In a release issued under the same headline on Wednesday, August
14th by Base Carbon Inc. (Cboe CA: BCBN) (OTCQX: BCBNF),
please note that in the financial highlights chart, the references
to “loss per share” have been updated to “income per share”. The
corrected release follows:
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
second-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 and Six
Months Ended June 30, 2024:
-
Continued generation and sale of carbon credits from the
Company’s projects:
- Received
payments of approximately $12.5 million during the quarter from
carbon credit sales pursuant to the Vietnam project offtake
arrangement.
-
Subsequent to quarter-end, received a further payment of
approximately $11.2 million from the sale of carbon credits
generated from its Vietnam and Rwanda projects.
- First
issuance of 717,558 correspondingly adjusted carbon credits from
the Rwanda cookstoves project achieved with each carbon credit
labeled with Verra’s “Article 6 Authorized” and representing a
carrying value of $9.3 million.
-
Continued operational success in India ARR project with
over 82% of the planned 6.5 million trees planted to date with full
planting continued to be expected within 2024.
- As of June 30, 2024, the
Company had total assets of $127.2 million, including $7.5 million
in cash and cash equivalents, and $108.8 million in investments in
carbon credit projects.
Financial Highlights:
(in thousands of United States Dollars) |
Three months ended |
Three months ended |
|
June 30, 2024 |
June 30, 2023 |
Gains on investments in carbon credit projects |
$ |
10,671 |
|
$ |
111,102 |
|
Total operating expenses |
|
(2,538 |
) |
|
(2,008 |
) |
Operating income for the period |
|
8,133 |
|
|
109,095 |
|
Income tax recovery (expense) |
|
332 |
|
|
(4,824 |
) |
Net income for the period |
|
7,470 |
|
|
104,129 |
|
Basic income per share |
|
0.06 |
|
|
0.85 |
|
Diluted income per share |
$ |
0.06 |
|
$ |
0.85 |
|
(in thousands of United States Dollars) |
June 30, 2024 |
December 31, 2023 |
Cash and cash equivalents |
$ |
7,480 |
$ |
1,401 |
Carbon credit inventory |
|
9,271 |
|
- |
Current investment in carbon credit projects |
|
27,403 |
|
34,813 |
Non-current investment in carbon credit projects |
|
81,396 |
|
102,273 |
Total assets |
$ |
127,224 |
$ |
141,243 |
Vietnam Household Devices Project
Update
Including the payments received during and
subsequent to the most recent quarter, in aggregate to date, Base
Carbon has received a total of approximately $30.0 million from the
contracted sale of carbon credits generated from its Vietnam
project, achieving full payback of the Company’s capital investment
into the project as well as initial capital returns of over $9.0
million.
The Company also expects additional proceeds of
approximately $6.3 million in future payments from the project
off-take arrangement. Beyond carbon credits produced from the
project subject to the off-take sale arrangement, Base Carbon and
its shareholders continue to have the right, but not the
obligation, to purchase all carbon credits produced from the
remaining life of the project, currently anticipated to be
approximately 25 million carbon credits in “phase 2” of the
project, at a predetermined price as further described in the
Company’s second-quarter management’s discussion and analysis
available on the Company’s website at www.basecarbon.com.
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.
Subsequent to the quarter-end, Base Carbon
completed an initial market sale of 20,000 carbon credits,
representing less than 3% of the inventory from this project,
designed as a market-based “test-trade” to ensure commercial
market-based capabilities.
While the Company is currently evaluating all
sales options with respect to the remaining inventory of
approximately 700,000 carbon credits, the Company believes that
maintaining a short-term inventory of the Rwanda project carbon
credits will allow for positive exposure to anticipated price
momentum and liquidity upon eligibility under programs like CORSIA
(Carbon Offsetting and Reduction Scheme for International
Aviation). Further credit production is expected to occur at
regular intervals with transfer of carbon credits to the Company
pursuant to the VERPA with project developer the DelAgua Group.
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 June 30, 2024, Base Carbon has funded 40%
of the committed project capital with approximately 82% of the
planned 6.5 million trees planted to date with the remaining trees
expected to be planted in 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 the implementation of the CORSIA
framework and eligibility of carbon credits thereunder, including
carbon credits generated by the Company’s projects. 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, 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 carbon credit market prices,
(iv) the verification of ongoing project monitoring reports and
issuance of carbon credits by Verra, (v) changes to laws,
regulation or policies in applicable jurisdictions, and (vi) the
Company has sufficient funds on hand to make any required 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, including that of applicable
governmental authorities, 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’s
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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