News
Nov 16, 2009Magma Energy reports dramatic growth, new geothermal explorations in Q1
By: THE CANADIAN PRESS
VANCOUVER, B.C. - Magma Energy Corp. (TSX:MXY) says it is gradually acquiring shares in Iceland’s largest private geothermal power company and eventually hopes to become half-owner of the venture.
The investment in HS Orka was one of several initiatives discussed Monday by Magma’s chairman and chief executive Ross Beaty in a conference call to discuss Magma’s fiscal first-quarter results. Despite a loss of nearly US$2.7 million or one cent a share in the three-months ended Sept. 30, Beaty called it a “pretty good quarter” for Magma. During the same period last year, the Vancouver-based thermal energy producer reported a loss of $829,860, also one cent a share.
Beaty said Magma expects to acquire 8.6 per cent of HS Orca stock later this week, about two months later than expected. Magma plans to close the purchase of an additional 32 per cent of the Icelandic company in late November and three per cent more in March, bringing its total holdings to some 43 per cent. Magma has expanded rapidly since its initial public offering in July, including projects in Nevada and Latin America.
“Our Nevada and international exploration efforts are gearing up quickly, and we have already announced a new 140-megawatt geothermal resource discovery at our Maule project in Chile,” he said. “This is a major discovery, but we think it will get much bigger with further exploration.” The company developed seven explorations in Nevada during the period and opened two new projects in Nicaragua just after it ended.
“The real highlight of our quarter, however, was our completion of a successful IPO on July 7th, which raised $88 million net of cost,” Beaty said. “This gives us the financial horsepower to aggressively explore and develop the most promising of our properties for the next couple of years.”
Since Magma went public, geothermal resources have increased from 199-megawatts to 436-megawatts, nearly 150 per cent, Beaty said. “This is a pretty good start on our mission to build a great global geothermal power company by successful exploration, production and acquisition,” he added. Revenues from energy sales were just over $1 million in the quarter, the first three-month period of the energy producer’s 2010 fiscal year, the company reported. Magma generated no operating revenue for the same period a year earlier.
Magma Energy has one operating power generation plant, the Soda Lake operation in Nevada, and an extensive portfolio of exploration properties throughout the western United States and Latin America. “We now hold 161,000 hectares, or just over 400,000 acres, of geothermal rights at 27 properties in five countries,” Beaty said. “But of course its quality not quantity that counts and our big focus in 2010 will be to explore these holdings aggressively…and drop the lowest quality projects to focus on the best.”
Magma shares were up two cents at $1.84 in trading Monday on the Toronto Stock Exchange.
