NaiKun Wind Releases First Quarter Financial Results (Canada)
NaiKun Wind Energy Group Inc. (TSX-Venture: NKW) today announced its financial results for the three months ended December 31, 2010, a fiscal period during which the Company realized the full impact of its restructuring and continued to progress the new strategies it began during the last quarter of fiscal 2010, all in an effort to maximize shareholder value.
NaiKun Wind is confident that the Company’s recent undertakings, including our corporate restructuring and new strategies for procuring an electricity supply contract, represent the best available opportunities to support the advancement of the project and maximize shareholder value.
The corporate restructuring conducted during the final two quarters of the fiscal year is now complete and spending by NaiKun Wind going forward will be substantially lower as a result. The Company’s estimated cash requirement for operations in the year ending September 30, 2011 is $1.5 million. On this basis, the Company has sufficient financial resources to sustain operations into 2014 and beyond.
An overview of NaiKun Wind’s corporate restructuring and first quarter results include:
* As at December 31, 2010, NaiKun Wind had $7.3 million in cash and cash equivalents, compared to $7.8 million at the end of September 2010. In addition to this $7.3 million in cash, NaiKun Wind has $0.7 million in loan receivables, the proceeds of which the Company expects to receive by Mar 2011.
* Effective April 1, 2010, as stated in the Company’s news release of May 20, 2010, compensation to members of the Board was reduced by 50%. As part of the newly lowered Board compensation it was also decided that going forward 25% of that compensation would be paid in the form of common shares in lieu of cash. Accordingly, the Company issued 76,176 shares for the quarter ended December 31, 2010. Additionally, the Company issued 158,881 common shares to Michael O’Connor for the period June 15, 2010 to December 31, 2010. Mr. O’Connor’s employment agreement was modified in December 2010, in recognition of his new role as President and CEO effective June 15, 2010, awarding $50,000 additional annual compensation to be paid in the form of commons shares in lieu of cash.
* For the three months ended December 31, 2010, NaiKun Wind incurred a net loss of $0.5 million ($0.01 per share), compared to $1.5 million ($0.04 per share) for the three months ended December 31, 2009.
As electricity demand in British Columbia continues to grow and the supply from certain BC Hydro programs continue to experience significant attrition, the Company believes there will be a need for BC Hydro to procure appreciably more generation in the near term, to meet the legislated Provincial self-sufficiency targets, to fulfill electricity export goals and to meet legislated Green House Gas (GHG) obligations. The NaiKun Wind project is at an advanced stage of development and would provide diverse and substantial employment opportunities (particularly on the Province’s north coast and on Haida Gwaii), abundant clean energy and would also help to close the Province’s growing electricity supply/demand gap.
BC Hydro’s recent projections indicate there will be a growing shortage of approximately 13,000 GWh by 2020 with no planned exports and limited DSM (Demand-Side Management) … 13,000 GWh equates to 9 NaiKun projects. After 2020 the Energy Gap continues to grow faster.
NaiKun Wind continues to refine and progress the wind resource and work with industry to reduce the cost and improve the productivity of the planned project.
The North Coast Wind Energy Field is a proven and permitted world class resource. As experts report, the energy output is a function of the cube of the wind velocity and air density. A 10 m/s wind resource at sea level (NaiKun project) produces nearly 40% more energy than an 8.5 m/s wind resource (more common).
This wind resource exists in a province where GHG reduction has been legislated, where there is a growing electricity supply shortage and where electricity self-sufficiency and electrical exports are important components of the governments Energy Policy.
NaiKun Wind Energy Group Inc. is a British Columbia-based renewable energy company with offices in Vancouver, Masset and Skidegate. Located on B.C.’s northwest coast, where the wind resource is one of the strongest and most consistent in the world, NaiKun Wind’s 396MW offshore wind project would generate enough energy to provide electricity to 130,000 B.C. homes. The NaiKun Wind project is at an advanced stage of development with environmental certification from the Provincial Government and agreements in place with key suppliers and First Nations. Given its development status, construction can begin within two years of the award of an electricity purchase agreement. For more information on NaiKun Wind, please visit www.naikun.ca.
Caution Regarding Forward-Looking Statements – This news release contains certain forward-looking statements, including statements regarding the business and anticipated financial performance of the Company. These statements are subject to a number of risks and uncertainties. Actual results may differ materially from results contemplated by the forward-looking statements. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and should not place undue reliance on such forward-looking statements. The Company does not undertake to update any forward looking statements, oral or written, made by itself or on its behalf.
Source: naikun, February 14, 2011