News

Sierra Geothermal with discovery at Alum and financial results

Coil rig at Alum project site in Nevada (source: Sierra Geothermal Power)
Alexander Richter 20 May 2010

Sierra Geothermal Power Corp. announces that it has made a geothermal discovery at its 100% owned Alum project in Esmeralda County, Nevada. In addition, Sierra reports its Q1 2010 financial results and provides an operational update.

In a release by the company, “Sierra Geothermal Power Corp. announces that it has made a geothermal discovery at its 100% owned Alum project in Esmeralda County, Nevada. In addition, Sierra reports its Q1 2010 financial results and provides an operational update.

Alum Project: The geothermal discovery comes from Sierra’s slim well 26-19, which is considered to be a geothermal discovery well due to the levels of permeability and temperature encountered. The drilling of the slim well 26-19 concluded on May 14, 2010. The well was drilled to a maximum depth of 1,484 meters or 4,868 feet.

The preliminary bottom hole temperature of 146 degrees Celsius or 295 degrees Fahrenheit was recorded immediately after drilling stopped. Several zones of high permeability were encountered between 1,116 and 1,325 meters (3,663 and 4,349 feet, respectively). After coring through the 209 meter permeable zone, a geothermal water sample was air lifted and flowed for three days and samples were collected for analysis. Temperature measurements in the completed well will continue until thermal equilibrium is achieved.

A temperature profile on the previously drilled well 25-29 was recorded April 30, 2010, five months after drilling was completed. The temperature log returned a maximum of 130 degrees Celsius or 266 degrees Fahrenheit at 630 meters or 2,067 feet.

The cost for these wells is shared on a 50/50 basis with the US Department of Energy (DOE) under the 2009 Geothermal Technologies Program grant award. The total grant amount from the DOE for the Alum project was $5,000,000. The Alum project was acquired from Geo-Energy Partners 1983 Ltd in 2006.

“We are grateful for the financial support that we are receiving from the DOE in advancing our Alum project, as it has helped us make a discovery at Alum with less capital than we would have otherwise employed. Numerous people were employed during the drilling of these wells, showing that the DOE grant program is working. We look forward to advancing the Alum project to the next level which is drilling full sized production assessment wells,” said Gary R. Thompson, President and CEO of Sierra.

Q1 2010 Financial Results: For the first quarter ended March 31, 2010, Sierra reported a net loss of $1,436,583 or ($0.01) per share compared to a net loss of $428,231 or ($0.01) per share for the first quarter ended March 31, 2009. As of March 31, 2010, Sierra had cash of $4,459,286 and working capital of $3,053,202, compared to cash of $8,260,320 and working capital of $6,664,549 on December 31, 2009. The full text of Sierra’s unaudited financial statements and management’s discussion and analysis is available on the SEDAR website at www.sedar.com or at www.sierrageopower.com.

Reese River Project:  Sierra recently completed a review and analysis of new geological, structural, and geophysical data at its Reese River project in Lander County, Nevada. The integration of these new data sets into the Reese River conceptual model is the result of successful collaborations with the University of Nevada, Reno and the University of British Columbia. New data from detailed geologic mapping and joint 3D inversion modeling of magnetotelluric and Z-TEM data highlight an area of complex faulting coinciding with the change in trend of a major geologic structure in the area. This structurally complex area (the accommodation zone) may be a zone of enhanced permeability at depth and is of high geologic interest. Also, the recent temperature hole 23-03, which was drilled to a depth of 30 meters, returned a temperature gradient of 1,100 degrees Celsius per kilometer or 61 degrees Fahrenheit per 100 feet. This hole also lies within the inferred accommodation zone. Recent internally-derived resource estimates for Reese River, using a Monte Carlo model, indicates 70 MW of power potential. The increase is based on the recent step out drilling which Sierra believes has identified a thermal anomaly larger than previously delineated.

Silver Peak Project: During February/March 2010, core well 38-11 was drilled at Silver Peak to 1,649 meters or 5,409 feet. This well was the first deep well at Silver Peak. A recent stable temperature measurement recorded a bottom hole temperature of 103 degrees Celsius or 217 degrees Fahrenheit.

The costs for these wells are shared on a 50/50 basis with the US Department of Energy (DOE) under the 2009 Geothermal Technologies Program grant award. The total grant amount from the DOE for the Silver Peak project was $5,000,000.

Imperial Valley Properties and Nevada Land Sale Results: Sierra has been notified that the Imperial Valley (Salton Sea) lands in California, which comprise 3,442 acres, have been leased by the Bureau of Land Management (BLM) to Western Geothermal Partners, LLC. The Salton Sea lands are the last parcel of land to be acquired and paid for under the Cayley Geothermal and Western Geothermal 2006 agreement. Cayley Geothermal Corp. is a wholly owned subsidiary of Sierra. At the May 11, 2010 BLM geothermal land sale Sierra made the winning bids on 4,541 acres adjacent to its Reese River project, 1,880 acres at Sierra’s existing Howard Project and 2,877 acres in close proximity to its Alum project.”

Source: company announcement