News
May 31, 2010Sierra Geothermal and Ram Power enter into Letter of Intent Ram Power to Acquire Sierra Geothermal
Reno, Nevada and Vancouver, British Columbia- Sierra Geothermal Power Corp. (TSXV:SRA) (“Sierra”) and Ram Power Corp. (TSX:RPG) (“Ram Power”) are pleased to announce that they have entered into a non-binding letter of intent in relation to the potential acquisition by Ram Power of all of the outstanding common shares of Sierra.
The letter of intent contemplates the acquisition by Ram Power of all of Sierra’s outstanding common shares by way of a share exchange whereby holders of outstanding Sierra shares would receive 1 common share of Ram Power for every 12 common shares of Sierra. All outstanding options and warrants to purchase Sierra shares will be exchanged under the transaction for options and warrants to purchase common shares of Ram Power in accordance with the exchange ratio. The transaction will result in the issuance of approximately 11.125 million common shares of Ram Power to shareholders of Sierra.
Based on the exchange ratio and Ram Power’s May 28, 2010 closing share price of $2.56, the implied offer price of $0.213 per Sierra share represents an 18.5% premium to its May 28, 2010 closing share price of $0.18 and a premium of 19.9% to Sierra’s 20-day volume weighted average price of $0.178.
The benefits of the transaction include:
- Allows shareholders of Sierra to recognize an attractive premium to the existing Sierra share price, while obtaining an interest in Ram Power’s broader portfolio of operating, in-construction, and development geothermal assets.
- Shareholders of Sierra will become shareholders of Ram Power, with its experienced management team and strong balance sheet;
- Increases Ram Power’s footprint in Nevada, one of the premier regions for geothermal development in the United States;
- Potential for synergistic development of a power cluster in Esmeralda County, Nevada as Ram Power’s Clayton Valley land positions are contiguous to Sierra’s Paymaster District projects: Alum, Silver Peak and Pearl;
- Acquired projects improve the ability of Ram Power to deliver additional power under its existing power purchase agreement with NV Energy;
- Continuance of the consolidation process underway in the geothermal industry and the enhancement of Ram Power’s position as a market leader amongst independent geothermal energy companies.
The parties expect to enter into definitive agreements in relation to the transaction towards the end of June 2010, subject to negotiation of mutually satisfactory terms, completion of confirmatory due diligence and the receipt of lock-up commitments in favour of the transaction from Sierra’s largest shareholders. In addition, the closing of any transaction will be conditional upon receipt of any required regulatory and shareholder approvals. Under the letter of intent, Ram Power and Sierra have agreed to negotiate exclusively in order to complete confirmatory due diligence and negotiate definitive agreements.
Gary Thompson, SGP’s President, Chief Executive Officer and Executive Director stated, “We are pleased that our formal strategic process led by Jacob Securities Inc. has resulted in a transformative transaction for Sierra shareholders. We believe that Sierra shareholders will benefit from this transaction by merging into a well capitalized geothermal company such as Ram Power. The transaction has the full support of the Sierra Board of Directors, Special Committee, and Management who will be working closely with Ram Power over the coming weeks to finalize and execute definitive agreements.”
Hezy Ram, Chief Executive Officer for Ram Power stated, “We are very pleased about the letter of intent with Sierra. This transaction comes as a continuation of our strategy to create a renewable energy company of scale, with the skilled management and capital in place to execute on our projects.”
ABOUT RAM POWER CORP.
Ram Power is a renewable energy company based in Reno, Nevada, engaged in the business of acquiring, exploring, developing, and operating geothermal properties and has interest in geothermal projects in the United States, Canada, and Latin America.
ABOUT SIERRA GEOTHERMAL POWER CORP.
Sierra is a Vancouver-based geothermal energy company focused on the exploration and development of clean, sustainable power in Western North America. Sierra has 100% control over its 120,000 acre portfolio of geothermal properties in Nevada, California and British Columbia. Sierra’s projects have a combined total estimated capacity of almost 400MW.
On behalf of the Board of Directors
Gary Thompson, P.Geo
President, Chief Executive Officer and Director
FOR FURTHER INFORMATION PLEASE CONTACT:
Sierra Geothermal Power Corp.
Anthony Srdanovic
Investor Relations
(604) 683-0332 x 115
.(JavaScript must be enabled to view this email address)
http://www.sierrageopower.com
Ram Power Corp.
Steven Scott
Director of Investor Relations
(775) 398‐3711
.(JavaScript must be enabled to view this email address)
http://www.ram-power.com
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This press release contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or plans and objectives for future operations. In some cases you can identify forward-looking statements by the use of terminology such as "may", "should", "anticipates", "believes", "expects", "intends", "forecasts", "plans", "future", "strategy", or words of similar meaning. Forward-looking statements in this press release include statements about the proposed transaction, the expected date of entering into definitive agreements and the benefits the transaction might bring to Ram Power, Sierra and their respective shareholders. While these forward-looking statements and any assumptions upon which they are based are made in good faith and reflect the current judgment of management at both Ram Power and Sierra, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other forward-looking information suggested in this press release. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks that the companies are unable to negotiate a mutually acceptable agreement, the risk that they cannot obtain the consents that may be required in order to consummate the transaction, the risk of adverse changes to either company or the industry in which they operate, as well as the general business risks described in the periodic disclosure documents filed by Ram Power and Sierra on SEDAR, copies of which are available at www.sedar.com. Any of these risks could cause actual results or achievements to be materially different from those that are expressed or implied by the forward-looking statements contained in this press release. Except as required by applicable law, neither of Ram Power or Sierra intends to update any of the forward-looking statements to conform these statements to actual results.
