Resource World Magazine

88 www.resourceworld.com F E B R U A R Y / M A R C H 2 0 2 0 ETRION CORP. [ETX-TSX], based in Geneva, Switzerland and Tokyo, Japan, is an independent power producer that develops, builds, owns and operates util- ity-scale solar power generation plants. Etrion was created as a renewable-energy venture by the well-known Lundin Group, which owns mining assets around the world, including Toronto-based Lundin Mining Corp. [LUN-TSX; LUMI-Sweden] and Denison Mines Corp. [DML-TSX; DNN-NYSE American]. In business for more than three decades, the Lundins identify investment oppor- tunities in the natural resource sector. The company has developed several mines as well as oil and gas fields. The 11 companies operated by the Lundins are actively engaged in exploring, developing and producing oil and gas, gold, copper, cobalt, zinc, lead, silver, nickel, diamonds, uranium, iodine, sulphate and nitrate resources, and operate in more than 25 countries. The Lundin Group is headquar- tered in Vancouver, Canada. Etrion's largest shareholder is the Lundin family which owns approximately 36% of the company's shares directly and through various trusts. Founded by the Lundin Group in 2009, Etrion went public through a reverse takeover of a TSX-listed company in 2009. (Before 2009, the company was Petrofalcon, an oil and gas entity operating in Venezuela) Active in Japan since 2012, the com- pany has built a strong local team and secured partnerships with developers, general contractors and local lenders. All operating solar assets in Japan are secured by a 20-year Power Purchase Agreement with Japanese power utility companies. According to their November 15, 2019 press release, Etrion delivered strong proj- ect-level results from its Japanese assets in the third quarter of 2019. Higher electric- ity production resulted in an increase in revenue and consolidated earnings before EBITDA (interest, taxes, depreciation and amortization) compared to the same period in 2018. Etrion listed among its Q3-19 operational highlights as producing 18.4 million kilowatt-hours (kWh) of electric- ity from the company's 57-megawatt (MW) portfolio comprising 11 solar power plant sites in Japan. The 45 MW Niigata Project in central Japan is approximately 20% complete, with estimated connection to the elec- tricity grid in the fourth quarter of 2021. Etrion also continues to develop a backlog solar power projects in Japan with an esti- mated capacity of 60 MW on a gross basis. The Yokkaichi 60 MW project is subject to litigation with a local developer to enforce compliance with contractual obligations. The Etrion press release lists consoli- dated revenues of US $6.4 million that were 3% higher relative to Q3-18. The solar segment EBITDA of US $5.3 million was 4% higher compared to Q3-18. The company also collected 200 million yen (US $1.8 million) associated with the final payment from the sale of the rights of the 45 MW Kumamoto solar power project and closed the third quarter of 2019 with a cash balance of US $143.9 million, US $18.2 million of which was unrestricted and held at corporate level and working capital of $137.9 million. The company received a VAT reimburse- ment of 300 million yen (US $2.8 million) associated with the Komatsu Project and repaid the outstanding amount of the VAT credit facility for the same amount. On July 1, 2019, Etrion charged the Niigata Project with a net development fee of approximately 600 million yen (US $5.6 million) and anticipated land lease for 459 million yen (US $4.2 million). Marco A. Northland, the company's CEO, commented, "I am pleased to announce a strong quarterly performance compared to the same period of last year. With the 45 MW Niigata Project now fully financed and under construction, we are set to double Etrion's installed capacity in Japan. Work continues on the development side to bring additional projects to our platform in Japan and we remain optimistic of the growth potential this market continues to offer in the near future to us." Etrion recently closed a multistep trans- action to create significant value across its Japanese solar portfolio by acquiring the minority interests of Hitachi High Technologies and Tamagawa Holdings, optimized the related Japanese corporate structure, and renegotiated the operations and maintenance contracts for Etrion's 56.8-megawatt solar portfolio in Japan. Etrion purchased HHT's minority owner- ship in all four of its solar projects, as well as Tamagawa's share in the Misawa 9.5 MW project, for a total of US $4.4-million. As a result, Etrion's net solar capacity increased from 47.0 MW to 56.8 MW. n Etrion reports strong quarterly performance by Jane Foutz The Mito 3 solar field site in Japan. Source: Etrion Corp. GREEN TECHNOLOGIES

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