Axy 7 July


Published on

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Axy 7 July

  2. 2. Forward-Looking Information This Presentation contains certain “forward-looking information” within the meaning of Canadian securities laws, which may include, but is not limited to, statements with respect to future events or future performance, management’s expectations regarding Alterra’s production capacity, results of operations, cash flows, revenues and requirements for capital, future demand for and prices of electricity, and Alterra’s business prospects and opportunities. These statements reflect the current views of Alterra with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by Alterra, are inherently subject to significant business, economic, political and social uncertainties and contingencies. Many factors, both known and unknown, could cause Alterra’s actual results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements contained in this presentation, and Alterra has made assumptions based on or related to many of these factors. Such factors include, without limitation: fluctuations in currency markets (particularly with respect to the Icelandic krona, the U.S. dollar and Canadian dollar); risks related to the technological and operational nature of Alterra’s business; changes in national or regional governments, legislation, regulation, permitting or taxation; political or economic developments in Canada, the United States, Iceland or other countries where Alterra may carry on business; risks and hazards associated with the business of renewable energy generation; risks relating to the creditworthiness and financial condition of suppliers and other parties which Alterra will deal with; inadequate insurance or inability to obtain insurance to cover these risks and hazards; employee relations; relationships with and claims by local communities and First Nations; availability and costs of equipment and labour; litigation; the success and timely completion of planned expansion and development programs; the growth rate in net electricity consumption; support and demand for renewable energy; government initiatives to support the development of renewable energy generation; the reliability of technical data and capital expenditure estimates; and availability of capital to fund development and expansion programs. Forward-looking information and statements are also based upon the assumption that none of the identified risk factors that could cause actual results to differ materially from the forward- looking information and statements will occur. Although Alterra has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. There can be no assurance that the forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, prospective investors should not place undue reliance on forward-looking information. Other than as required by applicable securities laws, Alterra does not assume any obligation to update or revise such forward-looking information to reflect new events or circumstances.2
  3. 3. Alterra Power Corp - HIGHLIGHTS Magma Energy (founded 2008) acquired Plutonic Power in May 2011; name changed to ALTERRA POWER CORP. Pure play clean energy company: geothermal, wind, hydro and solar assets 3 year growth metrics Revenue EBITDA MW Capacity Power Production $120 Millions USD $70 400 2,000 $60 Millions USD $100 $50 300 1,500 $80 $40 GWh MW $60 $30 200 1,000 $40 $20 $10 100 500 $20 $- $- $(10) 0 0 Jul/08 - 2010 2011e Jul/08 - 2010 2011e Jul/08 - 2010 2011e Jul/08 - 2010 2011e Dec/09 Dec/09 Dec/09 Dec/09 Organic growth prospects could drive capacity > 800 MW by 2016 395 MW Geothermal 62 MW Hydro 80 MW Wind 5 MW Solar 542 MW Value proposition – strong production growth, unrivaled development pipeline, world class geothermal discovery prospects, exceptional operating, finance and development teams (1) 2009/2010 reflects Alterra’s equity portion in HS Orka3 (2) 2011 Estimate based on future Aluminum prices, water flows and wind
