CALGARY, Aug. 13, 2012 /CNW/ - Further to a press release dated July 23, 2012, announcing an agreement to acquire a landfill site in northeastern British Columbia, Petrowest Corporation (PRW : TMX) announced today that the acquisition has closed. The assets were acquired by a wholly owned subsidiary of Petrowest Corporation, Petrowest Environmental Services LP, and include a lease for the landfill site, located approximately 108 km north of Fort St. John in northeastern British Columbia, and the permit and environmental assessment certificate required for the landfill's operation. The purchase price of the assets consists of an initial payment of $5 million and subsequent earnout payments of up to $2.5 million on the first 625,000 tons of waste accepted at the landfill. The acquisition is being financed using a combination of cash and debt.
The landfill site is licensed to receive up to 4.5 million tons of contaminated waste. The assets include a major building to receive waste and a series of site improvements required for operations. The cost to build the first landfill cell is estimated to be approximately $700,000. Each cell is expected to be capable of handling approximately 800,000 to 1 million tons of waste. The landfill is expected to be operational within two months.
As part of the transaction, Petrowest has entered into an agreement with the Doig River First Nation to ensure their continued support of the project and to provide members of the First Nation with the opportunity to participate in the direct economic opportunities associated with the landfill. In addition, Petrowest has negotiated a master services agreement with a major Canadian oil and gas company operating in the region to receive their contaminated soil for the next five years, at a fixed rate for the first year. Based on this master services agreement, the presence of significant contaminated sites in the area, the support of the Doig River First Nation and the potential for other customers, annual throughput is estimated to be at least 300,000 tons. Petrowest plans to draw on existing equipment and skills to potentially generate additional revenue relating to loading and hauling contaminated material to the landfill.
Petrowest is an Alberta corporation involved in pre-drilling and post-completion construction services as well as industrial and civil infrastructure projects, gravel crushing and hauling for non-energy sector customers. Petrowest's primary operations are based in the Grande Prairie area of northern Alberta and in northeastern British Columbia.
Forward Looking Information
This news release contains forward looking statements related to the time required for the landfill to be operational, estimated capital costs and the expected capacity of the landfill. These statements are based on current expectations that involve a number of risks and uncertainties which could cause actual results to differ from those anticipated.
SOURCE: Petrowest Corporation
For further information:
Richard Quigley, President and Chief Executive Officer, or Ian Hogg, Vice President, Corporate Affairs, at (780) 830-0881 or [email protected]