Mr. Bob Emmott reports

MAXIM POWER CORP. PROVIDES UPDATE ON INSURANCE INFORMATION

Maxim Power Corp. has provided an update on insurance information related to the non-injury fire incident that occurred on Sept. 30, 2022, at the Milner 2 (M2) facility.

Insurance information update

As previously reported, Maxim reaffirms insurance coverage for the incident, subject to the terms and conditions of the corporation's property insurance (PI) policy, including business interruption (BI) provisions. The corporation continues to successfully progress an insurance claim for property damage and lost earnings under the PI policy. The PI policy provides $200-million in total coverage, including BI. The PI insurance coverage related to the property damage from the incident is subject to a customary deductible. The sublimitations on the BI provision of the PI policy include a 45-day deductible, a monthly cap of $5.5-million gross margin (plus a monthly margin allowance ranging from 10 per cent to 15 per cent) and a policy cap of $66-million total gross margin. The corporation is comfortable that the PI policy limit of $200-million, less any coverage related to the BI provision, is sufficient to cover the property damage related to the incident.

To date under the PI policy, Maxim has submitted claims for $66.4-million, of which $48.4-million relates to BI and $18.0-million relates to property damage. To date, Maxim has received $40.2-million in payments from insurance companies in relation to these claims. The corporation continues to progress the insurance claims for damages and future lost earnings.

As previously reported, Maxim submitted an additional insurance claim for a delay in start-up related to the incident under its course of construction (COC) insurance policy, which includes a provision for delay in start-up (DSU) coverage relating to the Milner 2 Expansion project. The corporation has received a denial of coverage under this policy and is currently evaluating its options in relation to this claim. The COC policy continues to remain in effect during the construction and commissioning of the Milner 2 Expansion project.

About Maxim Power Corp.

Based in Calgary, Alta., Maxim is one of Canada's largest truly independent power producers. Maxim is now focused entirely on power projects in Alberta. Its core asset -- the 204-megawatt H.R. Milner plant, M2, in Grande Cache, Alta. -- is a state-of-the-art natural-gas-fired power plant that commissioned in Q2 2020. Maxim is currently increasing the capacity of M2 to approximately 300 MW and concurrently will realize an improvement in the efficiency of the plant by investing in heat recovery combined cycle technology. In addition, Maxim continues to explore additional development options in Alberta including its currently permitted gas-fired generation projects and the permitting of its wind power generation project. Maxim trades on the Toronto Stock Exchange under the symbol MXG.

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