  4. 4. Alterra Power - A Leading Renewable Power Producer May 2011 • Magma Energy + Plutonic Power = Alterra Power Improved Scale Geographic Diversification  Larger production base  Iceland, Canada, United States, Chile , Peru and Italy  Expanded growth pipeline and growth potential Diverse Generation Base Lower Cost of Capital Geothermal, Hydro, Wind, Solar  Larger scale and enhanced liquidity  Enhanced buy-side interest Enhanced Operations  Complementary talent pool  Organizational synergies (overheads, industry expertise, etc.) of ~$2.2MM  Optimization of partner relationships4
  5. 5. Balanced Portfolio - Global Exploration & Operations ICELAND:  2 geothermal power plants with 175 MW capacity (75% Alterra)  Additional 130 MW of defined expansion plans  80 MW of expansions underway WESTERN CANADA:  Toba-Montrose hydro plants with 236 MW capacity (40% Alterra)  Dokie wind farm with 144 MW capacity (51% Alterra)  Further 380 MW of defined expansion plans WESTERN USA:  16 MW geothermal power plant with expansion potential  Excellent government support for geothermal projects  12 other early stage properties CHILE  Very large (320 MW) inferred resource discovered at low cost  Emerging renewable power markets with world-class potential  Strong government support for geothermal projects  Active exploration concessions covering in excess of 158,000 ha FURTHER GROWTH ASSETS IN ONTARIO, ITALY AND PERU5
  6. 6. Assets & Pipeline (Net Alterra Ownership) Net Project Technology Capacity Operating (2011) Soda Lake 16 MW Geothermal Svartsengi 56 MW Geothermal Reykjanes 75 MW Geothermal Toba Montrose 94 MW Hydro Dokie 1 73 MW Wind Capacity 315 MW Annual Net ~1,575 GWH Generation Operating Additions (2016) Upper Toba 62 MW Hydro Ontario Solar 5 MW Solar Reykjanes Expansion 60 MW Geothermal Dokie Expansion 80 MW Wind McCoy 15 MW Geothermal Mariposa 50 MW Geothermal Eldvorp 38 MW Geothermal Other (e.g. Chile, Iceland) 200 MW Geothermal Pipeline Total 510 MW Total Capacity 825 MW6
  7. 7. Outstanding Developer Track Record Successful developer track record across renewable technologies  Proven ability to develop and deliver large new assets at greenfield locations  Development teams from all these projects remain substantially intact Recent project successes Wind Dokie 144 MW 2011 COD Hydro Toba Montrose 236 MW 2010 COD Geothermal Reykjanes 100 MW 2006 COD Near term organic growth - all near existing operations Wind Dokie II 156 MW COD 2014E Hydro Upper Toba 124 MW COD 2015E Geothermal Reykjanes 3/4 80 MW COD 2013-14E7
  8. 8. Overview - Svartsengi and Reykjanes in Iceland Alterra’s 75% - owned subsidiary HS Orka owns two geothermal power plants in southwestern Iceland Facilities  Svartsengi and Reykjanes  Electricity production 175 MW Capacity  Thermal (hot water) production 150 MW th  75% - Alterra Ownership  25% - Jarovarmi (Icelandic Pension Funds) COD  1978 for Svartsengi and 2006 for Reykjanes  Four PPAs with terms expiring from 2011 to 2026, for total Power Purchase 1,082 GWh/ year; additional power sold on one-year contracts Agreements  46% of power sales paid in USD and linked to aluminum price  $170MM total company debt with average 9 years to maturity Project Debt and average 2.645% effective current interest rate Revenue  2011E project revenue of $64MM EBITDA  2011E project EBITDA of $26-$28 MM8
  9. 9. Overview - Soda Lake in Nevada Alterra owns a 23 MW geothermal power plant near Fallon in northern Nevada Facilities  Soda Lake 1 and Soda Lake 2 Capacity  23 MW, currently operating at 16 MW gross Ownership  100% - Alterra COD  1987 & 1991 Power Purchase  Two 30-year PPAs with NV Energy for total 84 GWh Agreement Project Debt  None Revenue  2011E project revenue of $5MM EBITDA  2011E project EBITDA of ~$1MM9
  10. 10. Overview - Toba Montrose Project in B.C. Alterra owns a 40% economic interest in two recently completed run-of-river hydroelectric generation facilities in southwestern British Columbia Facilities  East Toba River and Montrose Creek Capacity  236MW  60% - GE Ownership  40% - Alterra COD  2010 Electricity Purchase  35-year EPA with BC Hydro (710-730 GWh / year) Agreement  $470MM total project debt with 35 year amortization and 6.4% Project Debt effective interest rate  2011E project revenue of $74MM Revenue • Includes $10/MWh ecoEnergy Program incentive  2011E project EBITDA of ~$60MM EBITDA • ~$24MM net EBITDA to Alterra10
