E•BOOM CAPITAL: Ram Power Shares Fall on Delays in Nicaragua Project
Shares of Ram Power, Corp. (TSE: RPG.TO) were trading marginally lower at mid-session today after falling 20 percent Monday on news that the Reno, Nevada-based geothermal power developer is facing construction delays and additional costs related to its San Jacinto project in Nicaragua.
The company said Monday that a two-phase project to add 72 megawatts (MW) of geothermal power to the existing 10 MW operation at San Jacinto is three months behind schedule and that the delays will add approximately $20-$25 million to development costs that will paid for with a combination of equity and debt. In addition, the company expects to incur about $27 million in additional costs for exploration drilling for San Jacinto phase two.
Ram Power also said it has been necessary to raise $50 million in bridge financing to carry the company until it can complete enough exploration drilling at San Jacinto to demonstrate sufficient reserves to allow the company to access a $160 million project financing facility closed November 4, 2010.
Ram Power announced January 24 that it acquired an undivided 50 percent interest in the geothermal rights to 215 acres associated with the identified steam resource for the company’s development-stage Geysers geothermal project in northern California. The acquired property provided a portion of the steam to a 55 MW power plant operated by Pacific Gas and Electric until 1989. The remaining undivided 50 percent interest in the geothermal rights to the 215-acre property is being leased by a Ram Power wholly-owned subsidiary.
The company says it has a pipeline of projects totaling 634 MW in the U.S. (California, Nevada), Nicaragua, and Canada (British Columbia) for future development and has ambitions to become a world leader in geothermal power production.
Photo credit: Ram Power
DISCLOSURE: The writer has no positions in, or professional connections with, these companies.
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