Nevada Geothermal Power Inc. (NGP) (TSX.V: NGP, OTCBB: NGLPF) has secured the rights to purchase geothermal leasing rights to public and private lands in California owned by Iceland America Energy, Inc. (IAE) for US$4.15 million.
The companies signed an agreement giving NGP the exclusive right to purchase 100% ownership of IAE’s geothermal assets comprised of the New Truckhaven, East Brawley and South Brawley Projects in the Imperial Valley, Southern California.
NGP will pay US$100,000 in cash and the balance in NGP shares having a deemed value of C$0.65. Reykjavik Energy Invest hf, a subsidiary of the City of Reykjavik’s geothermal utility Orkuveita Reykjavikur (Iceland), is the majority owner of IAE with a 83.7% interest and will thus become a significant shareholder of NGP. The deal is expected to close by March 31, 2011.
The Imperial Valley is one of the world’s premier geothermal areas with highly productive, high temperature geothermal resources occurring over a large area in an active structural belt. Existing power plants operated by Cal Energy and Ormat Inc (NYSE: ORA). have an aggregate capacity of approximately 560 MW. Among other current projects in the region, Energy Source is constructing the Hudson Ranch 49.9 MW geothermal power facility and Ram Power (RAMPF.PK) is drilling production test wells at their 50 MW Orita geothermal power project.
The New Truckhaven and East Brawley properties are advanced stage projects. NGP believes that a 30-35 MW steam flash or binary power plant can be developed for the low-salinity New Truckhaven resource by the end of 2013 using conventional technology. At East Brawley, commercial productivity has been demonstrated in several deep wells. Ram Power’s current drilling program is sited immediately north of NGP’s to be acquired East Brawley leases. NGP will commence work for power plant scoping studies, well permits, transmission line access and water supply for both the New Truckhaven and East Brawley projects.
Nevada Geothermal Power Inc. operates the 49.5 MW Faulkner 1 geothermal plant in Nevada. The company currently owns leasehold interests in five properties: Blue Mountain, Pumpernickel Valley, Edna Mountain and North Valley in 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.