RE: RE: FVR update Don't figure in cash from last two BC projects.
At December 31, 2012, the Company determined that indicators of impairment existed with respect
to the recoverability of amounts capitalized to project development costs for the Company’s
Wildmare and Bullmoose Wind Energy Projects. In the latter part of 2012, the Company, along with
its financial adviser, entertained offers and proposals to sell the BC Projects but was unable to
complete the sale of either the Wildmare or Bullmoose projects. In addition, as of April 22, 2013, BC
Hydro was entitled to exercise its buyer termination rights, and the projects are thus at risk. For both
projects, the potential loss of the EPA removes probable future revenue, which is a key criteria
required for capitalizing project costs. The Company concluded that there is impairment in the value
of these two projects and all deferred project development and equipment costs were written down
as at December 31, 2012. Included in the impairment charge are provisions of $1,050,000 for the
estimated costs BC Hydro incurred in respect of Wildmare interconnection work, and $175,000 and
$250,000 for estimated BC Hydro charges pursuant to the Bullmoose and Wildmare EPAs
respectively.
The total project impairment charge is comprised of the following:
Wildmare
Project
Bullmoose
Project Total
Project development costs $ 7,064,396 $ 1,211,471 $ 8,275,867
Met tower equipment (note 6) 220,365 - 220,365
Total $ 7,284,761 $1,211,471 $ 8,496,232
The Company plans to retain its licenses and permits for both the Wildmare and Bullmoose Projects
in the event that additional energy supply is required sooner than BC Hydro currently anticipates. The
projects will be maintained, and wind site data will continue to be collected. All costs incurred on
these projects subsequent to December 31, 2012 will be expensed as incurred.