May 31, 2010
CanGEA releases Member Project Database
The Canadian Geothermal Energy Association (CanGEA) today released the much anticipated CanGEA Member Projects Database. The report outlines all the various CanGEA member projects under development around the world. This inaugural report is the first of its kind for the Canadian geothermal energy industry.
According to the report CanGEA members are currently working on more than 70 projects under development representing more than 1,400 MW, and nearly 2,000 MW of installed geothermal capacity. The projects listed span four continents and eleven countries giving CanGEA members a truly global reach in their operations. While there is currently no geothermal power production in Canada there are nevertheless a number of projects under development which may soon come online to supply Canada’s first few megawatts of geothermal power.
Typically projects have been categorized in terms of resource development. The CanGEA Member Projects Database instead recognizes three levels of Geothermal Resources and two levels of Geothermal Reserves. With increasing geological knowledge and confidence a Geothermal Resource progresses from Inferred, to Indicated, to Measured. Similarly, with consideration of energy recovery and conversion, economic, marketing, environmental, social, legal, and regulatory factors (all Modifying Factors) the resource may be labelled a Probable or Proved Geothermal Reserve.
The CanGEA Member Projects Database utilizes the Canadian Geothermal Code for Public Reporting to provide a framework for comparison among industry players. Included in the Database is the Geothermal Progress Checklist which lays out the framework to categorize projects under development based on geological knowledge and modifying factors such as economic and legal factors. The checklist highlights the necessary steps in the development of a geothermal resource from exploration to production. Applying this framework allows for universal comparison among projects under development while also providing the cursory framework to adhere to the Canadian Geothermal Code for Public Reporting.
For a copy of the CanGEA Member Projects Database please follow the link below. CanGEA encourages interested parties to provide feedback for future iterations of the report and welcomes any questions or comments.
About CanGEA: CanGEA is a national industry association that believes we can provide competitively priced, emissions free, renewable, base-load energy to Canadians and to U.S. export markets. CanGEA works on behalf of our members to facilitate the growth of geothermal power projects and promote publicly listed companies on the Canadian Exchanges.
Contact: David Gowland dave@cangea.ca
Policy Director, Canadian Geothermal Energy Association
To view the report click here
May 28, 2010
Setting Geothermal Policies: Nations Considering Many Paths to Bolster the Industry
by Marc Favreau, Geothermal Digest
Published: May 12, 2010
In Australia, proposed changes to tax laws would allow the geothermal energy industry to write-off exploration costs. At the same time, Prime Minister Kevin Rudd's decision to delay an emissions trading scheme has billions of investment in new power stations on hold because climate policy uncertainty is making financing impossible. In Indonesia, a Japanese engineering consultant firm has recommended a straight-up subsidy of PT PLN of as much as 3.7 cents per kilowatt hour of geothermal power purchased by the state owned utility from independent power producers.
What all of this adds up to is the clear need for governments to get involved and stay involved. In the U.S., private money has flowed to geothermal projects effectively following Department of Energy grants, and the previous examples point to the need to set and sustain policy for the industry to flourish regardless of nationality.
The proposed tax changes in Australia will make geothermal energy explorers eligible for a $1 billion resource exploration tax rebate package from July 1 next year. Susan Jeanes, chief executive of the Australian Geothermal Energy Association said making geothermal explorers eligible for the tax rebate was a step in the right in direction but the delay in its introduction until July next year would slow development. The politically charged debate on emissions trading puts off implementation to 2013. Time will tell if the tax write off will be attractive enough to keep geothermal development moving forward.
A study by the Japan International Cooperation Agency was cited in a call for the Indonesian government to set the price of geothermal power to be purchased by PLN from at 11.9 cents for the first 15 years of operation. A comparison was made to coal fired power plants and concluded that the subsidy would be needed to bridge the timeline to establishing a viable geothermal industry.
The British Columbia Clean Energy Act skirts Utility Commission approval on major energy projects, giving greater Ministerial authority to advance renewable energy projects. Back on Nevis, West Indies Power CEO of Kerry McDonald says that the small 10 MW project has the distinction of being the most written about project in the world at present. He said “The project is attracting lots of attention from everyone around the world for both studying purposes, how we were able to do this.” And now, he’s pointing to his government’s support as a prime driver.
Marc Favreau, is editor of Geothermal Digest.
