments. MAXIM will utilize the proceeds from the sale for strategic corporate purposes.
Another highlight was that on June 4, the Alberta Utilities Commission (AUC) approved MAXIM’s application to convert the fuel source for the Milner Expansion Project (M2) from coal to natural gas and to increase the generating capacity of the proposed expansion from 500 MW to 520 MW. This would be on top of existing Milner unit that can burn both coal and gas. The company noted that the coal burn at the existing Milner, 150-MW unit should be strong this year due to relatively high natural gas prices.
MAXIM said it is continuing its independent power producer (IPP) strategy through the advancement of its development initiatives.
- Deerland – As previously reported, MAXIM received regulatory approvals to construct and operate the Deerland peaking station, a 190-MW natural gas-fired peaking facility in Alberta. MAXIM has entered into agreements to secure firm natural gas transportation service for the Deerland peaking station. MAXIM expects that full-scale construction of the facility will commence pending commercial arrangements, which it is actively pursuing. MAXIM incurred costs in 2014 related to engineering and design, determining the natural gas pipeline selection route, and consultations with landowners. Additional costs will be incurred in 2014 to secure the right of way for the gas pipeline and to advance the electrical interconnection and engineering work.
- SUMMIT – SUMMIT is MAXIM’s development initiative located north of Grande Cache, Alberta, that owns metallurgical coal leases for M14 and Mine 16S. In 2014, MAXIM is reviewing options to secure delivery dates for mining equipment. MAXIM anticipates capital expenditures in the range of C$7.3m, which are required to be made from now through to the second quarter of 2015. It considers the advancement of the M14 and M16S development projects strategic for MAXIM in part because of the value of metallurgical coal and in part due to Milner’s ability to utilize tailings and lower quality fuels, which are by-products of the beneficiation of coal, to produce electricity. Despite the recent drop in near-term quarterly pricing for metallurgical coal, the long-run average price forecast has remained strong, which will allow for the economically viable development of SUMMIT.
- M2 – The existing infrastructure at the Milner site allows to MAXIM to leverage benefits including electrical connection, fuel delivery, water licenses, and a skilled operations team. MAXIM incurred costs in 2014 related to engineering and consulting work for permit amendments. In the remainder of 2014, MAXIM will incur further costs on engineering consultation.