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- Three binding commercial off-take agreements have been
signed representing a minimum of 62% of planned output capacity,
with optionality to increase to 77%
- Multiple memorandums of understanding ("MOU") have been
signed, representing an additional 170% of planned output capacity,
that are expected to convert into commercial off-take agreements
such that the Project (defined below) is 100%
contracted
- Pre-construction engineering and design is complete and a
turn-key EPC agreement has been signed providing capital cost
certainty and operational performance guarantees
- Off-take agreements and fixed cost certainty underpin
attractive project economics (>18% unlevered before-tax
IRR)
- Environmental Act Licence issued by the province of
Manitoba to construct and operate
a patterned solar glass manufacturing facility
- Vice President, Glass Operations appointed and board of
directors enhanced with solar energy industry
expertise
- Formal financing process initiated with Fort Capital
Partners ("Fort") and Peters & Co. Limited ("Peters") engaged
as co-financial advisors (the "Advisors")
CALGARY,
AB, May 11, 2023 /CNW/ - Canadian Premium
Sand Inc. ("CPS" or the "Company") (TSXV: CPS) is
pleased to provide an update regarding its development of
North America's first vertically
integrated patterned solar glass manufacturing facility (the
"Project").
"We are excited to have reached this important stage in the
development of our integrated solar glass manufacturing project.
With strong revenue visibility through binding commercial off-take
agreements and a high degree of certainty with capital costs and
operational performance through our EPC agreement we are confident
in our ability to commercialize this high return Project,
supporting the global energy transition. With our recent additions
of industry expertise to the team, we look forward to a successful
financing process that capitalizes our project and enables the
delivery of our exciting business plan", stated Company President
& CEO, Glenn Leroux.
Commercial Off-take Agreements
The Company has secured firm commercial off-take agreements with
three North American solar panel manufacturers including, Hanwha
Solutions Corporation ("Hanwha"), Heliene Inc.
("Heliene") and Meyer Burger Technology AG ("Meyer
Burger"), for a combined total of 62% of planned output
capacity and an average renewable contract term of over 4 years.
These agreements include options to increase firm off-take volumes
by an additional 15% of planned output capacity to a combined total
of 77%, subject to mutual agreement.
Hanwha, through its Qcells division, is the largest solar
panel manufacturer in North
America and is focused on establishing a comprehensive,
low-carbon, domestic supply chain to support its domestic solar
energy growth strategy. Qcells has announced plans for a total
investment of US$2.66 billion to
expand its existing 1.7 GW of production capacity in Georgia, to 8.4 GW by 2024. The Company's
agreement with Qcells incorporates solar glass volumes that
represent a material proportion of the Company's planned output
capacity.
Meyer Burger, a large
Switzerland-based solar panel
manufacturer, is building a manufacturing facility in Arizona with 2.0 GW of annual production
capacity. In August 2022,
Meyer Burger announced a long-term
agreement for supply of modules to D.E Shaw Renewable Investments,
a large renewable energy project operator in the U.S. Additional
off-take agreements between Meyer
Burger and two other renowned counterparties were announced
in March 2023 and a significant
offtake agreement was signed with Ikea in May 2023.
Heliene, a Canadian based company with operations in
Ontario and Minnesota, is focused on establishing a
domestic solar supply chain to support its growth strategy in
North America. Heliene has
experienced significant growth since starting in 2010 in
Canada and its U.S. operations in
2017 and is currently expanding its manufacturing capacity by 100%
to 2GW.
To further complement these contracted volumes, the Company is
negotiating additional firm off-take agreements with nine other
solar panel manufacturers. The Company has executed MOUs with these
counterparties that represent an additional 170% of total planned
output capacity and expects to convert several of these MOUs into
formal off-take agreements such that 100% of planned output
capacity is contracted to further de-risk the project.
Finalized Engineering and Design
Due to higher-than-expected demand, the Company and its EPC
consortium have designed an 800 tonne per day solar glass
manufacturing facility (the ''Facility''), significantly
larger than the 550 tonne per day facility contemplated in the 2021
FEED study.
The Company's EPC consortium, which includes PCL Constructors
Canada Inc. and Henry F. Teichmann,
Inc., has finalized comprehensive pre-construction designs for the
Facility, which is capable of supplying solar glass to
approximately 6.0 GW per annum of solar panel manufacturing
capacity in North America. The
Facility will be capable of producing a range of patterned solar
glass specifications, including standard 3.2mm thick front-glass
for the residential and commercial rooftop market as well as 2.0 mm
thick glass required for the bifacial utility market.
