News
Mar 31, 2010Ram Power announces fourth quarter and 2009 year end results
RENO, NV, March 31 /CNW/ - Ram Power, Corp. (TSX: RPG) (“Ram Power” or the “Company”), today reported its financial and operating results for the fourth quarter and fiscal year ended December 31, 2009. This earnings release should be read in conjunction with Ram Power’s MD&A and financial statements, which are available on the Company’s website at http://www.ram-power.com and have been posted on SEDAR at http://www.sedar.com.
Concurrent with today’s release, Hezy Ram, CEO of Ram Power, commented, “This has been an exciting start for Ram Power since its inception on October 20, 2009. The merger of the three predecessor companies, Polaris Geothermal Inc., Western Geothermal Corp. and Ram Power, Inc. along with an equity financing of CDN $179.4 million has provided our company with critical mass and a promising future. We have an established management team, an extensive inventory of geothermal properties and the balance sheet to develop them. We expect the first of our projects, the 36 MW San Jacinto Phase I expansion in Nicaragua to be on-stream in early 2011 and the second 36 MW Phase II expansion by year end 2011. In California, drilling of the 49.9 MW Orita project in the Imperial Valley started this month and successful drilling could allow construction to start in 2011. Other projects are under active investigation and we expect to be able to make further announcements during the year ahead.”
He continued, “While the year end loss of $37 million is significant, it is largely due to the many pre-acquisition costs incurred by Polaris and Western before the merger, which are non-recurring. Losses of such magnitude are unlikely to be encountered going forward this year. We look forward to being able to report substantial progress in subsequent quarterly releases.”
OVERVIEW
Ram Power’s results for the fourth quarter and for the twelve months ended December 31, 2009 were negatively impacted by one time charges originated from its subsidiary Polaris and from the business combination completed on October 20, 2009.
Included in the Company’s net loss are the following Polaris’ carry-over transactions: $1,239,000 in consulting fees related to Polaris financings; $1,275,870 (3 months - $566,416) of a write-down in Polaris’ investment in Geysir Green Europe GmbH; $10,715,350 (3 months - $1,801,107) in accretion charges related to Polaris’ CDN$27 million bridge loan and $10 million preferred share financings; $3,857,261 (3 months - $492,918) in foreign exchange losses due to the conversion of the CDN$27 million bridge loan financing by Polaris to US dollars; and $4,171,357 in interest and penalties.
Other transactions that had a negative impact on Ram Power’s earnings and are not expected to recur in 2010 include a foreign exchange loss of $5,102,672 on the conversion of Ram Power’s equity financing to US dollars and $1,305,780 in professional fees related to the business combination that closed on October 20, 2009.
Ram Power expects that without these one-time charges the Company will show improved results in 2010, while increasing its asset base at its geothermal power projects in Nicaragua and the United States.
OUTLOOK
Since October the Company has completed a project financing facility of $77 million for the Phase I expansion at the San Jacinto project in Nicaragua and construction is well underway and within budget for this 36 MW expansion. International Finance Corporation (IFC) is leading a syndicate to provide a project debt facility for the Phase II expansion phase to 72 MW. Construction of Phase II is planned to be conducted in parallel to Phase I. Planning and engineering for Phase II is already at an advanced stage. The Orita project is expected to go on line by the end of 2012 with 49.9 MW of generation capacity. The Company’s New River project and other potential projects in the Imperial Valley, California are currently under consideration. Permitting has commenced for the Clayton Valley project in Nevada that has a 32 MW power purchase agreement with NV Energy.
With respect to the Geysers property acquired through Western, the Company expects to make an announcement shortly about plans to develop this project in the most beneficial way for the Company. Other geothermal concessions will continue to be evaluated in Nicaragua and Chile during 2010.
For the year 2010, Ram Power expects to record revenue from the sale of power and carbon credits of approximately $6 million. Ram Power is still in the early development stage and 2010 will be characterized by extensive development and construction activities. Ram Power plans to spend approximately $178 million in 2010 to advance its geothermal projects. Ram Power has sufficient financial resources through a combination of its funds and the committed loan proceeds to meet all of its anticipated obligations in the year 2010.
Hezy Ram, CEO of Ram Power, concluded, “Ram Power’s mission is to be a world leader in geothermal power supply, and to this end, we are continuing on our course to bring our projects closer to their commercial operation and to bring clean, renewable energy to the people of North and Latin America.”
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 an interest in geothermal projects in the United States, Canada, and Latin America.
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