/NOT FOR DISTRIBUTION TO
- 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") andPeters & Co. Limited ("Peters") engaged as co-financial advisors (the "Advisors")
"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,
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"),
Hanwha, through its Qcells division, is the largest solar panel manufacturer in
Meyer Burger, a large
Heliene, a Canadian based company with operations in
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
The Company has entered into a preliminary construction agreement with the EPC consortium that incorporates a guaranteed maximum cost of
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
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
Appointment of Vice President, Glass Operations and Addition to the Board of Directors
CPS is pleased to announce it has appointed
Additionally, CPS is pleased to announce that
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
The Company is developing manufacturing capacity for ultra high-clarity patterned solar glass through a Company-owned Facility to be located in
Neither the
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 "
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,
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
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