This article was originally published by the Geothermal Digest and was reprinted with permissionMay 18, 2010
Magma Energy Corp To Hold 98.53% Of Iceland Geothermal Energy Producer HS Orka
| MAGMA ENERGY CORP. : http://www.magmaenergycorp.com/ : News Releases |
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Vancouver, B.C., Canada, May 17, 2010 - Magma Energy Corp. (TSX:MXY) is pleased to announce that it has signed an agreement with Geysir Green Energy ehf ("GGE") to purchase all of GGE's stake in Iceland geothermal company HS Orka hf ("HS Orka") resulting in Magma's stake increasing to 98.53%. HS Orka currently produces 175 megawatts ("MW") of geothermal power and 150 MW of thermal energy for district heating, and has near-term expansion plans that would increase its power production to 405 MW by 2015. The transaction will increase Magma's geothermal power production to 186 MW, its geothermal reserves to 193 MW and its indicated and inferred geothermal resources to 1,161 MW. The remaining 1.5% stake in HS Orka is held by four Icelandic municipalities. Magma's Chairman and CEO, Ross Beaty commented, "I am really pleased with this landmark acquisition, which brings Magma such long term core assets as large scale low cost geothermal power production, enormous in-ground geothermal resources that will enable additional future production growth, and a wonderful team of Icelandic geothermal experts who can help us grow both in Iceland and internationally." The agreement provides that Magma's wholly owned subsidiary will purchase GGE's remaining interest in HS Orka for 10.56 billion Icelandic Króner ("ISK") (approximately $84.5 million) and by assuming a bond issued by GGE with a face value of 6.29 billion ISK (approximate net present value of $36 million). Magma may elect to pay $26.55 million of the purchase price in common shares valued on the basis of Magma's trading price in late July 2010 and the remaining cash component in two tranches of $45.45 million by July 31, 2010, and $12.50 million by November 30, 2010. The bond will be secured by 27.35% of the shares acquired by Magma in this transaction. The Company plans to finance this transaction by: bridge financing, conventional debt and/or equity financing, and/or sale of a minority stake in HS Orka to other Icelandic or offshore investors. The agreement is subject to several closing conditions and is expected to close in late July 2010. HS Orka published its first quarter 2010 financial results today and the results have been reconciled to Canadian GAAP. Summary financial information with respect to the operation of HS Orka, on a 100% basis, is as follows:
About HS Orka HS Orka is the largest privately owned energy company in Iceland producing 9% of the country's power needs. Installed geothermal power capacity is 175 MW from the Svartsengi and Reykjanes power plants. In addition, HS Orka generates 150 MW of thermal energy for district heating. Expansions are planned that will increase HS Orka's geothermal power production to 405 MW by 2015. HS Orka's 75 MW Svartsengi plant began production in 1978 and its 100 MW Reykjanes plant began production in 2006. Much of the power is sold under US dollar contracts to a large aluminum smelter that is one of the world's lowest cost aluminum producers. The expansion plans of HS Orka will provide power to a new aluminum smelter that is currently under construction. About Magma Energy Corp. Magma Energy Corp. is a geothermal power company which operates, develops, explores and acquires geothermal energy projects. We have an extensive portfolio of properties throughout the western United States, Iceland and Latin America, including one operating power plant in Nevada and two other operating power plants in Iceland. For further information please contact: Alison Thompson, Vice President, Corporate Relations Magma Energy Corp. Phone: 604.646.1882 Email: .(JavaScript must be enabled to view this email address) CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION This news release contains certain "forward-looking information" within the meaning of Canadian securities laws, which may include, but is not limited to, statements with respect to future events or future performance, prospects for closing our acquisition of an interest in HS Orka, plans to expand our and HS Orka's geothermal power production, management's expectations regarding our growth, business prospects and opportunities and geothermal energy generation capacities. Such forward-looking information reflects management's current beliefs and is based on information currently available to management. A number of known and unknown risks, uncertainties and other factors, may cause our actual results or performance to materially differ from any future results or performance expressed or implied by the forward-looking information. The forward-looking information is based upon what management believes to be reasonable assumptions, including, but not limited to, assumptions about: conditions to closing our acquisition of an interest in HS Orka being met, the success and timely completion of planned exploration and expansion programs, the growth rate in net electricity consumption; support and demand for non-hydroelectric renewables; government initiatives to support the development of renewable energy generation; the accuracy of reserve estimation methodology and analysis used to estimate the quantity of potentially recoverable thermal energy; geological, geophysical, geochemical and other conditions at our properties; the reliability of technical data, including extrapolated temperature gradient, geophysical and geochemical surveys and geothermometer calculations; capital expenditure estimates; availability of capital to fund development and expansion programs; and general economic conditions. Forward-looking information and statements are also based upon the assumption that none of the identified risk factors that could cause actual results to differ materially from the forward-looking information and statements will occur. There can be no assurance that the forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, prospective investors should not place undue reliance on forward-looking information. Other than as required by applicable securities laws, we assume no obligation to update or revise such forward-looking information to reflect new events or circumstances. |
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Copyright © 2010 by Magma Energy Corp. All rights reserved worldwide. |
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This page was created on Tue May 18, 2010 at 3:08:33 PM Pacific Time.
May 18, 2010
Geothermal Power versus GeoExchange Heating and Cooling
There has been much confusion of late between geothermal power and geoexchange heating and cooling. Perhaps the easiest way to differentiate between the two is to think of geothermal power as the deeper, hotter resource that generates electricity while geoexchange uses the ambient heat of the near surface earth to provide heating and cooling for residential of commercial use.
Geothermal Power
Is derived from deep, hot geothermal resources. These are often found 2-4 km below the surface and are typically in excess of 70 degrees Celsius. Water or fluid is used to transfer the heat from the deep resource to the surface which drives a turbine and generator to produce electricity. While this geothermal power is predominantly used to generate electricity the waste heat can also be used for heating in residential and commercial applications. Find out more here
GeoExchange
These systems use heat pumps which collect and/or distribute heat through a network of pipes buried 1-2 meters below surface or submerged in a body of water. Such systems rely on the relatively constant temperature of the earth just below the frost line which is typically 5-10 degrees Celsius. A heat pump or heat exchanger collects and concentrates this heat to provide heating during colder months. In summer the process is reversed to provide cooling by disseminating heat to the surrounding environment. These systems require electricity to run the pumps and equipment and do not generate electricity. See www.geo-exchange.ca to learn more.
