Mr. Bob Emmott reports

MAXIM POWER CORP. ANNOUNCES 2023 THIRD QUARTER FINANCIAL AND OPERATING RESULTS

Maxim Power Corp. has released financial and operating results for the third quarter and nine months ended Sept. 30, 2023. The unaudited condensed consolidated interim financial statements, accompanying notes, and management's discussion and analysis will be available on SEDAR+ and on Maxim Power's website on Nov. 6, 2023.

Operating results

During the third quarter of 2023, Maxim Power recorded a net loss and negative adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $4.9-million and $1.5-million, respectively, as compared with net income of $24.0-million and positive adjusted EBITDA of $39.7-million, respectively, in the same period of 2022. Net income in the third quarter of 2023 decreased as compared with the same period in 2022 primarily due to lower-generation volumes at Milner 2 as a result of off-line repairs to the air inlet filter house and commissioning work in the third quarter of 2023, partially offset by the approved business interruption claims in 2023, less income tax expense in 2023 and higher unrealized and realized commodity swap losses in 2022. A significant portion of the decrease to adjusted EBITDA was due to the M2 unplanned outage in the third quarter of 2023, partially offset by the approved business interruption claims.

M2 combined cycle gas turbine expansion commissioning

As previously reported, Maxim Power has commissioned the combined cycle gas turbine expansion of M2. Construction of the heat recovery technology required to expand M2 into a CCGT facility commenced in 2021, and the project was originally expected to commission in the fourth quarter of 2022. Commissioning was delayed due to the non-injury fire on Sept. 30, 2022, which caused damage to M2's air inlet filter house. Repairs commenced shortly after and were completed in August of 2023 to allow for the recommencement of commissioning activities. M2 began generating intermittent electricity to the grid on Aug. 14, 2023, and achieved CCGT commercial operations on Oct. 24, 2023.

The CCGT expansion of M2 is expected to increase the maximum generation capacity of the HR Milner site to 300 megawatts and has been designed to lower operations and maintenance costs per megawatt-hour. The CCGT expansion of M2 captures waste heat that would otherwise exhaust into the atmosphere and converts it into useful low-carbon dispatchable electricity for the Alberta power grid. The estimated final project cost of the CCGT expansion of M2 is currently $164-million, excluding borrowing costs and the net effect of $20-million of grant proceeds.

This significant milestone completes the coal to gas energy transformation and repowering project at the Milner site, which saw over $300-million of investment and converted the legacy 150-megawatt coal-fired facility into a 300-megawatt CCGT facility. The CCGT expansion of M2 is expected to reduce the intensity of carbon emissions by more than 60 per cent compared with the legacy coal-fired Milner facility.

Insurance information update

Maxim Power reaffirms coverage for the non-injury fire incident subject to the terms and conditions of the corporation's property insurance policy, including business interruption provisions. As of the date of this press release, Maxim Power has cumulatively submitted claims for $87.0-million, of which $60.5-million relates to business interruption and $26.5-million relates to property damage. As of the date of this press release, $63.0-million has been paid by insurance companies in relation to these claims. Maxim Power anticipates receiving a majority of the amounts claimed, and the primary difference in the amounts claimed and received or recognized is due to timing of the approval by the insurers. Maxim Power has only recognized insurance claims approved by the insurers, and claims pending approval are not recognized in the interim financial statements.

As previously reported, Maxim Power submitted an additional insurance claim for a delay in start-up related to the non-injury fire incident under its course of construction insurance policy, which includes a provision for delay in start-up coverage relating to the CCGT expansion of M2. The corporation has received a denial of coverage under this policy from the insurer and is currently evaluating its options in relation to this claim. No amounts have been recognized by the corporation in relation to this claim.

Normal course issuer bid update

Maxim Power's current normal course issuer bid program allows for the purchase and cancellation of up to 2,526,477 common shares of the corporation with daily purchase limits of 2,296 shares from Aug. 31, 2023, to Aug. 30, 2024. As a result of amendments to the senior credit facilities, due to the non-injury fire incident, the corporation was required to pause purchases under its NCIB until after the CCGT expansion of M2 achieved substantial completion. Now that the CCGT expansion of M2 has achieved this milestone, the corporation intends to resume the purchase and cancellation of shares.

About Maxim Power Corp.

Based in Calgary, Alta., Maxim Power is one of Canada's largest truly independent power producers. Maxim Power is focused entirely on power projects in Alberta. Its core asset -- the 300-megawatt H.R. Milner plant, M2, in Grande Cache, Alta. -- is a state-of-the-art combined cycle gas-fired power plant that commissioned in fourth quarter 2023. Maxim Power 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 Power trades on the Toronto Stock Exchange under the symbol MXG.

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