News
Jul 28, 2010Magma Energy Comments on Recent Announcement by the Icelandic Government
VANCOUVER, July 28 /CNW/ - Magma Energy Corp. (TSX: MXY) is responding to comments that have been made by the government of Iceland at a recent press conference. Magma understands that the government has announced its intention to establish a committee respecting foreign investment into Icelandic energy companies. The government has also advised HS Orka that it has not made a decision on Magma's purchase of further shares in HS Orka.
The transaction to acquire Geysir Green Energy's remaining interest in HS Orka is the third in a series of transactions. Each transaction has been reviewed by the Committee on Foreign Investment established by the government of Iceland. The reviews have confirmed that the transactions are permitted by the provisions of the Act on Foreign Investment established by the government of Iceland. Magma is confident that the proposed transaction is in accordance with the laws of Iceland and intends to co-operate fully with the government.
About Magma Energy Corp.
Magma Energy Corp. is a global 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 a significant interest in two in Iceland.
For further information: Alison Thompson, Vice President, Corporate Relations, Magma Energy Corp., Phone: 604.646.1882, Email: .(JavaScript must be enabled to view this email address)
Jul 27, 2010
Magma Announces Closing of Public Offering of Common Shares & Exercise of Over-Allotment Option
Vancouver, B.C., Canada, July 27, 2010 - Magma Energy Corp. (TSX: MXY) (the "Company") has closed its previously announced public offering of common shares (the "Offering"). Pursuant to the Offering, the Company today issued 40,334,628 common shares at a price of $1.12 per common share, including 4,620,342 common shares issued upon partial exercise of the underwriters' over-allotment option, for aggregate gross proceeds of $45,174,783 and total proceeds, net of underwriting fees, of $43,305,629.
The Company expects to use the net proceeds from the Offering in connection with its previously announced acquisition of common shares of HS Orka hf, with the remainder (if any) to be used for working capital requirements and other general corporate purposes.
Raymond James Ltd. acted as the lead underwriter for the offering. The other members of the syndicate are National Bank Financial Inc., Cormark Securities Inc., Dundee Securities Corporation, Jacob Securities Inc., Mackie Research Capital Corporation, Salman Partners Inc., Wellington West Capital Markets Inc. and Canaccord Genuity Corp.
About Magma Energy Corp.
Magma Energy Corp. is a global 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 a significant interest in two 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 the closing of the prospectus offering. 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 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.
The Shares offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Jul 22, 2010
Magma Energy Files Final Prospectus For Offering
Vancouver, B.C., Canada, July 21, 2010 -- Magma Energy Corp. (TSX: MXY) announced today that in connection with its previously announced offering, it has filed a final prospectus with the securities regulatory authorities in each of the provinces of Canada, other than Quebec with respect to the issuance of 35,714,286 common shares of Magma at a price of $1.12 per share, for gross proceeds of $40,000,000. Closing is scheduled to take place on or about July 27, 2010.
In addition, Magma has granted to the underwriters an option to purchase up to an additional 5,257,142 common shares on the same terms as set out above to cover over-allotments, if any.
Raymond James Ltd. is the lead underwriter for the offering. The other members of the syndicate are National Bank Financial Inc., Cormark Securities Inc., Dundee Securities Corporation, Jacob Securities Inc., Mackie Research Capital Corporation, Salman Partners Inc., Wellington West Capital Markets Inc. and Canaccord Genuity Corp.
About Magma Energy Corp.
Magma Energy Corp. is a global 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 a significant interest in two 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 the closing of the prospectus offering. 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 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.
The Shares offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Jul 21, 2010
Sierra Geothermal Power Obtains Interim Order for Plan of Arrangement
Vancouver, British Columbia- Sierra Geothermal Power Corp. [TSX-V: SRA] (“Sierra”) and Ram Power, Corp. [TSX: RPG] ("Ram Power") are pleased to announce that the Supreme Court of British Columbia has issued an interim order authorizing Sierra to, among other things, call a special meeting of its shareholders to consider and, if deemed advisable, pass a special resolution approving the proposed plan of arrangement previously announced by press release on July 8, 2010. The proposed plan of arrangement, set out as an exhibit to the Arrangement Agreement dated July 7, 2010 between Sierra and Ram Power, contemplates that Ram Power will acquire all of Sierra’s outstanding shares in exchange for common shares of Ram Power effective upon closing of the arrangement, which will be scheduled to occur after shareholder approval is received. The terms of the proposed transaction have been previously announced in a press release dated July 8, 2010.