The Company has entered into a preliminary construction
agreement with the EPC consortium that incorporates a guaranteed
maximum cost of $880 million, which
is inclusive of the silica sand operation and provides for turn-key
project execution, including specific operational and performance
guarantees for the Project. The agreement includes mechanisms to
reduce the guaranteed maximum cost through various means, including
a direct reduction in scope that may result from government
participation. Additionally, the Company is evaluating the
applicability of the Canadian Federal Government's recently
announced 30% refundable Investment Tax Credit for Clean
Manufacturing.
Attractive Project Economics
Highlights of the Project include:
- $300 to $330 million of annual revenue
- $170 to $190 million of annual EBITDA (see "Non-GAAP
Financial Measure")
- Greater than 18% unlevered before-tax IRR (see "Endnote")
CPS expects to be the leading provider of patterned solar glass
to the North American market benefiting from the use of low-cost
renewable hydroelectric energy, proximity to customers, stable
political environment and the integration of the Company's
wholly-owned and exceedingly rare, low-iron silica sand supply.
There are currently only four other known deposits of low-iron
silica sand in North America, the
majority of which have volumes that are committed to third party
architectural glass customers.
Based on the growth profile of the market and the size of the
Company's silica sand resource, CPS sees the potential to increase
glass production by up to 100% through future expansion. By
leveraging investment in common infrastructure, a second phase of
the Project is expected to be financed organically, which would be
accretive to Project economics.
Environmental Act Licence Issued
On May 3, 2023, the province of
Manitoba issued the Company an
Environmental Act Licence to construct and operate its proposed
patterned solar glass manufacturing facility on the site secured in
the City of Selkirk. The receipt
of this licence secures a key regulatory requirement and removes a
critical path item from the development schedule.
Additionally, the successful licence application validates the
Company's plan to construct and operate a solar glass manufacturing
facility with environmental standards that will exceed current
industry standards.
Appointment of Vice President, Glass Operations and Addition
to the Board of Directors
CPS is pleased to announce it has appointed Dana Partridge as Vice President, Glass
Operations. Mr. Partridge brings significant glass
manufacturing experience gained over a 20+ year career across a
variety of roles with Guardian Industries in glass plant
operations. During his time with Guardian Industries, Mr. Partridge
had management oversight of multiple glass production facilities in
the firm's U.S., Latin America and
Asia-Pacific regions and he
managed the construction, commissioning and staffing of a 500 tonne
per day greenfield glass manufacturing facility in Saudi Arabia. Following his career at Guardian
Industries, Dana contributed to the success of a number of
manufacturing companies and is joining CPS from Tacoma Glass
Manufacturing, in Burlington,
Washington. Mr. Partridge's academic credentials include a
BA/BS in Business Management and Geology from Marietta College and a Juris Doctorate from Concord
Law School, earned following his graduation from the U.S.
Naval War College in Newport, RI. Mr. Partridge will be joining the
Company initially as a management consultant pending his relocation
to Canada.
Additionally, CPS is pleased to announce that Theresa Jester has joined the Company's board of
directors. Ms. Jester brings over 40 years of experience as a
corporate executive and board member in solar energy technology,
engineering and hardware manufacturing organizations. During Ms.
Jester's 26-year career at Solar World and its related
predecessors, she managed a 700-employee solar panel manufacturing
division with global operations that exceeded $500 million in revenue. Ms. Jester is currently
the Managing Director for PI Berlin North America, the leading
technical advisor, risk manager and quality assurance provider for
PV equipment. Ms. Jester's experience includes executive roles at
Solaria, and Hudson Energy Partners, a U.S. private equity fund
focused on solar energy technologies. Ms. Jester has also served as
a director at several solar energy-related companies. Ms. Jester
earned a BS in Mechanical Engineering from California State University and was named "Solar
Energy Woman of the Year" 2015 by the American Solar Energy
Society.
Initiation of Formal Financing Process
The Company is pleased to announce the initiation of a formal
process to raise external capital to finance construction of the
Project. The Company has engaged Fort and Peters as co-financial
advisors in connection with this process.
The Company does not intend to provide any updates on the
progress of this initiative until a definitive outcome has been
reached.
About Canadian Premium Sand Inc.
The Company is developing manufacturing capacity for ultra
high-clarity patterned solar glass through a Company-owned Facility
to be located in Selkirk, Manitoba
that utilizes the high-purity, low-iron silica sand from its wholly
owned Wanipigow quarry leases and renewable Manitoba hydroelectricity. The Company is a
reporting issuer in Ontario,
Alberta and British Columbia. Its shares trade on the TSXV
under the symbol "CPS".
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
The securities that may be issued pursuant to the financing
described herein have not been, and will not be, registered under
the United States Securities Act of 1933, as amended (the "U.S.
Securities Act") or any state securities laws and accordingly may
not be offered or sold within the United
States or to "U.S. persons", as such term is defined in
Regulation S promulgated under the U.S. Securities Act ("U.S.