  11. 11. Overview - Dokie Wind Project in B.C. Alterra owns a 51% economic interest in the recently completed Dokie Wind Farm, located in northern British Columbia Facilities  Dokie Wind Farm Capacity  144MW  51% - Alterra Ownership  49% - GE COD  March 2, 2011 Electricity Purchase  25-year EPA with BC Hydro (320-340 GWh / year) Agreement  $175MM total project debt with 20 year amortization and 7.2% Project Debt effective interest rate  Annual project revenue of $35 - $40MM Revenue • Includes $10/MWh ecoEnergy Program incentive  Annual project EBITDA of ~$27MM EBITDA • ~$14MM net EBITDA to Alterra  Alterra and GE own rights to expand the Dokie Wind Farm, subject to feasibility confirmation and a successful EPA negotiation with BC Hydro Expansion  Wind assessment, turbine layout, infrastructure and financial studies currently ongoing11
  12. 12. Overview - Option on ABW Solar in Ontario Alterra has an option to acquire a 10% interest in a portfolio of solar facilities from First Solar, to be built in Ontario Facility  3 solar facilities in southwestern Ontario  Amherstburg - 10MW Capacity  Belmont – 20MW  Walpole – 20MW Proposed  90% - GE Ownership  10% - Alterra  Late 2011 – early 2012 COD  Construction to start in 2011 Electricity Purchase  20 year EPA with Ontario Power Authority Agreement Project Debt  TBD EBITDA  ~$3MM net annual EBITDA to Alterra12
  13. 13. Leading Growth Profile Alterra has one of Canada’s largest clean energy development pipelines 900 6,000 800 154 5,000 700 600 156 4,000 154 Net MW 500 GWh 3,000 400 154 156 300 74 2,000 74 74 94 94 510 94 200 94 94 310 1,000 100 191 185 222 147 147 0 0 2010 2011 2012 2013 2014 2015 2016 GEOTHERMAL HYDRO WIND SOLAR Existing Capacity Additions Generation Soda Lake Reykjanes 3 Reykjanes 4 Eldvorp Pipeline HS Orka Nevada Maule Toba Montrose Upper Toba Dokie 1 Dokie 2 ABW Solar13
  14. 14. Overview - Production Expansions in Iceland Potential to expand from 175 MW to 405 MW  PPA discussions with Nordural and others on-going  Future PPA’s with smelters and/or other power off-takers will impact HS Orka’s on-going sensitivity to aluminum prices  50 MW phase expansion commenced; as of Mar 2011 $47 MM already invested  Next 30 MW phase requires no additional drilling  CapEx for full 230 MW expansion is estimated at $642 MM; will be staged  Ownership - 75% Alterra / 25% Jarovarmi (Icelandic pension funds) CONCEPTUAL PRODUCTION GROWTH EXPANSION BUDGET Reykjanes 3 $131 MM Reykjanes 4 $ 66 MM Krýsuvik 1 $ 155 MM Krýsuvik 2 $ 145 MM Eldvörp $ 145 MM14
  15. 15. Q3 2011 Operating and Financial Highlights Alterra gained control of HS Orka in Q1, full consolidation of results occurred in Q2. Results exclude effect of Plutonic acquisition completed May 17, 2011. ACTUAL Expressed in thousands of US dollars, except for MWh and per share amounts Year End 2011-Q3 2011- 9 months June 30-2010 NET PRODUCTION (GWh) 347.4 1,024.6 61.9 TOTAL REVENUE 18,748 45,543 5,056 GROSS PROFIT 5,187 11,482 625 EBITDA (1) 5,155 17,249 (3,261) TOTAL ASSETS 676,681 676,681 198,703 TOTAL LIABILITIES 436,842 436,842 56,633 (1) EBITDA is defined by the Company as earnings before interest and other financing costs, taxes, depreciation and amortization, as well as before deductions for non-cash charges related to employee compensation, equity earnings/losses, loss on re-measurement of equity interest, gain on bargain purchase and changes to the balance sheet carrying value of long-term debt and derivatives. The Company discloses EBITDA as it is a measure used by analysts and by management to evaluate the Companys performance. As EBITDA is a non-GAAP measure, it may not be comparable to EBITDA calculated by others. In addition, as EBITDA is not a substitute for net earnings, readers should consider net earnings in evaluating the Companys performance.15