Sierra proposes to hold the special meeting of shareholders at 10:00 a.m. (Vancouver time) on August 31, 2010, at the offices of its counsel, Clark Wilson LLP, at 800-885 West Georgia Street, Vancouver, B.C. The record date for determining the holders of common shares of Sierra that will be entitled to receive notice of and to vote at the special meeting is July 27, 2010. The special resolution approving the proposed plan of arrangement must be approved by at least 66 2/3% of the votes cast by shareholders represented in person or by proxy at the special meeting.
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:
Ram Power, Corp.
Steven Scott
Director of Investor Relations
Phone +775-398-3711
Email: .(JavaScript must be enabled to view this email address)
www.ram-power.com
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
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 the statement about Sierra holding a special meeting of its shareholders at 10:00 a.m. (Vancouver time) on August 31, 2010. While this forward-looking statement 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 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.
Jul 19, 2010
U.S. GEOTHERMAL INITIATES $30 MILLION VENDOR FINANCED CONSTRUCTION AGREEMENT FOR SAN EMIDIO
TRADING SYMBOLS:
In the United States: NYSE Amex: HTM and in Canada: TSX:GTH
Boise,Idaho- July 19, 2010 (NYSE Amex: HTM, TSX: GTH)U.S. Geothermal Inc., a renewable energy company focused on the development, production and sale of electricity from geothermal energy, announced today that it has entered into an agreement for the engineering procurement and construction of a new 8.6 net megawatt ("MW") modular binary cycle power plant at its San Emidio project.
TAS Energy Inc. of Houston, Texas through a FORTUNE 500® engineering, procurement and construction company ("EPC Contractor") will manufacture the plant. The agreement calls for the EPC Contractor to provide a non-recourse project loan for the $30 million construction capital together with an Engineering, Procurement and Construction services contract for Phase 1 of the San Emidio project in northern Nevada. The construction loan is expected to be repaid with long term financing from available sources such as the Section 1705 loan guarantee program from the U.S. Department of Energy ("DOE") which we expect to apply for in the near future. Under the terms of the agreement, the parties have established an exclusivity period during which final terms and conditions of certain definitive agreements will be negotiated.
"This is a fully financed, turnkey engineering, procurement and construction arrangement," said Daniel Kunz, President and CEO of U.S. Geothermal Inc. "We are excited to get construction started this year, which will insure that our 35 net MW San Emidio development project qualifies for the special 30% Investment Tax Credit cash grant."
The project will construct a new water-cooled binary cycle power plant with an estimated output of 8.6 net MW of renewable baseload electricity. No well drilling is required for Phase 1 since production and injection wells are currently in use by the existing San Emidio power plant which will be replaced with the new plant. The anticipated Phase 1 commercial operations date is 4th quarter of 2011.
The $200 million San Emidio project is a planned two-phase development. The $30 million Phase 1 is planned at 8.6 MWs net and the $170 million Phase 2 is planned at 26.4 MWs net. Phase 2 is expected to be completed in late 2013, subject to satisfactory completion of new well drilling, a transmission upgrade and obtaining the required permits. Phase 2 reservoir resource expansion efforts are already underway using funding assistance from a $3.77 million DOE Innovative Exploration Grant awarded to U.S. Geothermal in 2009. Approximately 3 MWs of the Phase 1's output is sold through 2017 under the terms of an existing power purchase agreement ("PPA") with Sierra Pacific, a subsidiary of NV Energy. U.S. Geothermal Inc. is currently negotiating with a number of interested parties for a new 35 MW PPA for the project.
About U.S. Geothermal Inc.:
U.S. Geothermal Inc. is a renewable energy development company that is operating geothermal power projects at Raft River, Idaho and San Emidio, Nevada. USG Oregon has an approved power purchase agreement with Idaho Power Company and has received a conditional commitment for a $102.2 million loan through the Department of Energy Section 1703 loan guarantee program for the development and construction of the Neal Hot Springs project.
FOR ADDITIONAL INFORMATION PLEASE CONTACT:
Please visit our Website at: www.usgeothermal.com
Saf Dhillon - Investor Relations
U.S. Geothermal Inc.