Persons"), except in compliance with the registration requirements
of the U.S. Securities Act and applicable state securities
requirements or pursuant to exemptions therefrom. This press
release does not constitute an offer to sell or a solicitation of
an offer to buy any of the Company's securities to, or for the
account of benefit of, persons in the
United States or U.S. Persons.
Forward-Looking Information
Certain statements contained in this press release constitute
forward-looking statements relating to, without limitation,
expectations, intentions, plans and beliefs, including information
as to the future events, results of operations and the Company's
future performance (both operational and financial) and business
prospects. In certain cases, forward-looking statements can be
identified by the use of words such as "expects", "estimates",
"forecasts", "intends", "anticipates", "believes", "plans",
"seeks", "projects" or variations of such words and phrases, or
state that certain actions, events or results "may" or "will" be
taken, occur or be achieved. Such forward-looking statements
reflect the Company's beliefs, estimates and opinions regarding its
future growth, results of operations, future performance (both
operational and financial), and business prospects and
opportunities at the time such statements are made, and the Company
undertakes no obligation to update forward-looking statements if
these beliefs, estimates and opinions or circumstances should
change. Forward-looking statements are necessarily based upon a
number of estimates and assumptions made by the Company that are
inherently subject to significant business, economic, competitive,
political and social uncertainties and contingencies.
Forward-looking statements are not guarantees of future
performance. In particular, this press release contains
forward-looking statements pertaining, but not limited, to: future
project economics including forecast annual revenue and EBITDA and
IRR levels; the anticipated contracting levels and benefits arising
from firm commercial offtake agreements; the expectation that MOUs
will be converted into firm commercial offtake agreements; the
ability of the Project to support global energy transformation; the
potential availability of government tax incentives; the benefits
to be derived from the management and Board additions; the results
and expectations arising from the formal financing process; the
expectation that CPS will be the leading provider of patterned
solar glass to the North American market benefiting from the use of
low-cost renewable hydroelectric energy, proximity to customers,
stable political environment and the integration of the Company's
wholly-owned and rare, low-iron silica sand supply; the potential
increase in production through future expansion; the expectation
that the second phase of the Project will be financed organically
with the result being that this would be accretive to Project
economics; the statement that the Company does not intend to
provide any updates on the progress of the financing process until
the outcome and the terms have been determined; the expectation
that the Project will provide for strong economic returns for our
current and future shareholders; the other development initiatives
the Company plans to advance; future development plans; industry
activity levels; industry conditions pertaining to the solar glass
manufacturing industry; the ability of and manner by which the
Company expects to meet its capital needs; and the Company's
objectives, strategies and competitive strengths. By their nature,
forward-looking statements involve numerous current assumptions,
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the
Company to differ materially from those anticipated by the Company
and described in the forward-looking statements.
A number of factors, risks and uncertainties could cause
results to differ materially from those anticipated and described
herein including, among others: the effects of competition and
pricing pressures; effects of fluctuations in the price of glass
products and raw materials input costs; risks related to
indebtedness and liquidity, including the Company's capital
requirements; risks related to interest rate fluctuations and
foreign exchange rate fluctuations; changes in general economic,
financial, market and business conditions in the markets in which
the Company operates; the Company's ability to obtain, maintain and
renew required permits, licenses and approvals from regulatory
authorities; the stringent requirements of and potential changes to
applicable legislation, regulations and standards; the ability of
the Company to comply with unexpected costs of government
regulations; liabilities resulting from the Company's operations;
the results of litigation or regulatory proceedings that may be
brought against the Company; uninsured and underinsured losses;
risks related to the transportation of the Company's products,
including potential rail line interruptions or a reduction in rail
car availability; the geographic and customer concentration of the
Company; the ability of the Company to retain and attract qualified
management and staff in the markets in which the Company operates;
labor disputes and work stoppages and risks related to employee
health and safety; general risks associated with the glass
manufacturing and sand quarry industries, loss of markets, consumer
and business spending and borrowing trends; limited, unfavorable,
or a lack of access to capital markets; uncertainties inherent in
estimating quantities of products; processing problems; the use and
suitability of the Company's accounting estimates and judgments;
and the other risk factors outlined in CPS's most recent
Management's Discussion and Analysis which is available on SEDAR at
www.sedar.com. Although the Company has attempted to identify
important factors that could cause actual actions, events or
results to differ materially from those described in its
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. There can be no assurance that forward-looking statements
will materialize or prove to be accurate, as actual results and
future events could differ materially from those anticipated in
such statements. The forward-looking statements contained in this
press release are expressly qualified by this cautionary statement.