May 18, 2010
Magma Energy Corp Announces Third Quarter Results
| MAGMA ENERGY CORP. : http://www.magmaenergycorp.com/ : News Releases |
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(All amounts in US dollars unless otherwise stated and all production figures are approximate)
Vancouver, B.C., Canada, May 14, 2010 - Magma Energy Corp. (TSX:MXY) today reported its financial and operating results for the third quarter ended March 31, 2010. The Company also provided an update on its operations. This earnings release should be read in conjunction with the Company's MD&A, unaudited Financial Statements and Notes to Financial Statements for the corresponding period along with the audited consolidated Financial Statements, the related MD&A, and the Annual Information Form for the year ended June 30, 2009. This information is available on the Company's website at www.magmaenergycorp.com and has been posted on SEDAR at www.sedar.com. Commenting on today's announcement, Ross Beaty, Chairman and CEO, said "Magma Energy continued to build its global geothermal power business in the third quarter of fiscal 2010. We acquired an additional 5.24% interest in Iceland's HS Orka in March and May which increased Magma's total power generation to 94 MW and our geothermal resources to 827 MW, continued our expansion efforts at our Soda Lake operation in Nevada, and were awarded the 100,000 hectare Pellado exploration concession and the 4,000 hectare Maule exploitation concession in Chile. We began new drilling programs in Chile, Iceland and Nevada and I expect we will continue to increase our geothermal production and our in-ground resources during the balance of 2010." Corporate Financial Results (expressed in thousands of dollars, except for per share amounts)
HS Orka Financial Results (expressed in thousands of dollars and reconciled with Canadian GAAP) Summary financial information with respect to the operation of HS Orka, on a 100% basis, is as follows:
($1.9 million) for the quarter ended December 31, 2009. For the third quarter ended March 31, 2010, Magma reported net income of $142,000 ($0.00 per share), including the Company's share of HS Orka's net income of $3.60 million. The Soda Lake operation earned revenues of $1.29 million, gross profit of $417,000 and net income of $72,000 after deducting non-cash and other related expenses. On a cash basis for the quarter ended March 31, 2010, the Company spent $2.0 million on operating activities and $13.1 million on investing activities, including investments of $7.1 million to acquire an additional interest in HS Orka, $2.8 million to acquire and explore the Company's portfolio of exploration projects and $2.2 million on the Soda Lake expansion. At March 31, 2010, Magma had cash and cash equivalents of $40.5 million, working capital of $31.7 million, and long-term debt with a fair value at quarter end of $51.0 million. For the quarter ended March 31, 2010, HS Orka generated revenues of $14.17 million, gross profit of $4.46 million, net income from operations of $4.24 million, other income, net of other expenses, of $7.59 million, and income of $9.61 million, net of taxes of $2.21 million. EBITDA for the period was $5.72 million. On an annualized basis, HS Orka's revenues for the quarter represent a 14% increase over revenues earned in fiscal 2009. Approximately 46% of HS Orka's revenues are sold under purchase power agreements with prices indexed to the price of aluminum, resulting in higher revenues as aluminum prices increase. HS Orka Operations The 100 MW Reykjanes and the 75 MW Svartsengi power plants as well as the 150 MW Svartsengi district heating system produced as expected during the quarter. The recent volcanic eruptions in Iceland have had no impact on HS Orka operations. Three share purchases from Geysir Green Energy and HS Orka's treasury since the end of the second quarter resulted in Magma's ownership rising to 46.18%. The purchases were financed from cash on hand. Efforts to increase ownership in HS Orka are on-going. HS Orka is the largest privately owned energy company in Iceland supplying 9% of the country's electrical output. Expansion plans for an additional 230 MW are well advanced and construction is progressing at the aluminum smelter where the power is expected be sold. Power contracts are currently being negotiated and the transmission line has been approved. HS Orka has 175 MW of Reserves and 640 MW of Resources as defined by the Geothermal Reporting Code. Magma's investment in HS Orka and, consequently, in Iceland's energy industry, is a significant part of the Company's strategic plans for growth. To support these plans and Magma's other global projects, Magma opened a new Iceland office during the quarter staffed with an exceptionally experienced team of geothermal experts. Soda Lake Operation The Soda Lake operation produced as expected during the quarter with interruptions due to the Phase 1 expansion program, which is designed to boost production from 11 MW to 23 MW, and a half-day interruption on February 22 due to a fire that damaged one of the operation's ten turbine units. Damage from the fire will be covered by insurance subject to a $500,000 deductable. As part of the field optimization program, well 45A-33 was successfully connected to the plant in late April 2010 and commissioning is underway. This is the first new well that has been connected to the plant in over 17 years and represents one of the hottest pumped wells in the world with one of the industry's deepest setting depths at over 2,000 feet. The new well, along with additional improvements resulting from recent plant refurbishments are expected to add several MW to the facility's output and will increase Soda Lake's revenues and profitability in the future. Current production at Soda Lake is 13.5 MW, up from 11 MW in the previous quarter. Deep well 41B-33, which was drilled in 2009, will be used as an injection well. Magma expects to confirm the remaining Soda Lake capacity increase to 23 MW after mid-year 2010. To date, $14 million has been expended of the original $18.2 million Phase 1 budget. During the quarter, a Geothermal Reporting Code estimate was prepared for Soda Lake with GeothermEx acting as the Qualified Person. The recent field optimization study resulted in a comprehensive data set that was used for the reservoir estimate. Proved Reserves of 20 MW and Indicated Resources