Tel: 866-687-7059
Fax: 208-424-1030
.(JavaScript must be enabled to view this email address)
The information provided in this news release may contain forward-looking statements within the definition of the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995, including statements regarding the anticipated development of San Emidio, including financing, megawatt output and schedule. These statements are based on U.S. Geothermal Inc.'s current expectations and beliefs and are subject to a number of risks and uncertainties that can cause actual results to differ materially from those described, including but not limited to, completion of the definitive agreements with vendors, application for and approval of long-term financing from the DOE. Readers are cautioned to review the risk factors identified by the company in its filings with Canadian and US securities agencies. Forward-looking statements are based on management's expectations, beliefs and opinions on the date the statements are made. U.S. Geothermal Inc. assumes no obligation to update forward-looking statements if management's expectations, beliefs, or opinions, or other factors, should change.
The NYSE Amex and the Toronto Stock Exchange do not accept responsibility for the adequacy of this release.
Jul 12, 2010
Magma Energy Corp. Announces Prospectus Offering
All amounts in CDN dollars. Not for distribution to UNITED STATES news wire services or dissemination in the United States.)
Vancouver, B.C., Canada, July 12, 2010 - Magma Energy Corp. ("Magma" or the "Company") (TSX: MXY) is pleased to announce that it has filed a preliminary short-form prospectus in connection with a proposed marketed offering ("Offering") of approximately $40 million of common shares ("Shares") at a price of $1.12 per share. In addition, Magma has also granted the underwriters an option, exercisable in whole or in part, up to 30 days following the closing of the Offering to increase the Offering by up to an additional 15% of the number of Shares sold pursuant to the Offering to cover over-allotments and for market stabilization purposes. The Offering will be managed by a syndicate of underwriters led by Raymond James Ltd.
The net proceeds from the Offering are intended to be used for Magma's acquisition of 52.35% of the outstanding shares of HS Orka hf from Geysir Green Energy, as well as for working capital and general corporate purposes. Closing of the Offering is expected to occur on or about July 27, 2010.
The Offering is being made in all provinces of Canada, excluding Quebec, and is subject to the approval of applicable securities regulatory authorities. The Shares offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About Magma Energy Corp.
Magma Energy Corp. is a global 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 a significant interest in two 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)
Jul 09, 2010
Magma Energy Announces Credit Agreement
(All amounts in CDN dollars and all MW according to the Geothermal Reporting Code)
VANCOUVER, July 9 /CNW/ - Magma Energy Corp. (TSX: MXY) announces that on July 5, 2010, the Company entered into a credit agreement (the "Credit Agreement") with Mr. Ross Beaty, the Company's Chairman and Chief Executive Officer, pursuant to which the Company is able to borrow up to $10,000,000 to pay amounts coming due by the Company to Geysir Green Energy ehf respecting the acquisition of shares of HS Orka hf, and to fund general working capital requirements of the Company. Any advances under the Credit Agreement are repayable on the earlier of twelve months from the date of the initial advance, a change of control of the Company or on a default by the Company. Interest at the rate of 8% per annum, compounded daily, is payable monthly commencing on July 30, 2010. In addition, a standby fee in the amount of 1% of the credit facility and a drawdown fee in the amount of 1.5% of the amount advanced is payable in cash. As of the date of this news release, the principal amount of the Credit Facility has been advanced to the Company to be used in connection with the acquisition of shares of HS Orka hf.
About Magma Energy Corp.
Magma Energy Corp. is a global 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 a significant interest in two in Iceland.
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 2016. HS Orka's 75 MW Svartsengi plant began production in 1977 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.
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 a further 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 a further 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.
For further information: Alison Thompson, Vice President, Corporate Relations, Magma Energy Corp., Phone: 604.646.1882, Email: .(JavaScript must be enabled to view this email address)
Jul 07, 2010
CanGEA in the Media - “It’s all in the Code”
It's All in the Code
First came a standardized code, then the project database.
The Canadian Geothermal Energy Association (CanGEA) recently released its CanGEA Member Projects Database [3], about five months after it established a code that basically answered the question: what does a megawatt of geothermal energy look like?
"Really, it was the Wild West out there," said Brian Toohey, co-chair of the code committee of the CanGEA. "Especially when you're dealing with a subsurface resource. When you look at a wind turbine or solar, you know what you're getting."
Toohey said that different evaluation methods and reporting standards created uncertainty in the market. And with the geothermal industry having $1 billion in market capitalization on the Toronto Stock Exchange, that wasn't a trivial matter.
"We wanted to make sure that the market understood that one megawatt in Iceland is the same as one megawatt in Canadian British Columbia," Toohey said. The code and project database work in tandem.
