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Fifth paragraph, last sentence of release should read: This provides more time for the affiliate to pursue leases on additional RC facilities owned by CCS for which they have indicated an interest in leasing up to a total of 18 to 20 million tons of RC per year (sted ... leasing up to a total of 18 to 20 metric tons of RC per year).
The corrected release reads:
ADA-ES PROVIDES YEAR-END UPDATE ON REFINED COAL BUSINESSNew Vice President of Investor Relations Joins Management Team
ADA-ES, Inc. (NASDAQ: ADES) (“ADA”) today provided a year-end update on its Refined Coal (RC) business and announced that Graham Mattison has joined the Company as Vice President of Investor Relations.
RC is sold through Clean Coal Solutions (CCS), ADA’s joint venture (JV) with an affiliate of NexGen Resources Corporation and an affiliate of The Goldman Sachs Group, Inc. CCS markets three different technologies, CyClean™, M-45™, and M-45-PC™, all of which can reduce emissions of NOx and mercury and can qualify for Internal Revenue Service (IRS) Section 45 tax credits for the next nine years (currently $6.47 per ton of RC). The JV has 28 qualified facilities available to produce RC and generate tax credits until 2019 for the first two facilities and 2021 for the newer 26 facilities.
The JV is currently operating 8 facilities producing RC at power plants around the country. Four of the facilities are leased to two different RC investors, with the other four being operated by CCS and generating tax credits for its owners’ use. CCS and a new RC investor have agreed in principle to the material terms for the sale of one of the facilities currently operating at a coal-fired plant that is in the process of restructuring its debt. Finalizing the RC contracts has been delayed until the debt restructuring is completed and associated lender consents required for the RC sale transaction are obtained, which ADA now expects to occur in February 2013. While being operated by CCS, this RC facility is currently generating tax credits at a rate of approximately $25 million per year, while costing approximately $10 million a year for CCS to operate. Under the terms of the proposed RC contracts, once the RC sale transaction is completed, ADA expects that the RC facility will immediately begin generating approximately $14 million a year in revenue, thus creating an improvement in cash flow of about $24 million per year. The RC sale contracts provide for an upfront cash payment of greater than $20 million (including amounts that will be paid only upon issuance by the IRS of a private letter ruling (PLR) relating to the transaction). CCS will continue efforts to close this RC transaction as promptly as possible notwithstanding that certain of the conditions to closing are outside of its direct control.