Canadian Caldera Geothermal Inc. eyeing an IPO in 2009 or early 2010

Alexander Richter 9 Jul 2009

Caldera Geothermal Inc. aims to go public as early as year-end as it seeks capital to grow in the budding alternative energy sector. The company plans to acquire geothermal properties with any proceeds from a placement and an IPO later.

Reported in Canada, “Caldera Geothermal Inc., a geothermal exploration company, aims to go public as early as year-end as it seeks capital to grow in the budding alternative energy sector.

Caldera’s comments came as Canadian geothermal company Magma Energy Corp. (MXY/TSX-V) raised $100 million in an initial public offering that closed on Tuesday and showed new renewed optimism in the sector that has been hobbled by the credit markets crisis.

“We are seeking capital now to acquire” new properties, said Richard Zehner, president of Caldera. “We aim to go public by the end of the year or in the first quarter next year.” Executives at the Toronto-based company said they are working on a private placement led by Foundation Markets, a Toronto-based boutique investment bank and company shareholder, as they seek capital to buy new geothermal properties.

Geothermal and other renewable energy sources are being tapped as part of an effort to meet growing global electricity consumption with power sources that emit less carbon dioxide than fossil fuels such as coal or oil.

Geothermal energy taps into heat sources typically situated near geological fault lines to heat water to operate power generating turbines. Underground temperatures can range from slightly below room temperature just below the surface to more than 5,000C at the Earth’s core.

Proponents say that unlike solar or wind generation, geothermal power provides uninterrupted electricity supply 24 hours a day.

Canada’s alternative energy sector is showing signs of a budding recovery as companies resurrect financing deals and public offerings that withered in the credit markets crisis. The sector is also getting a boost in the United States under the Obama administration’s stimulus plan that includes provisions such as a tax credit for new geothermal power plants through 2013.

Mr. Zehner said the company’s strategy is to seek out new promising geothermal projects in the western United States to develop, put into joint ventures or sell off to power producers.

About one-third of the world’s geothermal power is situated in that region and was discovered during oil and gas exploration projects. Caldera has one project in Nevada with the potential to produce between 19 megawatts and 49 megawatts of power.

It hopes the private placement will help it identify and acquire four or five others in the near term, and that going public will allow it to expand around the end of the year.

The costs of bringing geothermal-generated power online are seen between US$3-million and US$4-million per megawatt. “We are going grassroots, where no one else thinks these projects are,” Mr. Zehner said.”

Source: Financial Post