Sierra Geothermal Power
Sierra Geothermal Power – in pursuit of a greener world with renewable energy
In the face of rising energy prices, the need for cleaner energy sources such as renewable energy and gains more eloquence. While the intent indeed is there among companies as well as powers that be alike, opportunities are few and far between due to myriad of reasons. This makes companies with operations and projects in the renewable energy space particularly interesting investment propositions.
Canadian Venture listed Sierra Geothermal Power Corporation (TSX.V: SRA), is one such company that we have been following for some time. The company is focused on geothermal exploration and development in North America and currently holds geothermal leases, or options to leases, on 17 different properties in Nevada and California. Spanning over more than 88,000 acres (880 sq km), these leases have a potential generation capacity of more than 400 MW of power.
SRA has had an eventful few months and has been busy with permitting, conducting transmission studies, negotiating power purchase agreements and drilling. The company also released 2Q2008 financial results. For the three and six months ended June 30, 2008, SRA reported a net loss of $955,676 or $0.01 per share and $1,672,579 or $0.02 per share, compared to a net loss of $519,764 or $0.01 per share and $962,263 or $0.02 per share for the same periods last year.
There is no reason for alarm however. The loss increased mainly due to an increase in stock-based compensation expense, which increased to $473,204 and $752,102 for the two periods from $154,799 for both 1Q and 1H2007!
During 2Q2008, the Silver Peak project has received an Environmental Assessment decision with a Finding of No Significant Impact from the U.S. Bureau of Land Management. The Company has also received two independent reports from GeothermEx Inc. which have significantly increased the resource estimates on its Barren Hills and Reese River projects.
The resource estimate at Barren Hills was found to be five times greater than originally assessed with a 90% probability of generating at least 55 MW and a 50% probability of supporting a plant of 117 MW. Reese River now has estimated 90% probability of generating at least 26 MW and 50% probability of supporting a plant of 58 MW. SRA’s top five projects now have a combined resource capacity of approximately 150 MW at the 90% confidence level and 320 MW at the 50% confidence level, enough to power approximately 120,000 to 250,000 homes. In addition, three shallow temperature gradient wells at Reese River had recorded temperatures between 96 and 125 degrees Celsius (194 – 257 degrees Fahrenheit).
Adding further to optimism, SRA was ranked in the Top 10 in the TSX Venture Exchange’s Clean Tech Sector, among TSX Venture Top 50 Emerging Companies.