/NOT FOR DISTRIBUTION IN THE UNITED STATES/
New contracts increase contracted backlog to $6.9 billion and introduce second customer in South Korea
VANCOUVER, July 15, 2019 /CNW/ - Pinnacle Renewable Energy Inc. ("Pinnacle" or the "Company") (TSX: PL) today announced that it has entered into two new long-term, take-or-pay off-take contracts with customers in Japan and South Korea, both being accelerated growth markets for Pinnacle.
The contract in Japan is an extension of an existing contract with Mitsubishi Corporation ("Mitsubishi"), a global integrated business enterprise in Japan. Under the terms of the contract, Pinnacle will supply 110,000 to 120,000 metric tons per annum ("MTPA") of industrial wood pellets to Mitsubishi beginning in 2021.
The contract in South Korea is with GS Global Corporation ("GS"), a large diversified conglomerate in South Korea and the first dedicated biomass independent power producer in that country. Under the terms of the contract, Pinnacle will supply 100,000 MTPA of industrial wood pellets to GS beginning in 2022.
"These new contracts represent the strengthening of our relationship with Mitsubishi and expansion of our business in the Asian market, with the relationship with GS marking our third contract in South Korea," said Rob McCurdy, CEO of Pinnacle. "With the growth of our contracted back-log and diversification of our counterparties, we are continuing to evaluate and develop further opportunities to add incremental production capacity, supported by our recently expanded credit facility."
Japan is a supportive market for renewable energy, targeting 3.7% to 4.6% from biomass or 20 million MTPA in pellet equivalent terms, providing Pinnacle with a compelling opportunity to continue growing in this market. Like Japan, South Korea has also set specific targets for renewable generation, seeking to achieve 10% renewable generation by 2023.
Pinnacle is a rapidly growing industrial wood pellet manufacturer and distributor and the third largest producer in the world. The Company produces sustainable fuel for renewable electricity generation in the form of industrial wood pellets. This fuel is used by large-scale thermal power generators as a greener alternative to produce reliable baseload renewable power. Pinnacle is a trusted supplier to its customers, who require reliable, high-quality fuel supply to maximize utilization of their facilities. Pinnacle takes pride in its industry leading safety practices. The Company operates eight industrial wood pellet production facilities in western Canada and one in Alabama, and owns a port terminal in Prince Rupert, B.C. Pinnacle has entered into long-term take-or-pay contracts with utilities in the U.K., Europe and Asia that represent 102% of its production capacity through 2021 and nearly 107% of its production capacity through 2026.
This news release may contain "forward-looking information" within the meaning of applicable securities laws in Canada. Forward-looking information may relate to Pinnacle's future financial outlook and anticipated events or results and may include information regarding its financial position, business strategy, growth strategies, budgets, operations, financial results, taxes, dividend policy, plans and objectives. Particularly, information regarding the Company's expectations of future results, performance, achievements, prospects or opportunities or the markets in which it operates is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "budget", "scheduled", "estimates", "outlook", "forecasts", "projection", "prospects", "strategy", "intends", "anticipates", "does not anticipate", "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will", "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events or circumstances. If any of the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those expressed in the forward-looking information. The Company has no obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws in Canada. Actual results and the timing of events may differ materially from those anticipated in the forward-looking information as a result of various factors, including those described in "Risk Factors" which are described in the Company's Annual Information Form ("AIF") filed March 27, 2018 on SEDAR.
We caution that the list of risk factors and uncertainties is not exhaustive and other factors could also adversely affect our results. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information. See "Forward-looking Information" and "Risk Factors" in the Company's AIF and Management's Discussion & Analysis for the fiscal year ended December 29, 2017 available on SEDAR (www.sedar.com) for a discussion of the uncertainties, risks and assumptions associated with these statements.
SOURCE Pinnacle Renewable Energy Inc.