Base Carbon Inc. (Cboe CA: BCBN) (OTCQX: BCBNF) with operations
through its wholly-owned subsidiary, Base Carbon Capital Partners
Corp. (“
BCCPC”, together, with affiliates,
“
Base Carbon”, or the “
Company”),
is pleased to announce its first-quarter 2024 consolidated
financial results and operational highlights. All financial
references are denominated in U.S. dollars, unless otherwise noted.
Company Highlights for the Three Months
Ended March 31, 2024:
- Rwanda
cookstoves project successfully transitioned to the carbon credit
generation stage following the first issuance of 717,558
correspondingly adjusted carbon credits, each labeled with Verra’s
“Article 6 Authorized” designation.
-
Subsequent to quarter-end, approximately $12.5 million
payment received from Vietnam project offtaker following delivery
of carbon credits associated with the project’s credit
issuance.
- Updated
accounting valuation for the Rwanda cookstove project using a
discounted cashflow methodology and resulting in an unrealized
accounting gain of $19.8 million in the quarter.
- As of March 31, 2024, the
Company had total assets of $121.1 million, including $0.7 million
in cash and cash equivalents, and $118.3 million in investments in
carbon credit projects.
Financial Highlights:
(in thousands of United States Dollars) |
Three months ended |
Three months ended |
|
March 31, 2024 |
March 31, 2023 |
Unrealized loss on investments in carbon credit projects |
$ |
(18,881 |
) |
$ |
- |
|
Total operating expenses |
|
(1,762 |
) |
|
(1,289 |
) |
Operating loss for the period |
|
(20,643 |
) |
|
(1,289 |
) |
Income tax recovery |
|
1,038 |
|
|
- |
|
Net loss for the period |
|
(19,838 |
) |
|
(1,100 |
) |
Basic loss per share |
|
(0.17 |
) |
|
(0.01 |
) |
Diluted loss per share |
$ |
(0.17 |
) |
$ |
(0.01 |
) |
|
|
|
|
|
|
|
(in thousands of United States Dollars) |
March 31, 2024 |
December 31, 2023 |
Cash and Cash Equivalents |
$ |
667 |
|
$ |
1,401 |
|
Current investment in carbon credit projects |
|
36,703 |
|
|
34,813 |
|
Non-current investment in carbon credit projects |
|
81,636 |
|
|
102,273 |
|
Total assets |
$ |
121,062 |
|
$ |
141,243 |
|
Vietnam Household Devices Project Update
In April 2024, the Company, through BCCPC,
received aggregate payment of approximately US$12.5 million from
Vietnam project offtaker for the delivery of credits associated
with the project’s most recent carbon credit issuance.
Following the latest adoption of current
market-based methodological standards for the Vietnam household
devices project, the project is now expected to generate
approximately 33 million carbon credits over the life-of-project,
inclusive of the initial 7.4 million carbon credits contracted
under a fixed price offtake arrangement. The reduction in
anticipated carbon credits has led to an unrealized accounting loss
of $38.6 million in the quarter, for an overall project value of
$85.4 million as of March 31, 2024. The adoption and associated
changes have no impact on the fixed price offtake agreement.
BCCPC has deployed 95% of the committed project
capital with the remaining commitments primarily tied to project
monitoring and verification activities, which are anticipated to be
fully deployed in regular intervals by year-end 2024.
Rwanda Cookstoves Project
Update
In April 2024, the Company received its first
carbon credits generated from the Rwanda cookstoves project when
project developer the DelAgua Group transferred 717,558
correspondingly adjusted carbon credits to BCCPC, each designated
by Verra with an Article 6 Authorized label. This milestone marked
the project’s successful transition to the carbon credit generation
stage, with regular future issuances expected at semi-annual
intervals, resulting in an updated accounting valuation using a
discounted cashflow methodology.
The Company is currently evaluating all sales
options with respect to the initial 717,558 carbon credits and
believes that the potential pricing upside of correspondingly
adjusted carbon credits will significantly offset any volume
reductions pursuant to the implementation of the Letter of
Authorization with Government of Rwanda detailed in the Company’s
press release on April 8, 2024.
India Afforestation, Reforestation, and
Revegetation (ARR) Project Update
The Company, through BCCPC, executed a project
agreement with Value Network Ventures Advisory Services Pte Ltd. to
fund an expected $13.6 million related to the reforestation of
degraded rural farmlands in the northern Indian state of Uttar
Pradesh. The project's aim is to facilitate the planting of
approximately 6.5 million trees, from which it is expected 1.6
million high-quality nature-based removal carbon credits will be
generated over an expected 20-year project life.
As of March 31, 2024, Base Carbon has funded 32%
of the committed project capital with approximately 79% of the
planned 6.5 million trees planted to date with the remaining trees
expected to be planted within 2024.
About Base Carbon
Base Carbon is a financier of projects involved
primarily in the global voluntary carbon markets. We endeavor to be
the preferred carbon project partner in providing capital and
management resources to carbon removal and abatement projects
globally and, where appropriate, will utilize technologies within
the evolving environmental industries to enhance efficiencies,
commercial credibility, and trading transparency. For more
information, please visit www.basecarbon.com.
