Run of River Power Inc. (TSXV:ROR), a B.C. hydro power developer, has reached an agreement to buy privately owned Western Biomass Power Corp. in a $2.2 million share swap deal that could help finance development of new green sources of electricity in British Columbia.
Run of River will issue nearly 3.8 million shares, worth 57 cents each in today’s stock trading on the TSX Venture Exchange.
Western Biomass was formed to produce power and dispose of the large biomass inventory of dead trees created by the mountain pine beetle epidemic which has devastated vast areas of pine forest in the interior of British Columbia.
The transaction is a related party deal since 24.2 per cent of Western Biomass is owned by Michael Sweatman, the CFO of Run of River, and Richard Hopp, a director of the company.
Western Biomass plans to build wood-fired plants using pine beetle-killed trees as well as logging and mill wastes. The first of these projects is expected to be a joint venture plant in the traditional territories of the first nations which make up the Tsilhqot’in National Government west of Williams Lake, B.C.
BC Hydro plans to expand its purchase of biomass generated power.
“We recognized that a strong financial partner was necessary to bring these projects to fruition and Run of River has been very successful in raising over $30 million of debt and equity over the past two years,” said T.J. Grewal, president of Western Biomass.
Run of River is developing 10 hydroelectric projects near Vancouver, with 193 megawatts of capacity. It also operates a hydroelectric power station at Brandywine Creek, near Whistler, B.C. The plant provides power to more than 4,000 homes annually through a long-term 20 year contract with BC Hydro.
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