Readers should not place undue reliance on forward-looking
statements. These statements speak only as of the date of this
press release. Except as may be required by law, the Company
expressly disclaims any intention or obligation to revise or update
any forward-looking statements or information whether as a result
of new information, future events or otherwise. Any financial
outlook and future-oriented financial information contained in this
press release regarding prospective financial performance,
financial position, cash flows or EBITDA projections are based on
assumptions about future events, including economic conditions and
proposed courses of action based on management's assessment of the
relevant information that is currently available. Projected
operational information and forecast revenue, EBITDA and IRR levels
contains forward-looking information and is based on a number of
material assumptions and factors, as are set out above. These
projections may also be considered to contain future oriented
financial information or a financial outlook. The actual results of
the Company's operations for any period will likely vary from the
amounts set forth in these projections and such variations may be
material. Actual results will vary from projected results. Readers
are cautioned that any such financial outlook and future-oriented
financial information contained herein should not be used for
purposes other than those for which it is disclosed herein. The
forward-looking information and statements contained in this
document speak only as of the date hereof and the Company does not
assume any obligation to publicly update or revise them to reflect
new events or circumstances, except as may be required pursuant to
applicable laws.
Market, Independent Third Party and Industry
Data
Certain market, independent third-party and industry data
contained in this press release is based upon information from
government or other independent industry publications and reports
or based on estimates derived from such publications and reports.
Government and industry publications and reports generally indicate
that they have obtained their information from sources believed to
be reliable, but the Company has not conducted its own independent
verification of such information. This press release also includes
certain data derived from public filings made by independent third
parties. While the Company believes this data to be reliable,
market and industry data is subject to variations and cannot be
verified with complete certainty due to limits on the availability
and reliability of raw data, the voluntary nature of the data
gathering process and other limitations and uncertainties inherent
in any statistical survey. The Company has not independently
verified any of the data from independent third-party sources
referred to in this press release or ascertained the underlying
assumptions relied upon by such sources.
Non-GAAP Financial Measure
In this press release, CPS has used the term "EBTIDA" (a
"Non-GAAP Financial Measure") which is not defined by International
Financial Reporting Standards ("IFRS") but is used by management to
evaluate the performance of CPS and its business. EBITDA is defined
as earnings before interest, taxes, depreciation and amortization.
This measure may also be used by investors, financial institutions
and others to assess CPS's performance and ability to service debt.
Non-GAAP Financial Measures do not have standardized meanings
prescribed by IFRS and are therefore unlikely to be comparable to
similar measures presented by other companies. Securities
regulations require that Non-GAAP Financial Measures are clearly
defined, qualified and reconciled to their most comparable IFRS
financial measures. Except as otherwise indicated, Non-GAAP
Financial Measures are calculated and disclosed on a consistent
basis from period to period. Specific items may only be relevant in
certain periods. The intent of Non-GAAP Financial Measures is to
provide additional useful information to investors and analysts,
and the measures do not have any standardized meaning under IFRS.
The measures should not, therefore, be considered in isolation or
used in substitute for measures of performance prepared in
accordance with IFRS. Other issuers may calculate Non-GAAP
Financial Measures differently. Investors should be cautioned that
EBITDA should not be construed as an alternative to net earnings,
cash flow from operating activities or other measures of financial
results determined in accordance with GAAP as an indicator of CPS's
performance.
Currency
All references to "$" in this press release are to Canadian
dollars, unless otherwise noted.
Endnote
1Internal financial modeling based
on: capital and operating cost details from the pre-construction
engineering and design; current solar glass price data from
Singapore Solar Exchange and PV InfoLink; and logistics quotes for
delivery costs of solar glass to North American locations. Implicit
in forward-looking information in respect of the IRR and EBTIDA
projections contained in this press release are certain current
assumptions, including, among others, that the Company will
continue to execute on its strategy of developing manufacturing
capacity for solar glass, attracting customers and end-users,
realize operational efficiencies from its integrated sand quarry,
and extract procurement and cost synergies on time and on budget.
Additional assumptions include no changes to the current economic
environment, no material changes in interest rates and foreign
exchange rates, procurement, development or supply costs, access to
equity and debt capital and sufficient cash flow for ongoing
operations and the successful outcome of the formal financing
process that has been initiated. These assumptions are based on the
fact that funding for the construction of the facility will be
obtained, the Project will receive final investment decision
approval from the CPS board and the ultimate construction of the
Facility will proceed as scheduled and on budget, markets for solar
glass and access to end markets. See also "Forward-Looking
Information" above.
Information Regarding Counterparties
Certain information contained in this press release relating
to the Company's counterparties which include Hanwha, Heliene,
Meyer Burger and others, and the
nature of their respective businesses is taken from and based
solely upon information published by such issuers. The Company has
not independently verified the accuracy or completeness of any such
information.
SOURCE Canadian Premium Sand Inc.