  16. 16. Growing Financial Strength REVENUE $120 $100 Millions USD $80 $60 $40 $20 $- (1) (2) Jul/08 - Dec/09 2010 2011e $70 EBITDA $60 $50 Millions USD $40 $30 $20 $10 $- $(10) (1) (2) Jul/08 - Dec/09 2010 2011e (1) 2009/2010 reflects Alterra’s equity portion in HS Orka16 (2) Estimate based on future Aluminum prices, water flows and wind
  17. 17. Analyst Coverage and Capital Structure C APITAL S TRUCTURE: CONSOLIDATED PRO- FORMAMARKET CAPITALIZATION (30 JUNE 2011) C$ 330 MMCASH (JUNE 2011) US$ 36 MM+ NET FROM HS ORKA DEAL* (JUNE 2011) US$ 35 MMTOTAL ASSETS (DEC 2010) US$ 1,194 MMLONG TERM DEBT (DEC 2010) US$ 557 MM* NET PROCEEDS FROM SALE OF 25% AND PURCHASE OF 1.5% INTEREST IN HS ORKAFIRM CONTACT EMAILCanaccord Genuity Jared Alexander jalexander@canaccordgenuity.comCormark Securities MacMurray Whale mwhale@cormark.comJacob Securities John McIlveen jmcilveen@jacobsecurities.comMackie Research Capital Matthew Gowing matthew.gowing@researchcapital.comMirabaud Securities Gus Hochschild Bank Financial Jeremy Mersereau jeremy.mersereau@nbfinancial.comPritchard Capital Partners Veny Aleksandrov valeksandrov@pritchardcapital.comRaymond James Securities Steven Li Partners Mike Plaster mplaster@salmanpartners.comWellington West Capital Mgmt Sean Peasgood speasgood@wwcm.comINDEX COVERAGEArdour Global Alternative Energy IndexS&P/TSX Clean Technology IndexRENIXX Renewable Energy Industrial Index17
  18. 18. Senior Management Outstanding development, financial and operations expertise Ross Beaty: Executive Chairman & CEO Geologist and resource company entrepreneur with 40 years experience in the international minerals industry. In early 2008, Mr. Beaty founded Magma Energy Corp to focus on international geothermal energy development. In 2011 Magma and Plutonic Power merged to create Alterra Power. Mr. Beaty is the Director of the Nature Trust B.C. and patron of the Beaty Biodiversity Center at the University of B.C. Recipient of numerous awards, including the prestigious Viola Macmillan Award. Donald McInnes: Executive Vice-Chairman Mr. McInnes was the founder, Vice Chair and CEO of Plutonic Power Corp. He currently serves as Vice Chair of the Clean Energy Association of British Columbia and is a director of Prostate Cancer Canada, the Powell River Economic Development Society, the Duke of Edinburghs Award-British Columbia and Yukon Division and is a Governor of the British Columbia Business Council. John Carson: Executive Vice President Mr. Carson is a highly experienced renewable energy business leader with a core expertise in structuring and leading financial transactions. His financing experience includes senior positions held with GE Energy Financial Services, Terra-Gen Power and Noble Environmental Power, and he has closed over US$2 billion of transactions, primarily in the renewable energy space, including geothermal, wind and hydro transactions. Bruce Ripley: Chief Operating Officer Mr. Ripley has 30 years of engineering experience in the hydroelectric and heavy civil industries, including 16 years with BC Hydro where he was Vice President of Engineering. He overseas all technical and commercial work for the Toba Montrose and Dokie Partnerships. He has worked on development, design, construction, operations and maintenance projects in Canada, USA, China, Philippines and Australia. Peter Wong: Chief Financial Officer Mr. Wong joined the Company in 2005; over the last 18 years he has held a number of progressive senior financial management positions with publicly listed mining and technology companies at the venture, development and operational stages. Mr. Wong articled with the accounting firm of Deloitte and Touche and obtained his CA designation in 1992. He is a current member of the Institute of Chartered Accountants of BC and holds a B.Comm. from the University of B.C.18