of 41 MW have now been established for the property. This compares with a previous P90 estimate of the geothermal reservoir's gross generation capacity of 29 MW. Exploration Activities In January 2010, Magma was awarded an exploration permit for the 100,000 hectare Pellado property. Subsequent to the quarter end, Magma received a 50 MW exploitation permit for the 4,000 hectare Laguna de Maule property which adjoins the Pellado property. The exploitation permit will allow Magma to proceed directly to construction of a Phase 1 operating plant once a drilling program, infrastructure, permitting and other work have been completed. The two properties comprise the Mariposa Geothermal Resource ("Mariposa") that is estimated to contain an Inferred Resource of 320 MW of electrical generation capacity, as defined by the Geothermal Reporting Code. Mariposa is located within 25 kilometers of two hydro power plants and associated transmission lines that are in development. Road construction for all-season access began in September 2009 and drilling of the first of four slim holes commenced in March 2010. The 2010 slim hole program, plus related work, is expected to be completed by December at a cost of $15 million. During the quarter, Magma commenced a drilling program on the Desert Queen property in Nevada. To date, four temperature gradient holes have been drilled and the results are presently being evaluated. A drilling program on the McCoy property in Nevada is currently planned. In May, the Company added geothermal holdings to its Desert Queen and Granite Springs properties. In Peru, Magma acquired the mining rights to the San Pedro and Crucero properties consisting of 1,600 hectares. Exploration programs on all of Magma's Peruvian properties will commence upon the award of geothermal rights, which are pending. In April, Magma's joint venture with Ram Power on two Nicaraguan concessions was terminated. Mr. Beaty concluded, "Magma is rapidly building itself into a large global geothermal power company, with its active programs in Nevada, Chile and Iceland. We have an outstanding team of geothermal experts, a healthy balance sheet and an excellent property portfolio which should deliver continuing good results during the rest of 2010." About Magma Energy Corp. Magma Energy Corp. is a geothermal power company which operates, develops, explores and acquires geothermal energy projects. We have an extensive portfolio of properties throughout the western United States, Iceland and Latin America, including one operating power plant in Nevada and an interest in two other operating power plants in Iceland.
For further information please contact: Alison Thompson, Vice President, Corporate Relations Magma Energy Corp. Phone: 604.646.1882 Email: .(JavaScript must be enabled to view this email address) Cautionary Note regarding Forward-Looking Statements and Information This news release contains certain "forward-looking information" within the meaning of Canadian securities laws, which may include, but is not limited to, statements with respect to future events or future performance, management's expectations regarding our growth, results of operations, revenues, requirements for capital, future demand for and prices of electricity, business prospects and opportunities, exploration and development, geothermal resources, recoverable geothermal energy or energy generation capacities. Such forward-looking information reflects management's current beliefs and is based on information currently available to management. In addition, it is worthy of note that the financial results of HS Orka represent the first operating year of the company in its present form. As such, future results could differ materially from those reported or anticipated. Accordingly, prospective investors should not place undue reliance on the current reported financial results. Other than as required by applicable securities laws, we assume no obligation to update or revise such forward-looking information to reflect new events or circumstances. A number of known and unknown risks, uncertainties and other factors, may cause our actual results or performance to materially differ from any future results or performance expressed or implied by the forward-looking information. The forward-looking information is based upon what management believes to be reasonable assumptions, including, but not limited to, assumptions about: the success and timely completion of planned exploration and expansion programs, the growth rate in net electricity consumption; support and demand for non-hydroelectric renewables; government initiatives to support the development of renewable energy generation; the accuracy of reserve estimation methodology and analysis used to estimate the quantity of potentially recoverable thermal energy; geological, geophysical, geochemical and other conditions at our properties; the reliability of technical data, including extrapolated temperature gradient, geophysical and geochemical surveys and geothermometer calculations; capital expenditure estimates; availability of capital to fund exploration, development and expansion programs; and general economic conditions. Forward-looking information and statements are also based upon the assumption that none of the identified risk factors that could cause actual results to differ materially from the forward-looking information and statements will occur. There can be no assurance that the forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, prospective investors should not place undue reliance on forward-looking information. Other than as required by applicable securities laws, we assume no obligation to update or revise such forward-looking information to reflect new events or circumstances. |
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Copyright © 2010 by Magma Energy Corp. All rights reserved worldwide. |
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This page was created on Tue May 18, 2010 at 2:54:32 PM Pacific Time.
May 18, 2010
Sierra Geothermal Makes Discovery at Alum and Reports Q1 2010 Financials
Vancouver, British Columbia - Sierra Geothermal Power Corp. (“Sierra”) [TSX-V: SRA] is pleased to announce that it has made a geothermal discovery at its 100% owned Alum project in Esmeralda County, Nevada. In addition, Sierra reports its Q1 2010 financial results and provides an operational update.
