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EDC and Alterra discuss JV arrangement for Mariposa, Chile

Mariposa Drilling Site, Chile (source: Magma Energy)
Alexander Richter 7 May 2013

Philippine based EDC and Canadian Alterra Power are discussing a JV arrangement for Alterra's Mariposa project in Chile with an acquisition by EDC of a 70 percent stake in a farm-in arrangement.

Energy Development Corp. (EDC) from the Philippines is in discussions with Canadian Alterra Power Corp. to acquire a 70 percent stake in Alterra’s geothermal project at Mariposa, Chile.

The companies are currently firming up a joint venture agreement, which could be signed by both within the next three months.

EDC plans to use a similar farm-in arrangement that it signed with Australian Hot Rock Ltd, under which EDC acquired a 70 percent stake in four geothermal concessions by Hot Rock in Chile and Peru.

“We will farm in with our investments. But it’s a no-premium deal, which means that we’re not paying them a premium or upfront cost. We will just pump in cash in the company as needed. [Alterra Power] got the Mariposa concession, drilled some shallow wells and constructed roads and now EDC will be coming in to do the deep drilling activities,” Tantoco explained.

In October last year, EDC already signified its interest in Alterra Power’s geothermal concession in Chile and five of Alterra’s geothermal authorizations in Peru.

“The previous agreement signed last year between the two parties gave EDC the “exclusive right to conduct exploration and due diligence and the sole option to advance the projects to joint venture stage.” EDC is expected to invest in equity if the due diligence yielded favorable results.

EDC is racing against other foreign companies to build the first geothermal power plant in Chile as it aggressively pursues efforts to boost its operations globally.

EDC also owns three other geothermal exploration concession areas in Chile, namely Newen, San Rafael and Batea and is planning to pursue other prospective geothermal concession areas in that country.”

Source: Business Inquirer