Pristine Power Inc. Announces Third Quarter Financial Results and Changes to
Management and Board of Directors

CALGARY, Nov. 9 /CNW/ - Pristine Power Inc. (TSX: PPX; PPX.WT) ("Pristine" or the "Company"), an independent Canadian developer and operator of diversified electricity and steam generation facilities, today reported its financial and operational results for the three- and nine-month periods ended September 30, 2010.

Highlights

• In September, the Company entered into a pre-acquisition agreement with Fort Chicago Energy Partners L.P. ("Fort Chicago") whereby Fort Chicago offered to purchase all of Pristine's issued and outstanding common shares, as well as shares issuable upon exercise or surrender of outstanding options and shares issuable on the exercise of outstanding warrants, in exchange for 0.2703 of a Fort Chicago Class A limited partnership unit("Class A Unit") and $0.02 in cash for each outstanding Pristine warrant.  On November 8, 2010, Fort Chicago announced that 31,145,731 Pristine common shares and 1,637,445 Pristine warrants, representing approximately 86.4% and 58.2% of the outstanding Pristine common shares and Pristine warrants, respectively, had been deposited and validly taken up by Fort Chicago in accordance with the offer.  Accordingly, Fort Chicago now owns approximately 99% and 68% of the issued and outstanding Pristine common shares and warrants, respectively. 
• In August, the York Energy Centre LP ("YECLP") reached financial close and commenced construction of its 400 MW peaking facility in Ontario.  A syndicate of financial institutions provided construction and term non-recourse debt financing of $270.2 million, as well as a $60 million letter of credit facility and a $3 million operating working capital facility.  Pristine has a 50% interest in this project. As a result of the financing, Pristine earned, on a consolidated basis, a $1.5 million success fee and recovered $1.6 million of development costs previously expensed.  In addition, the Company recognized a $6.9 million gain on its investment in YECLP as a result of its equity uplift arrangement. 
• In September, the Company entered into an agreement to acquire a 50% interest in Savona and 150 Mile House (5 MW each) for $17.0 million, including the assumption of $12.0 million of project debt.  After closing of the acquisition, Pristine will effectively hold a 75% interest in each of these plants.

Financial Summary

(C$000's except per share and production data)	For the three month period ended September 30		For the nine month period ended September 30
	2010	2009	2010	2009
Net production
Power (MWh) ^(1)	36,381	2,943	88,135	15,130
Steam (mmbtu)^(1)	121,474	-	331,565	-
Revenue:
Power & steam revenues^(1)	5,696	224	16,493	1,196
Project management fees	3,430	315	4,019	649
Gas sales^(1)	287	-	1,747	-
Interest & other income^(1)	54	85	535	237
Total Revenue	9,467	624	22,794	2,082
Expenses^(1)	14,243	3,686	32,519	11,033
Net loss and comprehensive loss	(1,092)	(2,845)	(6,383)	(8,486)
Net loss per share (basic and diluted)	(0.03)	(0.09)	(0.18)	(0.28)
Funds provided by (used in) operations^(2)	1,341	(2,072)	(823)	(6,605)
Cash and cash equivalents	40,482	16,103	40,482	16,103

Notes:

⁽¹⁾     Before non-controlling interest share

⁽²⁾     Funds used in operation is a non-GAAP measure

For the Three Month Period Ended September 30

Revenue in Q3/10 increased to $9.5 million from $0.6 million in Q3/09, and primarily consists of sales of power and steam, gas sales and management fees earned from developing, constructing and operating projects.   In the third quarter of 2010, revenue from power and steam sales totaled $5.7 million on net production of 36,381 MWh of electricity and steam production of 121,474 mmbtu. Comparatively, revenue from power sales in the third quarter of 2009 was $0.2 million on net production of 2,943 MWh. The increased power and steam revenue in the three month period ended September 30, 2010 over 2009 reflects the commencement of commercial operations of the EWCC facility in November, 2009.  

Total expenses in Q3/10 increased to $14.2 million from $3.7 million in Q3/09. The increase primarily reflects commencement of operations at the EWCC facility with the remaining increase primarily due to a larger year over year staff complement, and costs associated with the Company's public reporting obligations and a reduction of amounts capitalized to projects.

Development costs, which are a function of the number of bids submitted, the type of project, and the jurisdictional process, totaled $0.9 million in Q3/10 compared to $0.3 million in Q3/09. During the quarter, the Company continued to develop its portfolio of wind projects for the Ontario FIT program and SaskPower, its biomass projects in British Columbia and prospective gas-fired generation projects in Ontario and the western United States.  

During the third quarter of 2010, the Company wrote off its investment of $3.1 million in 0755748 BC Ltd. and ANE Power Holdings Ltd., which hold the Kleana Power project, following a review of the investments' value as part of the Company's strategic review process and evaluation of the Company's value by potential acquirers.  As a result of such review and evaluation, the Company concluded that the investments had nominal value.    

Net loss in Q3/10 was $1.1 million (or $0.03 per share, basic and diluted), lower than the net loss for Q3/09 of $2.8 million (or $0.09 per share, basic and diluted). Higher revenue contribution from a full quarter of operations at EWCC was offset by increased general and administration, plant operating costs, depreciation and amortization and interest and finance charges compared to the same period in 2009.

Funds provided from operations during Q3/10 were $1.3 million compared to funds used in operations in Q3/09 of $2.1 million, reflecting a third full quarter of operations by the EWCC facility in 2010 and various gains from the YEC financing.

