HR Milner Generating Station ("HR Milner") is a 150 MW coal-fired power station located near the town of Grande Cache, Alberta, which has been in continuous operation since 1972.

Effective March 31, 2005, Maxim Power Corp. ("MAXIM") completed the acquisition of MPLP from the existing partners in the Partnership, each of whom acted at arm's length to MAXIM. The acquisition was completed through the issuance of 242,398,584 common shares of MAXIM to the remaining partners in the MPLP, at a deemed price of $0.32 per share, for aggregate deemed consideration of approximately $77,600,000.

Approximately three years remain on the initial term of a five year coal supply agreement ("CSA") with Luscar Ltd. ("Luscar") for the supply of up to 540,000 tonnes of thermal coal per year. There is an option to extend the CSA by a further five years. The high volatile bituminous coal is sourced from Luscar's Coal Valley mine located approximately 100 km south of Edson, Alberta.

The coal leases held by MPLP provide MAXIM with the opportunity for the potential mining of coal which could be utilized ultimately by HR Milner or sold in the international marketplace. Both the long-term CSA and the coal leases were acquired pursuant to the transaction.

HR Milner will continue to meet license limits for Nitrogen Oxides ("NOx"), and Sulfur Dioxide ("SO2") through the end of design life (2012). MAXIM estimates that Milner will be neutral with respect to future Greenhouse Gas ("GHG") emission limits, and that the facility is already in compliance with new Alberta mercury regulations to be implemented in 2010.

An external Health and Safety audit was conducted at HR Milner and resulted in the facility receiving a Certificate of Recognition in 2005 for the development of a health and safety program which met established standards set by the Alberta Association for Safety Partnerships and Alberta Human Resources and Employment.

HR Milner is considered to be operating within acceptable environmental parameters and personnel are trained in environmental performance and continuous improvement.

Plant Operations

Plant Geographic Location

Plant Operations

The station provides voltage support for the northern part of Alberta’s transmission grid utilizing two 25 kV and two 144 kV transmission lines. The single unit is coal-fired with a unique balanced draft Babcock & Wilcox downshot fired boiler, which was designed to burn by-product coal materials. The power produced by the unit is sold both on the spot market through the Alberta Power Pool and through bilateral marketing arrangements as appropriate.

Situated in the Smoky River valley approximately 20 kilometres north of Grande Cache and about 445 kilometres west of Edmonton, the Milner Generating Station is important to the local economy of the region providing employment to 62 full time employees. The Grande Cache - Milner area is located in the Rocky Mountain Foothills physiographical region, which is typified by rugged topography.

History

Construction of HR Milner began in 1969 by Canadian Utilities, Alberta Power’s parent company, and was commissioned in 1972. Since 2000, the facility was operated by ATCO Power (2000) Ltd. under an operating agreement with the Alberta Balancing Pool.

On August 26, 2003, MAXIM issued a press release identifying their intent to acquire HR Milner through a consortium of private equity investors. On October 30, 2003, the Milner Power Limited Partnership (“MPLP”), a consortium headed by MAXIM, entered into a binding Asset Sale Agreement with respect to the purchase of HR Milner from ATCO Power (2000) Ltd. and the Balancing Pool with final closing announced on January 29, 2004. Milner Power Inc. is the General Partner of MPLP and will be responsible for managing the affairs of MPLP. Milner Power Inc. has contracted with MAXIM for the provision of operating services for the plant.

Process Overview

A general overview of the power generating equipment and associated facilities are as follows:

Turbine	Hitachi: 150 MW, 11 stage, condensing, non-reheat turbine. Inlet steam at 510°C (950°F) and 8.8 Mpa (1265 psia).
Generator	Hitachi: Alternator rated at 166,667 kVA, hydrogen-cooled.
Boiler	Babcock & Wilcox: Downshot, pulverized coal, balanced draft with designed capacity of 612 tonnes (1,350 kpph) with superheater outlet conditions of 8964 kPa (1300 psia) and 513°C (955°F).
Pulverizers and Ash Disposal	The boiler is equipped with two Riley double-ended ball tube mills. Bottom ash is sluiced to dewatering bins and is then hauled by truck to an off-site ash storage area. Fly ash is transferred to a fly ash silo and is then hauled by truck to the ash disposal area.
Feedwater Supply	The non-reheat configuration has a feedwater cycle that consists of three motor driven boiler feed pumps, two low-pressure heaters, a de-aerator, and two high-pressure heaters.
Condenser and Cooling Tower	The condenser (with stainless steel tubes) cooling is provided by circulating water from an Ecodyne four cell mechanical draft cooling tower. Makeup water comes from the Smoky River adjacent to the site.
Particulate Removal	Particulate removal consists of a set of multi-cyclone mechanical separators followed by a Flakt pulse jet fabric filter (baghouse).

Production Information

HR Milner was designed to burn coal by-product materials supplied from the adjacent Smoky River mining and processing operations. Surface and underground mining began in the area in 1969, with the development of the McIntyre-Porcupine Mine (subsequently re-named the Smoky River Mine) which produced prime coking coal for export to Japan.

Since it began operations in 1972, HR Milner has burned a cost-effective mix of primarily low grade fuels including by-product coal from the adjacent mining operations, including discards, de-watered tailings, pond tailings and off-specification ROM coking coal. In 2000, the operator of the Smoky River Mine was petitioned into bankruptcy, interrupting HR Milner’s supply of coal. Interim coal supply agreements were subsequently arranged for the delivery of thermal coal by rail. In 2004, a coal supply arrangement was signed with Luscar to supply high quality thermal fuel from its Coal Valley Mine, south of Edson. Over 75% of HR Milner’s fuel is now railed in from Coal Valley. In 2006, Luscar completed a reorganization of its assets and the Coal Valley mine came under control of a subsidiary of Sherritt International and the Ontario Teacher’s Pension Fund called Coal Valley Resources Limited. As well, HR Milner periodically receives Run of Mine coal from the adjacent mine now owned by Grande Cache Coal Company since 2001.