A week after Vancouver-based Run of River Power (TSX:V.ROR
, Stock Forum
) announced it could find itself forfeiting its share of the Skookum Creek Power Project after significant cost over-runs
in its construction, the hemorrhaging microcap watched another third of its share price disappear on heavy trading Thursday.
The company has lost 75% of its share price since January 1. At the close of trading, the company sat at $0.02, with 100.7 million shares outstanding.
No news preceded the Thursday drop, but existing revenue for the company is small, debentures are being amended to protect cash in hand, and the last reported cash position for the company pegged cash in hand at $1.1m (in September 30, 2013), with more financing required
In a November news release, the company said it “will need to raise capital to support its administrative obligations, pursue development of its other early stage projects as well as for the redemption of the 10% convertible debentures, should they not be converted into shares of the Company and for the redemption of the subordinated secured debentures which come due in January 2014.”
In April 2013, the company boasted that it was “on time and on budget
”, expecting up to 50% of the equity in the project that had been acquired by Concord Pacific Green Energy. That share is, in all likelihood, gone.
According to a news release last week, “A total cost over-run of $12.8M is anticipated […] on the Skookum Creek Power Project, representing $10.9M in cost over-runs to-date and a further estimated $1.9M in additional cost over-runs. If the Cost Over-run becomes final and further to the Company's Management Discussion and Analysis for the quarter ended September 30, 2013, the Company's acquirable equity stake in the Skookum Creek Power Partnership upon exercising its convertible royalty interest will be further reduced from 27% (originally 50%) to nil. The annual royalty in the Project will also be further diluted from 5.42% (originally 10%) of the Project's gross revenues to nil and the Company will not provide services under the management services agreement to the Project. The targeted completion of the Project is set for the end of February 2014.”
The company noted, “The Partnership and the Company are investigating ways to defray the Cost Over-run while preserving value to the shareholders. An update will be provided once additional information is available.”
ROR operates a hydroelectric power generation station near Whistler, BC that provides power for about 4,000 homes.