Ram Power reports loss of US$4million for Q1 2010
Ram Power provides financial results for Q1 of 2010 with a loss of US$4million and update on debt financing discussions for its San Jacinto-Tizate project in Nicaragua and other projects of the company in the U.S, Canada and Chile.
In a summary release, “Ram Power, Corp. reported its financial and operating results for the first quarter ended March 31, 2010. This earnings release should be read in conjunction with Ram Power’s MD&A and financial statements, which are available on the Company’s website at www.ram-power.com and have been posted on SEDAR at www.sedar.com.
Concurrent with the release, Hezy Ram, CEO of Ram Power, said, “In keeping with our business plan, the Company is continuing the process of consolidating its operations as a result of the October 2009 business combination. The construction at our San Jacinto-Tizate project proceeds both on budget and on schedule. The Company commenced drilling in Nicaragua and California, entered into new geothermal leases in the United States and began negotiations with relevant parties to accelerate development of some of its properties. We also drew down the first amount under the $77 million credit facility for the San Jacinto Phase I expansion and have begun the negotiation process for the Phase II expansion’s financing.”
Mr. Ram continued, “The financial results for the quarter were in line with our expectations, and we continue to make great strides in our Company.”
The Company’s $4,038,323 loss is the result of a decrease in revenue of $391,119 and an increase in expenses of $3,523,861. The decrease in the Company’s revenues is the result of the existing 10MW project in Nicaragua being taken off-line for approximately two weeks due to the continuing construction of the San Jacinto Phase I and II expansions and a 2009 recovery of revenues earned in 2005. The $3,523,861 increase in expenses is primarily the result of $2,201,138 of compensation expenses related to the Company’s stock option grant to its directors and officers in October 2009. The balance is attributed to additional general and administrative expenses related to the larger corporate infrastructure subsequent to the business combination in October 2009. The increase in expenses was partially offset by a decrease in direct costs of $94,031 due to reduced energy production.
Outlook: Ram Power is currently in negotiations with several lenders to provide a project debt facility for the Phase II San Jacinto-Tizate expansion stage to 72 MW which is expected to close in third quarter 2010. Construction of Phase II is being conducted in parallel to Phase I. In addition, Ram Power will be actively developing its nearby Casita project for which the Company has entered into a letter of intent with the local utility to sell up to 157 MW of power. The Company’s power purchase agreement with Southern California Edison for the Orita project was recently approved by the California Public Utilities Commission. The Company’s New River project and other potential projects in the Imperial Valley, California are currently under various stages of development. Work continues with the Imperial Irrigation District to advance a 50 MW geothermal project pursuant to a recently executed letter of intent and permitting has commenced for the Clayton Valley project.
With respect to the Geysers property, the Company expects to make an announcement shortly about its plans to develop this project. Other geothermal properties will continue to be evaluated in the United States, Canada and Chile during 2010.
Hezy Ram, CEO of Ram Power, concluded, “We are continuing on our course to bring our projects closer to their commercial operation and to bring clean, renewable energy to the people of North and Latin America.”
Source: Company release via MarketWatch