— The formal submission of the project proposal, on November 24, 2008, into BC Hydro’s Clean Power Call. The 396 MW wind power project will harness the power of the strong winds in Hecate Strait using up to 110 wind turbines installed several kilometres off the eastern shore of Haida Gwaii (formerly the Queen Charlotte Islands).
The project will produce enough clean, renewable power to meet the electricity needs of 130,000 B.C. homes, and will also help the province meet its goals for the reduction of greenhouse gas emissions and electricity self-sufficiency. In addition to creating a wide variety of local jobs, the project will support economic development on Haida Gwaii and eliminate the islands’ reliance on diesel generators for electricity.
— The signing of a limited partnership agreement, on January 29, 2009, between NaiKun Wind subsidiary NaiKun Wind Operating Inc. and the Council of the Haida Nation to create an equal partnership which will operate and maintain the project after construction. The comprehensive limited partnership agreement provides for extensive benefits to the Haida Nation, including a revenue stream from the partnership, environmental stewardship, and employment and economic development opportunities. The agreement formalizes the relationship between the Haida Nation and NaiKun Wind which has been ongoing since 2002, and builds on an earlier agreement signed by the two parties in May 2007.
— The acceptance, on May 20, by the British Columbia Environmental Assessment Office of NaiKun Wind’s application for an Environmental Assessment Certificate, which led to the granting of a provincial Environmental Assessment Certificate on December 10, 2009. The issuance of the Certificate marks the culmination of over six years of extensive environmental studies, analysis and community consultation.
The federal government’s decision on the environmental assessment application is expected in early 2010. The Haida Nation has also undertaken an environmental assessment of the project. The NaiKun Wind project is one of only a handful of projects in the Clean Power Call to have been granted a provincial Environmental Assessment Certificate.
— The signing of a Memorandum of Understanding (MOU), on August 13, with the Haida Enterprise Corporation (HaiCo), acting on behalf of the Haida Nation. The MOU provides HaiCo with the opportunity to acquire up to 40 per cent of the wind energy project. The acquisition is consistent with the original objective of bringing in a strategic equity partner that can contribute to the success of the project. The Haida Nation is currently evaluating the opportunity and seeking the support of the federal government for the proposed ownership position.
As at September 30, 2009, NaiKun Wind had $14.29 million in cash and cash equivalents, compared to $27.94 million at the end of September 2008.
During the year ended September 30, 2009, NaiKun Wind incurred a net loss of $11.77 million ($0.30 net loss per share), compared to a net loss of $12.80 million ($0.35 net loss per share) for the year ended September 30, 2008.
The Company’s financial statements include a restatement for prior year comparative figures relating to the accounting for the tax implication of renunciated flow-through share expenditures and the timing of the associated interest charges. This restatement is disclosed in the notes to the Company’s financial statements. On the comparative figures as at September 30, 2009, the restatement results in a decrease to the future income tax liability of $4.0 million, an increase in accounts payable and accrued liabilities of $0.2 million, and a decrease in deficit of $3.8 million, as compared to amounts previously reported. This restatement also results in the recording of a future income tax recovery of $3.5 million and an interest expense of $0.2 million for the year ended September 30, 2008. KPMG LLP has audited NaiKun Wind’s consolidated balance sheet as at September 30, 2009 and the consolidated statements of loss, comprehensive loss, and deficit and cash flows for the year then ended and issued an unreserved opinion on these financial statements. In addition, KPMG LLP has audited the adjustments resulting from the restatement and find that the adjustments in all material aspects are appropriate and properly applied.
In the new fiscal year key milestones for NaiKun Wind include the issuance of Electricity Purchase Agreements by BC Hydro under the Clean Power Call, the finalization of arrangements with equity partners, and the finalization of the project financing plan.
NaiKun Wind Energy Group Inc. (TSX VENTURE: NKW) is a B.C.-based renewable energy company that is traded on the TSX Venture Exchange.
