Sprott Power Corp. Finalizes Transition Agreement

Payment to Sprott Consulting set at $8.5 million

TORONTO, Feb. 11, 2013 /CNW/ - Sprott Power Corp. (TSX:SPZ) (the "Corporation") a developer, owner and operator of renewable energy projects, announced that following the giving of notice of termination of its Management Services Agreement (the "MSA") with Sprott Power Consulting LP ("Sprott Consulting") it has entered into a transition agreement (the "Transition Agreement") with Sprott Consulting.

The Transition Agreement includes the following:

  • The MSA will terminate on the earlier of July 31, 2013 or completion of any sale of the Corporation resulting from the Strategic Review process.

  • Upon termination of the MSA, the Corporation will pay to Sprott Consulting $8.5 million in full satisfaction of all amounts owing to Sprott Consulting under the MSA and related project management services agreements.

  • In the event of a sale of the Corporation, the Corporation may satisfy the payment in cash or shares depending upon the purchase consideration.  In the event there is no sale, the $8.5 million will be paid by the issuance of shares in the Corporation. The issuance of such shares will be subject to regulatory approval, and will be at a price equal to the greater of $1.05 and the volume weighted average trading price for the 20 trading days prior to issue date.

  • On termination of the MSA or on a sale, employees will be given the option of working for the buyer of the Corporation or receiving severance payments. Mr Jeff Jenner, President and CEO of the Corporation, has agreed to assist the Corporation through the transition period and the Strategic Review Process and has agreed to assist any buyer of the Corporation for a period after closing.  After facilitating the transition, Mr. Jenner will step down as CEO and a director.

"We are glad to continue working with Sprott Consulting and our current team as we move through the Strategic Review and management transition processes" said John Varghese, Chairman of the Corporation. "The Directors and management team are taking all necessary steps to support these objectives as we work toward enhancing shareholder value."

About Sprott Power Corp.

Sprott Power is a publicly-traded (TSX: SPZ) Canadian-based company dedicated to the development, ownership and operation of renewable energy projects. Through project development efforts, acquisitions, partnerships and joint ventures, Sprott Power provides its shareholders with income and growth from the renewable power generation sector of the energy industry. For more information, please access the Company's website at www.sprottpower.com.

Forward-Looking Statements

Certain information contained in this press release may constitute "forward-looking information" which reflects the current expectations of the Corporation, including its ability to complete its co-development agreements and the development of its projects, to effect a smooth transition from outsourced management to internalized in-house management, relations with Sprott Consulting and to carry out the strategic review process and any possible outcomes. This information reflects the Corporation's current expectations with respect to future events and is based on information currently available to the Corporation. Forward-looking information involves significant known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking information including, without limitation, the risks listed under the headings "Risk and Uncertainties" in the Corporation's management's discussion and analysis of financial results for the period ended September 30, 2012 and the risks listed under the heading "Risk Factors" in the Corporation's Annual Information Form dated March 26, 2012 and the successful coordination of the transition process, the willingness of employees to provide ongoing services to the Company, the outcome of the Strategic Review process, the ability of the Company to obtain capital when required and the dilutive effects of any capital raising, and the ability of the Company to close or negotiate purchase transactions for development projects. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking information contained in this release. Although forward-looking information contained in this release is based upon what the Corporation believes to be reasonable assumptions, the Corporation cannot assure investors that actual results, performance or achievements will be consistent with this forward-looking information. The forward-looking information is made as of the date of this release and the Corporation does not assume any obligation to update or revise it to reflect new events or circumstances, except as required by law.

SOURCE: Sprott Power Corp.

For further information:

Jeff Jenner, CA, CBV
President and Chief Executive Officer
Sprott Power Corp.

John Varghese
Chairman of the Board of Directors
Sprott Power Corp.

Profil de l'entreprise

Sprott Power Corp.

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