Media and Investor
Inquiries
Base Carbon Inc.Investor RelationsTel: +1 647
952 3979E-mail: investorrelations@basecarbon.com
Media InquiriesE-mail: media@basecarbon.com
Cautionary Statement Regarding Forward
Looking Information
This press release contains “forward-looking
information” within the meaning of applicable securities laws
relating to the focus of Base Carbon’s business, the expected
issuance, and timing, of carbon credits, the application of Article
6 of the Paris Agreement and the “Article 6 Authorized Label” and
market reaction thereto, the receipt of proceeds from the
disposition of carbon credits, and project registration and the
continued development, including the planting of trees, of the
India afforestation, reforestation, and revegetation project. In
some cases, but not necessarily in all cases, forward-looking
information may be identified by the use of forward-looking
terminology such as “expects”, “anticipates”, “intends”,
“contemplates”, “believes”, “projects”, “plans” or variations of
such words and similar expressions or state that certain actions,
events or results “may”, “could”, “would”, “might”, “will” or “will
be taken”, “occur” or “be achieved”. In addition, any statements
that refer to expectations, projections or other characterizations
of future events or circumstances contain forward-looking
information. Statements containing forward-looking information are
not historical facts but instead represent management’s
expectations, estimates and projections regarding future events.
These statements should not be read as guarantees of future
performance, results, or achievements.
Although management believes that the
anticipated future results, performance or achievements expressed
or implied by the forward-looking information are based upon
reasonable assumptions and expectations, readers should not place
undue reliance on forward-looking information because it involves
assumptions, known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements to differ materially from anticipated future results,
performance or achievements expressed or implied by such
forward-looking information.
In respect of the Rwanda cookstoves project and
the Vietnam household devices project, certain factors that
influence the commercial success of such projects and successfully
meeting the milestones related to such projects, including the
timing and number of expected carbon credits, include among other
things: (i) the Company has retained industry leading
experts/consultants/advisors to assist with the evaluation,
planning, negotiation and execution of such projects, (ii) the work
product, including monitoring reports, of each project’s validation
and verification Body, (iii) project costs and carbon credit market
prices, (iv) the verification of ongoing project monitoring reports
and issuance of carbon credits by Verra, (v) changes to laws and
regulation in applicable jurisdictions, and (vi) the Company has
sufficient funds on hand to make carbon credit purchase price
payments.
In respect of the Rwanda cookstoves project and
the Vietnam household devices project, certain assumptions that
influence the commercial success of such projects, including the
timing and number of expected carbon credits, include among other
things: (i) distributed cookstoves and water purifiers perform to
specification when used and participating households use the
devices as contemplated by project estimates, (ii) the Company’s
in-country project partners, being the DelAgua Group in the case of
the Rwanda cookstoves project and SIPCO and the project offtaker in
the case of the Vietnam household devices project, perform their
obligations in connection with the development and operation of the
projects, , and (iii) continued participant involvement and public
support of the voluntary carbon market.
In respect of the India afforestation,
reforestation, and revegetation project, certain factors that
influence the commercial success of the project include, among
other things: (i) the Company’s expertise with respect to the
evaluation, planning and negotiation of the project, (ii) the
conduct of the Project counterparties, including cooperation with
local small-land owners, (iii) project costs and carbon credit
market prices, (iv) ongoing project monitoring and issuance of
carbon credits by Verra, (v) changes to laws and regulation in the
Republic of India, and (vi) extreme weather event and natural
disasters.
In respect of the India afforestation,
reforestation, and revegetation project, certain assumptions that
influence the commercial success of the project include, among
other things: (i) the development the project remains in line with
anticipated timelines and costs, (ii) project counterparties,
including project partner Value Network Ventures Advisory Services
Pte Ltd., its subcontractors and local small-land owners, perform
their contractual and/or standard operating procedures, (iii) the
successful planting and survival of trees, (iv) the growth rates of
trees are consistent with the expectations under the project which
is then reflected by monitor reports accepted by Verra, (v) the
Company has sufficient funds to satisfy its capital commitments,
and (vi) continued participant involvement and public support of
the voluntary carbon market.
The forward-looking statements made herein are
subject to a variety of risk factors and uncertainties, many of
which are beyond the Company’s control, which could cause actual
events or results to differ materially and adversely from those
reflected in the forward-looking statements. Readers are cautioned
that forward-looking statements are not guarantees of future
performance. Specific reference is made to the management
discussion and analysis for the Company’s fiscal year ended
December 31, 2023 and the most recent Annual Information Form on
file with the Canadian provincial securities regulatory authorities
(and available on www.sedarplus.ca) for a more detailed discussion
of some of the factors underlying forward-looking statements and
the risks that may affect the Company’s ability to achieve the
expectations set forth in the forward-looking statements contained
in this press release.
Should one or more of the risks and
uncertainties materialize, or should underlying assumptions prove
incorrect, actual events or results may vary materially and
adversely from those described in the forward-looking information.
The forward-looking information contained in this press release is
provided as of the date of this press release, and the Company
expressly disclaims any obligation to update or alter statements
containing any forward-looking information, or the factors or
assumptions underlying them, whether as a result of new
information, future events or otherwise, except as required by
law.
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