  19. 19. Board of DirectorsRoss Beaty  Mr. Beaty is a geologist and resource company entrepreneur with more than 40 years of experience in the international minerals industry, Founder and chair of Magma Energy Corp and Pan American Silver (TSX: PAA, NASDAQ: PAAS) andExecutive Chairman and several other resource companies that were successfully built and divested.CEODonald A. McInnes  Mr. McInnes was the Founder, Vice Chair and CEO of Plutonic Power Corporation. He currently serves as Vice Chair of the Clean Energy Association of British Columbia and is a director of Prostate Cancer Canada, the Powell River EconomicExecutive Vice-Chairman Development Society, the Duke of Edinburghs Award-British Columbia and Yukon Division and is a Governor of the British Columbia Business Council.David Cornhill  Mr. Cornhill is the founder, Chairman and Chief Executive Officer of AltaGas Income Trust, one of Canadas largest energy infrastructure groups, focused on gas and power infrastructure and renewable energy (wind and hydro). With more than 25Director years of experience in the energy industry, Mr. Cornhill also sits on several private and public boards including AltaGas Utility Group and Ivey Business School.David O’Brien  Mr. OBrien is retired as President and Chief Executive Officer, Toronto Hydro Corporation where he served between 2004- 2009. Mr. OBrien was previously with Ontarios Ministry of Energy initially as Associate Deputy Minister of Energy andDirector subsequently Deputy Minister. Mr. OBrien has also served as President and Chief Executive Officer of Enersource Corporation, the parent company of Hydro Mississauga. Mr. OBrien is a member of the Board of OMERS, Apex Co-Vantage and the Summerhill Group, as well as a strategic advisor on energy matters to a number of other companies.Donald Shumka  Mr. Shumka is Managing Director of Walden Management Ltd., a financial consulting firm. Mr. Shumka received a Master of Business Administration from Harvard University. From 1966 to 1979 he worked in a variety of positions in the forest industry,Director from 1979 to 1989 he was Vice President and Chief Financial Officer of West Fraser Timber Co. Ltd. and from 1989 to 2004 he headed the Forest Products Group for two Canadian investment banks. Other public company boards include Eldorado Gold Corp and Paladin Energy Ltd.Paul Sweeney  Mr. Sweeney has over 30 years experience in financial management of mining and renewable energy companies. From 2007-2010, he was Executive Vice-President, Corporate Development, of Plutonic Power Corporation. He has served asDirector CFO of a number of successful mineral resource companies including Canico Resources, Sutton Resources and Gibraltar Mines and is a Director of several resource companies including Magma Energy Corp. and Pan American Silver Corp. where he chairs the audit committee.Walter Segsworth  Mr. Segsworth recently served as Chairman of Plutonic Power Corporation. He is past President and Director of Westmin Resources. Upon the takeover of Westmin by Boliden in 1998, Mr. Segsworth joined Homestake Mining Company ofDirector California where he was subsequently appointed President, Director and Chief Operating Officer and served until the merger with Barrick in early 2002. He is past Chairman of both the Mining Associations of BC and Canada and was named BCs Mining Person of the year in 1996.19
  20. 20. Value Proposition Summary / Next MilestonesVALUE PROPOSITION Core Producing Assets - long term, stable cash flow Diversified Assets - by geography & generation type Larger Size - better liquidity, lower cost of capital Outstanding Project Pipeline - geothermal, hydro, wind assets could triple output by 2016 Exceptional operating, financial and development teamsNEXT MILESTONES Completion of Icelandic Pension Funds Deal for $67mm Iceland PPA and financing for next 130 MW expansion Chile partner financing and next phase of drilling at Mariposa Exploration of new Peruvian and Italian concessions Continuing expansion at Soda Lake and US assets Advancement of Dokie II and Upper Toba projects Ongoing M&A opportunities20
  21. 21. TSX : AXY21JULY 2011