The intent is to view the resource similar to the way Canadian federal securities regulators quantify mining or oil and gas reserves, where scandals had occurred.
Right now, the code is the industry's effort at self-regulation. In 2011, acceptance of the standards will be mandatory for CanGEA membership. "We're not trying to be heavy-handed in this. We are looking for feedback, as it's a living document," he said.
Toohey said credit needs to be given to the Australian industry, which had the first standardized reporting system. That resource base is different than many others, as they work with more enhanced geothermal systems. The Canadian resource base is more traditional.
The report, the first of its kind, outlines all the various CanGEA member projects under development around the world. Besides the technical analysis, economic, marketing, environmental, social, legal and regulatory factors are all considered in a site evaluation.
According to the report, CanGEA members are currently working on more than 70 projects under development representing more than 1,400 megawatts, and nearly 2,000 megawatts of installed geothermal capacity.
And as the industry grows as its companies hope, the code and database set the standards.
The editorial staff at RenewablesBiz.com is passionate about exchanging ideas and dedicated to promoting ongoing conversation about renewables and sustainable energy issues. We invite you to join and contribute to our online community. If you have an idea for an article or editorial contribution, please contact me via email, .(JavaScript must be enabled to view this email address) , or phone, 860.633.0090.
The Canadian Geothermal Energy Association has inventoried its members' worldwide resources using the standardized code it is developing.
Source URL: http://www.renewablesbiz.com/article/10/06/its-all-code
To learn more about The Canadian Geothermal Code for Public Reporting register to attend the half day workshop and gain insight and direction from qualified person's in the industry and the Co Chairs of the Canadian Geothermal Code Committee - August 8, 2010. To Register: Click Here
Jun 30, 2010
Register Now! - CanGEA‘s 3rd Annual Geothermal Energy Conference - Special Rates Available
The Canadian Geothermal Energy Association (CanGEA) invites you to attend
CanGEA’s 3rd Annual Conference and Trade Show
August 8 - 10, 2010.
This is an exciting networking event which will welcome delegates both nationally and internationally to explore the Canadian geothermal energy market and is designed to bring together some of the industry’s leading players, policy makers in geothermal.
Last year’s event was the largest gathering of geothermal industry and researchers in Canada in over 20 years, (with this year’s event slated for an even larger attendance). CanGEA has created a forum for Presidents; CEO’s and decisions makers to network with key policy makers and industry providers. With a world class list of speakers and key industry players in attendance, this Conference and Trade Show is a must.
Due to the high levels of expressed interest in geothermal and renewable energy – and relevant activity in the industry i.e. Schlumberger’s acquisition of member GeothermEx, Inc. and the proposed merger between members Sierra Geothermal Power Corp. and Ram Power Inc. (All attendees) and merging of BC Transmission Corp and BC Hydro (BC Hydro – is confirmed as guest speakers & an event sponsor) this event will prove to be both pertinent and insightful.
To Register: Click Here
To View Agenda: Click Here
Reduced rate hotel accommodations available until July 5th for details: Click Here
Limited Time Offer – Special Conference Rates Available
Jun 30, 2010
Nevada Geothermal Power Inc. - Update
Vancouver, B.C. (June 30, 2010), Nevada Geothermal Power Inc. (the "Company") (TSX.V: NGP, OTCBB: NGLPF) is pleased to provide the following update on its activities.
Blue Mountain, Faulkner 1 Geothermal Plant Output:The Company is pleased with the performance of the plant since the re-design and installation of the new electrical cable system. In April and May 2010, the first full months of operation since electrical repairs were completed, the average net plant output was 38 MW, plant availability was 99%, and gross revenue was US$4.2 million (June performance is similar). Operations during the period have proceeded without incident.
The Faulkner 1 plant is currently operating at 38 MW (net) due to its current selection of the supply amount under the Power Purchase Agreement with Nevada Energy (the "PPA"). The Company intends to seek an increase of the supply amount in the fourth quarter of this year. Factors which will determine the amount of the supply amount increase include connection of production well 44-14, further optimization of injection, and available cooling water supplies.
The Company intends to increase production from the Faulkner 1 plant to 45 MW (net) through an optimization program during the remainder of 2010. Funds necessary for this program will be made available from a drilling reserve fund established as part of the John Hancock financing (see below).
Development Plan for Blue Mountain: The Company will conduct further confirmation drilling to establish additional resources for production and to develop new areas for injection in order to enhance overall reservoir performance.