Alum Project
The geothermal discovery comes from Sierra’s slim well 26-19, which is considered to be a geothermal discovery well due to the levels of permeability and temperature encountered. The drilling of the slim well 26-19 concluded on May 14, 2010. The well was drilled to a maximum depth of 1,484 meters or 4,868 feet. The preliminary bottom hole temperature of 146 degrees Celsius or 295 degrees Fahrenheit was recorded immediately after drilling stopped. Several zones of high permeability were encountered between 1,116 and 1,325 meters (3,663 and 4,349 feet, respectively). After coring through the 209 meter permeable zone, a geothermal water sample was air lifted and flowed for three days and samples were collected for analysis. Temperature measurements in the completed well will continue until thermal equilibrium is achieved.
A temperature profile on the previously drilled well 25-29 was recorded April 30, 2010, five months after drilling was completed. The temperature log returned a maximum of 130 degrees Celsius or 266 degrees Fahrenheit at 630 meters or 2,067 feet.
The cost for these wells is shared on a 50/50 basis with the US Department of Energy (DOE) under the 2009 Geothermal Technologies Program grant award. The total grant amount from the DOE for the Alum project was $5,000,000. The Alum project was acquired from Geo-Energy Partners 1983 Ltd in 2006.
“We are grateful for the financial support that we are receiving from the DOE in advancing our Alum project, as it has helped us make a discovery at Alum with less capital than we would have otherwise employed. Numerous people were employed during the drilling of these wells, showing that the DOE grant program is working. We look forward to advancing the Alum project to the next level which is drilling full sized production assessment wells,” said Gary R. Thompson, President and CEO of Sierra.
Q1 2010 Financial Results
For the first quarter ended March 31, 2010, Sierra reported a net loss of $1,436,583 or ($0.01) per share compared to a net loss of $428,231 or ($0.01) per share for the first quarter ended March 31, 2009. As of March 31, 2010, Sierra had cash of $4,459,286 and working capital of $3,053,202, compared to cash of $8,260,320 and working capital of $6,664,549 on December 31, 2009. The full text of Sierra’s unaudited financial statements and management’s discussion and analysis is available on the SEDAR website at www.sedar.com or at www.sierrageopower.com.
Reese River Project
Sierra recently completed a review and analysis of new geological, structural, and geophysical data at its Reese River project in Lander County, Nevada. The integration of these new data sets into the Reese River conceptual model is the result of successful collaborations with the University of Nevada, Reno and the University of British Columbia. New data from detailed geologic mapping and joint 3D inversion modeling of magnetotelluric and Z-TEM data highlight an area of complex faulting coinciding with the change in trend of a major geologic structure in the area. This structurally complex area (the accommodation zone) may be a zone of enhanced permeability at depth and is of high geologic interest. Also, the recent temperature hole 23-03, which was drilled to a depth of 30 meters, returned a temperature gradient of 1,100 degrees Celsius per kilometer or 61 degrees Fahrenheit per 100 feet. This hole also lies within the inferred accommodation zone. Recent internally-derived resource estimates for Reese River, using a Monte Carlo model, indicates 70 MW of power potential. The increase is based on the recent step out drilling which Sierra believes has identified a thermal anomaly larger than previously delineated.
Silver Peak Project
During February/March 2010, core well 38-11 was drilled at Silver Peak to 1,649 meters or 5,409 feet. This well was the first deep well at Silver Peak. A recent stable temperature measurement recorded a bottom hole temperature of 103 degrees Celsius or 217 degrees Fahrenheit.
The costs for these wells are shared on a 50/50 basis with the US Department of Energy (DOE) under the 2009 Geothermal Technologies Program grant award. The total grant amount from the DOE for the Silver Peak project was $5,000,000.
Imperial Valley Properties and Nevada Land Sale Results
Sierra has been notified that the Imperial Valley (Salton Sea) lands in California, which comprise 3,442 acres, have been leased by the Bureau of Land Management (BLM) to Western Geothermal Partners, LLC. The Salton Sea lands are the last parcel of land to be acquired and paid for under the Cayley Geothermal and Western Geothermal 2006 agreement. Cayley Geothermal Corp. is a wholly owned subsidiary of Sierra. At the May 11, 2010 BLM geothermal land sale Sierra made the winning bids on 4,541 acres adjacent to its Reese River project, 1,880 acres at Sierra’s existing Howard Project and 2,877 acres in close proximity to its Alum project.
About Sierra Geothermal Power Corp.
