MAXIM anticipates reporting favorable results during the second quarter of 2013 compared to the same quarter in 2012. Milner has benefited from higher average Alberta power prices of $137.66/MWh in April 2013 and $266.06/MWh in May to May 12, 2013, compared to $41.69 and $21.68 for the respective periods in 2012. During this period, certain Alberta power plants experienced outages which combined with provincial tie line outages as well as lower wind generation lead to tighter reserve margins and correspondingly higher power prices.
UNITED STATES AND FRANCE ASSETS
During the fourth quarter of 2012, MAXIM appointed financial advisors to review the Corporation's investments in the United States and France in order to identify options to maximize shareholder value. The evaluation of these initiatives is ongoing.
ALBERTA UTILITIES COMMISSION ("AUC") LOSS FACTOR DECISION
In April 2013, the AUC decided to undertake a review of Decision 2012-104, regarding the ISO Transmission Loss Factor Rule and Loss Factor Methodology. This decision was made based on other review applicants demonstrating substantial doubt as to the correctness of the initial Decision 2012-104. MAXIM will have to file evidence in the second and third quarter of 2013, followed by an oral hearing date to be scheduled for the fourth quarter of 2013. The Corporation anticipates that these ongoing proceedings will have a positive impact on MAXIM by establishing compensation payable to MAXIM.
Summit Coal Limited Partnership ("SUMMIT") Mine 14 Project
SUMMIT's Mine 14 project, which is located north of Grande Cache, Alberta has current estimates of 18.9 million tonnes of low-mid volatile metallurgical coal reserves with a mine life of 17 years based on the updated NI 43-101 Technical Report filed on SEDAR on March 21, 2013. SUMMIT's Mine 16S project is located 30 kilometers northwest of the Mine 14 leases and represents 1,792 hectares or 29% of SUMMIT's total area of leases. An NI 43-101 Technical Report has not been prepared for the Mine 16S property.
In the second quarter of 2013, SUMMIT anticipates receiving approvals to construct and operate a coal beneficiation plant as well as an ERCB mine license amendment to increase annual coal production. SUMMIT has previously secured ten years of terminal capacity with Ridley Terminals Inc. and firm 2014 delivery dates for critical mining equipment.
The Corporation considers the advancement of the M14 and M16S development projects strategic for MAXIM in part because of the value of metallurgical coal and in part due to Milner's ability to utilize tailings and lower quality fuels, which are by-products of the beneficiation of coal, to produce electricity.
Deerland Peaking Station ("D1")
MAXIM is actively pursuing commercial arrangements that will allow for the construction of the 190 MW D1 Station to commence during 2013. The D1 site is located near Bruderheim in Alberta's Industrial Heartland adjacent to the existing Deerland high voltage substation. D1 has received all regulatory approvals and MAXIM has entered into an agreement to secure firm natural gas transportation services. D1 is the only permitted peaking development project in the province of Alberta as at the date of this press release.
D1 is an attractive project as Alberta is experiencing tighter supply demand fundamentals and increasingly volatile electricity prices. Demand for electricity is increasing, base load supply is expected to contract through retirement of coal-fired units and wind power is intermittent. MAXIM expects that peaking requirements across Alberta will continue to grow as a result of these market drivers.
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