Reconciliation of Funds Used in Operations
C$ (000's)	For the three month period ended September 30		For the nine month period ended September 30
	2010	2009	2010	2009
Funds provided by (used in) operations	1,341	(2,072)	(823)	(6,605)
Change in operating working capital	963	203	2,648	(73)
Cash used in operations	2,304	(1,869)	1,825	(6,678)

For the Nine month Period Ended September 30

For the nine-month period ended September 30, 2010, revenue increased to $22.8 million from $2.1 million for the same period in 2009. Expenses increased to $32.5 million for the first nine months of 2010 compared to $11.0 million for the same period in 2009. Net loss was $6.4 million (or $0.18 per share, basic and diluted) for the first nine months of 2010 compared to a net loss of $8.5 million (or $0.28 per share, basic and diluted) for the same period in 2009. Funds used in operations during the first nine months of 2010 were $0.8 million, lower than the $6.6 million used in the first nine months of 2009.

Balance Sheet

As at September 30, 2010, the Company had working capital of $32.8 million, including cash and cash equivalents of $40.5 million, compared to working capital of $22.8 million, including cash and cash equivalents of $4.2 million as at December 31, 2009. Long-term debt of the Company, including the current portion, was $151.4 million as at September 30, 2010, compared to $99.4 million as at December 31, 2009.

As at September 30, 2010, there were 35,632,556 shares issued and outstanding.

Acquisition of Pristine by Fort Chicago

As the holders of not less than 90% of the Pristine common shares outstanding (on a fully-diluted basis), other than Pristine common shares held as at the date of the Offer by Fort Chicago or an affiliate or associate of Fort Chicago, have accepted the Offer, Fort Chicago intends to exercise its statutory rights under the Canada Business Corporations Act to acquire, at the Offer price of 0.2703 of a Class A Unit for each Pristine common share, the remaining Pristine common shares that Fort Chicago did not acquire under the Offer.

As a result of taking up and paying for the Pristine warrants tendered to the Offer, Fort Chicago is the registered holder of approximately 68% of the outstanding Pristine Warrants.  As described in the Offer Circular, Fort Chicago intends to execute an instrument in writing constituting an extraordinary resolution under the terms of the warrant indenture dated January 7, 2010 between Pristine and Olympia Trust Company, as trustee (the "Warrant Indenture") amending the terms of the Warrant Indenture and of the Pristine warrants to provide that Pristine warrants may be redeemed by Pristine at a price of $0.02 per Pristine warrant at any time at the election of Pristine upon not less than 10 days notice in writing (the "Redemption Right") to the registered holders of Pristine warrants. Pristine has issued a notice of redemption exercising the Redemption Right to redeem the remaining Pristine Warrants outstanding as at 5:00 p.m. (Calgary time) on November 19, 2010 (the "Redemption Time") at a price of $0.02 per Pristine warrant.  Holders of warrants are free to exercise their warrants at any time prior to the Redemption Time. 

Fort Chicago further intends to cause the Pristine common shares and Pristine warrants to be de-listed from the Toronto Stock Exchange and cause Pristine to cease to be a reporting issuer under applicable securities laws as soon as possible.

Management and Board of Directors Changes

On November 9, 2010 and in accordance with the terms of the Fort Chicago acquisition of Pristine, Mr. Jeffry Myers, President and Chief Executive Officer, and Mr. Harvie Campbell, Executive Vice President Strategic Development, resigned as directors and officers of Pristine.  Mr. Geoffrey Krause also resigned as Chief Financial Officer of Pristine..  .  Mr. Stephen White and Mr. Richard Weech, Chief Executive Officer and Chief Financial Officer of Fort Chicago, respectively, have been appointed to corresponding positions of Pristine. Mr. Toby Austin, formerly Vice President and General Counsel of Pristine has been appointed to Vice President and Chief Operating Officer, Power on an interim basis while Fort Chicago searches for a permanent employee to fill this role.  In addition, Mr. David Holm, Executive Vice President, Corporate and Business Development of Fort Chicago and Mr. Richard Weech were appointed as directors of Pristine.

Cautionary Statement Regarding Forward-Looking Information

Certain statements in this news release may constitute "forward-looking information" or "forward-looking statements" which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information.  When used in this news release, such information uses such words as "estimates", "expects", "plans", "anticipates" and other similar terminology.  Forward-looking information involves significant uncertainties, should not be read as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved.  A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information.  Although the forward-looking information in this news release is based upon what management of the Company believes are reasonable assumptions, the Company cannot assure investors that actual results will be consistent with this forward-looking information.  This forward-looking information is provided as of the date of this news release, and, subject to applicable securities laws, the Company assumes no obligation to update or revise such information to reflect new events or circumstances. 

About Pristine

Pristine (TSX: PPX) is in the business of developing, owning and operating independent power plants that produce and sell electricity and in some cases, sell process steam to industrial users.  Pristine capitalizes on opportunities in the independent power market by actively pursuing the development of dependable, cost-effective and environmentally responsible power generation facilities utilizing technology with proven past performance. Pristine currently has three projects in operation, and two under contract and in advanced development.  Pristine is developing projects in strategic regions of North America. Visit www.pristinepower.ca for more information.

For further information:

Toby Austin
General Counsel
Pristine Power Inc.
Telephone:  [phone]
[email protected]