Sierra is a Vancouver-based geothermal energy company focused on the exploration and development of clean, sustainable power in Western North America. Sierra has 100% control over its 120,000 acre portfolio of geothermal properties in Nevada, California and British Columbia. Sierra’s projects have a combined total estimated capacity of almost 400MW. One megawatt (MW) is enough to power 800 homes. www.sierrageopower.com
On behalf of the Board of Directors
Gary Thompson, P.Geo
President, Chief Executive Officer and Director
Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This news release may contain forward-looking statements. All statements, other than statements of historical fact, included or incorporated by reference in this news release are forward-looking statements, including, without limitation, statements regarding activities, events or developments that Sierra expects or anticipates may occur in the future. Forward-looking statements can be identified by the use of forward-looking words such as “may”, “would”, “could”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe” or “continue” or similar words or the negative thereof. Forward-looking statements in this news release include statements that Sierra is looking forward to advancing Alum to drilling full sized production wells, that thermal equilibrium can be achieved at its Alum slim well 26-19, that the structurally complex accommodation zone at Reese River may be a zone of enhanced permeability at depth, that the size of the thermal anomaly at its Reese River project has increased to 70MW, as indicated by recent internally-derived resource estimates using a Monte Carlo model, and that Sierra’s projects have a total estimated capacity of almost 400MW. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur. Readers are cautioned not to place undue reliance on these forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include general economic and market conditions, availability of working capital, changes in the law, actions of competitors, drill results, changes in circumstance and Sierra’s ability to implement business strategies and pursue its business plan. In addition, all forward-looking statements involve risks and uncertainties, including the risks and uncertainties detailed in Sierra’s filings with the applicable Canadian securities commissions, copies of which are available at www.sedar.com. We urge you to carefully consider these factors. All of the forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this news release are made as of the date of this news release and Sierra undertakes no obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise, except as required by law.
May 18, 2010
CanGEA responds to Grasby and Majorowicz report
GEOTHERMAL POWER COULD MEET CANADA’S POWER NEEDS
Calgary, AB – A recent report by Stephen Grasby and Jacek Majorowicz estimated that all of Canada’s power needs could potentially be met by developing Canada’s deep geothermal resources through enhanced geothermal systems (EGS). The Canadian Geothermal Energy Association, on behalf of its members, welcomes the report’s findings but stresses the need to first develop Canada’s traditional geothermal resources before proceeding with EGS technology.
There is tremendous potential for Canada’s easily accessible geothermal resources, estimated to be greater than 5,000 MW. Including EGS and other new technologies this figure rises significantly. However, enhanced systems are often met with increased costs and require cutting edge technology to reach depths of roughly 10 kilometres as mentioned in the Grasby & Majorowicz report. Rather, the focus should be on developing Canada’s more tangible geothermal resources which in many cases are already flowing to the surface in the form of hot springs and pools.
Furthermore, CanGEA members have the knowledge and expertise to bring these traditional geothermal resources online for power production. With over 72 projects under development representing more than 1,400 MW, and nearly 2,000 MW of installed geothermal capacity CanGEA members are truly world leaders in the development of geothermal energy. Although most of this activity takes place outside of Canada there is nevertheless an abundance of low hanging fruit in Canada’s geothermal sector.
With increased effort from provincial and federal governments Canada’s traditional geothermal resources are sure to play an important role in the country’s energy future. As the demand for renewable base-load energy increases so too will the push to develop Canada’s rich geothermal resources. CanGEA and its members aim to have 5,000 MW of clean geothermal power online by 2015 - that’s enough to power 3.7 million Canadian households. Add to this the overwhelming potential of Canada’s deep geothermal resources and the country may be entirely powered by this clean, renewable energy source. Though, as Canada joins other world leaders in developing its geothermal resources it must act prudently in first embracing traditional geothermal plays before adopting EGS technology. With such an abundance of naturally occurring geothermal hot spots there is no need to embark on EGS projects without first tapping Canada’s vast traditional geothermal plays.
About CanGEA: CanGEA is a national industry association that believes we can provide competitively priced, emissions free, renewable, base-load energy to Canadians and to U.S. export markets. CanGEA works on behalf of our members to facilitate the growth of geothermal power projects and promote publicly listed companies on the Canadian Exchanges.
Start the conversation online: Tell Us Your Thoughts
Contact: David Gowland
Policy Director, Canadian Geothermal Energy Association
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May 17, 2010
Hamilton: Geothermal could meet Canada’s power needs
Tyler Hamilton - Energy and Technology Columnist
Canada could technically meet all its electricity needs and dramatically lower greenhouse-gas emissions if it moved aggressively to develop enhanced geothermal power projects, according to the first comprehensive assessment of the country’s deep geothermal resources. The study, published online in the Journal of Geophysics and Geoengineering, reports on the potential of using enhanced geothermal systems (EGS) to tap hot temperatures kilometres below the earth’s surface as a way of generating clean electricity.
It found that the most promising Canadian sites are located in parts of British Columbia, Alberta and Saskatchewan at depths ranging from 3.5 to 6.5 kilometres. Drill deeper, however, and the potential extends right across the country – including parts of Ontario. “At 10 kilometres we can expect EGS temperatures in the 150 to 200 degrees C range across most of Canada, except some areas of the Canadian shield,” wrote Stephen Grasby, a geologist with the Geological Survey of Canada, and co-author Jacek Majorowicz, an Alberta-based geothermal consultant. “Given the widespread distribution of geothermal energy, and the high energy content, the potential geothermal resource in Canada is significant,” they concluded. The findings aren’t surprising – I’ve been pounding on this drum for several years now. But it’s encouraging to finally see it expressed in a peer-reviewed journal. Canada, shamefully, is the only country along the so-called Pacific Ring of Fire that has yet to switch on a conventional geothermal power plant.
The irony is that Canada is home to several of the continent’s leading geothermal power developers. Problem is they’re mostly developing in Nevada, California, Nicaragua, Iceland, Chile – everywhere except Canada, where no formal development program exists. Maybe now the federal and provincial governments will take the issue more seriously. This new Canadian study comes three years after the release of a groundbreaking U.S. study led by experts at the Massachusetts Institute of Technology. Their research suggested EGS in the United States could realistically supply about 100,000 megawatts of power generation capacity by 2050, assuming the proper policies and R&D investments were committed.
