Ormat finalises purchase of Alternative Earth Resources assets
Alternative Earth Resources Inc Website - Frontpage
Francisco Rojas
7 Aug 2014
Ormat Nevada Inc. closes purchase of Alternative Earth Resources assets in the Crump Geyser and North Valley geothermal project assets.
Alternative Earth Resources Inc. is pleased to announce that it has signed a definitive Purchase and Sale Agreement (“PSA”) with Ormat Nevada Inc. (“Ormat”), whereby Ormat will purchase AER’s Crump Geyser (50% interest) and North Valley geothermal project assets, and obtain an option, exercisable over a four (4) year period, to purchase certain of AER’s New Truckhaven geothermal leases for cash payments totaling US$1,500,000. The sum of US$1,490,000 is to be paid on closing of the transaction, and a further $10,000 is payable if and when Ormat exercises the lease purchase option. The PSA replaces a letter agreement with Ormat dated June 3, 2014, which was disclosed in a news release dated June 11, 2014.
AER has received a US $50,000 non-refundable deposit in respect of the PSA, and the transaction is subject to the approval of AER shareholders at a Special Meeting to be held on August 22, 2014, and the acceptance of the TSX Venture Exchange. The PSA, if approved, is expected to close on or about August 27, 2014.
AER had cash and cash equivalent assets of US$1.2 million as of March 31, 2014. If the approvals are obtained and the transaction closes, the benefits to accrue to AER include: an additional US$1,490,000 to the treasury; free up cash of US$175,000 that is currently pledged for geothermal well bonds; remove a liability for geothermal well abandonment costs of approximately US$450,000; and eliminate on-going geothermal lease payment obligations.
Source: Press Release on Alternative Earth Resources Inc. Website
