Maple Energy on track for Q4 2011

In the Piura Region on the North coast of Peru, integrated independent energy company Maple Energy is still on target to commence commercial operations at its ethanol project in Q4 2011 as development continues.

The 60kV electric transmission line connecting the ethanol project to the national power grid is now largely complete, as are certain sections of the electric distribution system for the pump stations. The company is looking to begin acquiring electricity from a generator in the national power grid by the middle of May this year.

Because Maple will use diesel generators, the cost of electricity is expected to be lower than the costs Maple is currently faced with.

The ethanol production facility is currently under construction and will feature a distillery as well as a power generation plant, which will be able to produce up to 37MW of electric power. The steam for the power generation facilities will be supplied by a high pressure boiler utilising bagasse and other biomass.

The onsite power plant will satisfy the ethanol project's energy needs and excess power, expected to be approximately 17MW, will be transported to the Peruvian national power grid.

Maple's estimated ethanol production costs have recently been revised in order to account for the impact on the current economic climate, in particular increasing commodity prices and other related costs during the past year. Maple now estimates that its production costs for ethanol will be higher than previously reported statistics. For example, the spot price for fuel-grade ethanol at the Port of Rotterdam, which is currently the anticipated primary target market for Maple's initial shipments of ethanol production, has risen in recent months.

The company estimates an increase in projected direct production costs primarily caused by an increase in certain commodity prices. These price increases are resulting in higher cost for fertiliser, which is used in the sugarcane plantation. Commodity price increases are also directly impacting the cost of diesel, which the Maple uses for operating certain machinery, including tractors, cane hauling vehicles and harvesting equipment.

In addition, an improving employment market in Peru over the past year is raising the cost of labour, which will impact direct production costs as well as administration costs. Insurance expenses for the ethanol project are also higher than previously projected resulting in an increase in expected administration costs.

As a result, the total production costs per gallon of ethanol produced using Maple's own sugarcane as feedstock have been revised and are now expected to be approximately $1.42 (€1) per gallon (as compared to $1.28 per gallon previously reported on 29 March 2010) once the ethanol project is in full commercial operation and the entire sugarcane estate has been developed.

Rex Cannon, CEO of Maple Energy, comments: 'Maple continues to aggressively develop and advance its ethanol project and expects to commence commercial operations in the fourth quarter of 2011. I am pleased by our progress including the substantial completion of electric transmission line, an important component to the project which connects the ethanol plant to the national power grid enabling us to sell power to the Peruvian national grid once the ethanol project is fully completed as planned.'