For comparison, 100,000 megawatts – or 100 gigawatts—is roughly 80 per cent of Canada’s current power generation capacity. It’s about one-twelfth of current U.S. capacity. And the MIT-led group predicted it could be built less expensively than building new nuclear plants or investing in carbon capture and storage technologies for coal plants. When the MIT-led study came out I lamented that Canada didn’t have similar research to spur development of “heat mining” projects on our own turf, particularly in Alberta where most of the electricity comes from coal-fired power plants.
I should clarify that not all geothermal power plants are created equally. Conventional geothermal projects, like those found in places such as California or Iceland, benefit from ideal rock conditions – that is, porous rock that water can penetrate. They also have naturally occurring hot-water reservoirs. EGS is more complex. These “enhanced” projects must be engineered to create the conditions required for generating power. Subsurface rock must be hydraulically fractured to create cracks that water can travel through. An outside source of water is also required, adding to the cost of the venture.
Under the EGS scenario, water is pumped into a well and forced to seep into cracks and pores in the rock, where the temperature is ideally above 150 degrees C. The water absorbs the heat in the rock and is pumped back to the surface through a return well. Heat exchangers then extract the heat from the water to create steam, which turns an electricity-generating turbine. The water is then pumped back underground as part of a continuous cycle.
The Canadian Geothermal Association believes Canada, if determined, could develop 5,000 megawatts of geothermal power by 2015 – and that’s just conventional geothermal with temperatures above 200 degrees C and wells less than three kilometres deep. This is the low-hanging fruit we’ve left dangling for decades. Add to the equation the new technologies that make EGS possible and geothermal power could play the kind of role that hydroelectric power has historically played in Canada, particularly in western Canada’s many hot spots. Grasby and Majorowicz estimate that 2 per cent of the entire resource could be recovered for electricity generation. It may sound like a small number, and even that could take many decades to develop, but don’t let that fool you.
“This would still provide a significant contribution towards Canadian energy consumption.”
Maybe it’s time we prove it.
Tyler Hamilton writes weekly about green energy and clean technologies. Contact him at .(JavaScript must be enabled to view this email address)
May 14, 2010
Nevada Geothermal Power Inc. Acquires Edna Geothermal Project at Nevada Lease Auction
Vancouver, B.C. (May 14, 2010), Nevada Geothermal Power Inc. (NGP), (TSX.V: NGP, OTCBB: NGLPF) announced today that it was the successful bidder in the May 11, 2010 Nevada State Bureau of Land Management lease sale on a 12 square mile (7,072 acre) parcel of land in the Pumpernickel Valley, Humboldt County Nevada.
The new Edna Geothermal Project is accessible by road and is located a few miles northeast of NGP's Pumpernickel Valley Geothermal Project, two miles south of the Interstate Highway 80, and nine miles west of the Valmy coal-fired power plant owned by NV Energy and Idaho Power. An existing 125 KV power transmission line crosses the northern part of the Edna leases.
The Edna geothermal prospect was identified by NGP in 2009. Field exploration and other research indicated a favorable geological and structural setting, significant evidence of past and present hydrothermal activity associated with extensional faulting, and a thermal anomaly significantly larger than previously recognized. Geochemistry analysis of geothermal brine collected from an undocumented hot well located within the newly acquired lease area suggests parent geothermal reservoir temperatures of 385°F - 397°F (196°C - 203°C). Temperature measurements within the same well to a depth of 1130 feet (345 meters) demonstrated a thermal gradient of 7F°/100 feet (128°C/km), indicating that commercial reservoir temperatures may occur within 5000 feet (1500 meters) of surface.
Brian Fairbank, President and CEO said, "This new acquisition solidifies NGP's land holdings within the Pumpernickel Valley. We are excited about the potential to develop the Edna Geothermal Project in tandem with the Company's more advanced Pumpernickel Valley Geothermal Project. NGP anticipates that significant cost savings can be realized at Edna since the Company already plans to have crews and drills in the vicinity through the next several years".
About Nevada Geothermal Power Inc.:
Nevada Geothermal Power Inc. is an emerging renewable energy producer and developer focused on producing clean, efficient and sustainable geothermal electric power from high temperature geothermal resources, in the United States. NGP currently owns a 100% leasehold interest in four properties: Blue Mountain, Pumpernickel, and Black Warrior, in Nevada, and Crump Geyser, in Oregon. These properties are at different levels of exploration and development. NGP estimates a potential of between 150 MW and 300 MW from its current leaseholds.
Nevada Geothermal Power Inc.
Brian D. Fairbank, P. Eng.
President & CEO
Investor Inquiries
Paul Mitchell
Nevada Geothermal Power Inc.
Telephone: 604-688-1553
Direct Line: 604-638-8784
Toll Free: 866-688-0808 X118
Email:pmitchell@nevadageothermal.com
This Press Release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as "anticipates," "believes," "estimates," "expects," "plans," "intends," "potential" and similar expressions. These statements reflect our current belief and are based upon currently available information. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance or achievements to differ materially from those expressed in or implied by such statements. We undertake no obligation to update or advise in the event of any change, addition, or alteration to the information catered in this Press Release including such forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