The Faulkner 1 plant currently uses injection wells completed into a deeper, hotter western segment of the Blue Mountain reservoir. These injection wells communicate closely through fractures with the existing production well field and have the potential to cause temperature decline over the long term. As new injection wells are drilled at targeted sites on the property, such western injection will be diminished, thereby allowing for sustained higher production at the Faulkner 1 plant and for additional resource to be developed for expansion.
The Company's development plan incorporates establishing new injection areas and ultimately the conversion of selected existing injection wells into production wells for a Phase II plant. Existing western injection wells (61-22, 58-11, 57-15 and 55-15) are connected to the central Faulkner 1 plant by insulated pipelines and can be readily converted into production for the Phase II plant. In the event that the Company's plan to develop new injection wells is successful, the re-configured well field would result in an immediate increase in production capacity and new production well locations which will allow for expansion of the existing production core. The Phase II plant has a planned capacity of 25 MW (net) bringing the total possible production capability from the field to approximately 70 MW (net).
Senior Debt Financing:The conditional Department of Energy ("DOE") loan guarantee approval, received on June 15, 2010, is a major milestone and the Company expects to complete final documentation and approvals to close the US$98.5 million financing with John Hancock in the near future. The blended interest rate, based upon the long term US Treasury rate and determined at the time of closing, would be approximately 5% based on today's US Treasury rates. Loan proceeds will be used to partially pay down the existing TCW mezzanine debt, to fund an interest reserve account (approximately $5.5 million), a drilling reserve account (approximately $8.4 million), and other costs.
GeothermEx Inc., an independent consultant, has performed reservoir modeling for the Blue Mountain geothermal field to support the due diligence work for the senior debt financing. The modeling considered several scenarios including a base-case of the existing production and injection wells at Faulkner 1 with no further drilling through the 20-year term of the loan. The base-case model confirms that the Company can meet its PPA commitments without further optimization drilling by producing power in the range of 36 MW in the short term and allowing power production to decline at an estimated rate of 2.5% per annum over the 20 year contract period. The Company anticipates that its active and ongoing program of reservoir optimization will sustain Faulkner 1 production at higher levels than modeled in the base-case. The Company intends to further develop injection capacity, (as described above) using funds provided in the John Hancock drilling reserve fund to exploit the full potential of the wells that have already been drilled, thus maximizing income and paying down debt as fast as possible.
The Company believes that the pace of optimization of Faulkner 1 compares favourably to other geothermal production sites.
Project Eligibility for ITC Grants:The Company is also turning its attention to performing work at the Crump Geyser and Pumpernickel Projects prior to the end of 2010, in order to have them qualified for 30% ITC/Tax Grants in 2013.
At Pumpernickel a large amount of detailed work has been completed over the past five (5) years to define production drill targets. Several hot springs with temperatures up to 185° F (85°C) issue from the Pumpernickel fault scarp along the west side of the valley. Seismic surveys provide images of the Pumpernickel fault and several parallel faults in the valley extending to great depths. Geochemistry indicates that the reservoir temperature could be greater than 330°F (165°C). A production test well drilled in 1974 intersected the upper reaches of the geothermal system in the Pumpernickel fault at a depth of 3000 feet. The Company has completed all permitting for three deep production test wells designed to intersect the target reservoir at around 5000 feet.
At Crump Geyser, many hot springs occur along the west side of the Warner Valley pull-apart rift structure. Hot spring chemistry indicates a reservoir temperature of approximately 300°F (150°C). In 2010, magnetic and gravity surveys have been completed to augment surface mapping and define structure. Strong subsurface conductors that have been outlined in electrical resistivity surveys are believed to reflect the geothermal reservoir within the rift underlying the valley. Ten (10) temperature gradient holes are permitted and will be drilled under a matching fund program with DOE (US$1.7 million grant) and permits for two (2) reservoir confirmation wells and three (3) production test wells are pending.
Further work is planned at Black Warrior with DOE funding and at the newly acquired Edna Project.
About Nevada Geothermal Power Inc.:
Nevada Geothermal Power Inc. operates the 49.5 MW Faulkner 1 geothermal plant in Nevada. It is a growing, renewable energy 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 five properties: Blue Mountain, Pumpernickel Valley, Edna Mountainand Black Warriorin 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
http://www.nevadageothermal.com
Investor Inquiries:
Paul Mitchell
Nevada Geothermal Power Inc.
Telephone: 604-688-1553 X118
Direct Line: 604-638-8784
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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.
