Ram Power reports net loss of $20.5m for 2010 and good outlook
Geothermal development company Ram Power Corp. reports annual results and a net loss of $20.5m for 2010 with a negative cash flow of about $14.4m. In its outlook the company continues its focus on San Jacinto and the development of its Geysers project in California.
In a release, “Ram Power, Corp. (TSX: RPG) reports its fourth quarter and audited financial and operating results for the fiscal year ended December 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 today’s release, Walt Higgins, Interim President and CEO of Ram Power, said, “Ram Power is currently in a much better position to execute its strategic business plan. We are taking positive steps to better control our business of developing, producing and selling geothermal energy through the engagement of resource experts and the addition of qualified professionals to the Company’s staff. We are very pleased with the results we have seen recently in the development of our San Jacinto resource, and further believe the steps we have taken are in the best interest of our Company and our shareholders.”
For the fiscal year ended 2010, the Company reported a net loss of approximately $20.5 million ($0.14 per share). On a cash basis, for the same period, the Company had a negative cash flow of about $14.4 million from operating activities and spent approximately $132.2 million on additions to geothermal properties and capital assets, including approximately $84 million on the Phase I and II San Jacinto-Tizate expansions, approximately $23 million on the Geysers Project, approximately $19 million on the Orita Project and $6.2 million on other development projects. At December 31, 2010, the Company had free cash of approximately $29.5 million, and long-term (non recourse) debt of approximately $68 million.
The events for the year ended December 31, 2010, and the subsequent events in the first quarter of 2011, continue to demonstrate management’s desire to deliver long term shareholder value through its extensive pipeline of projects.
The Company plans to continue to focus on the expansion of the San Jacinto Project. Based on current projections, the Company expects to incur additional expenses of approximately $175 million in 2011-2012 to complete Phase I and Phase II of the of the San Jacinto Project expansion. The Company has approximately $185 million of credit facilities and contingency reserves to cover the projected expenditures. The availability of the Phase II Credit Facility (approximately $160 million) is subject to increasing the certified resource from 59 MW to 82 MW (gross). The Company anticipates that its current drilling program will result in obtaining the necessary certified resource capacity to enable it to utilize the full available amount under the Phase II Credit Facilities. Should there be a timing difference between the certification of the resource to obtain access to the Phase II Credit Facility funding and projected project expenditures, the Company may seek alternative sources of funding.
For the year 2011, the Company expects to record revenue from the sale of energy generated from the Phase I expansion of the San Jacinto Project. Revenue from Phase I will go to supplement the continued construction and development of the Phase II expansion which is expected to be completed in the second quarter of 2012.
With respect to the Geysers property, the Company is in discussions with an engineering, procurement, and construction (“EPC”) contractor for the development of the 26 MW Geysers Project in Northern California and expects a final EPC contract in the second half of 2011. In addition to the recent announcement of the revised and amended PPA with the Northern California Power Agency (“NCPA”), the Company plans on executing a debt financing for the project in the third quarter of 2011.
Advancing of the 49.9 MW Orita Project in the Imperial Valley, California will continue in 2011. The Company plans to spend an additional $10.7 on drilling associated with the development of the resources.
Development will continue for the Company’s advanced exploration properties at Casita, Nicaragua and Clayton Valley, Nevada. Casita activities will include building additional infrastructure and the drilling of two slim hole wells to confirm the resource. Clayton Valley development will include continued surface exploration and permitting activities throughout 2011.
Antony Mitchell, Executive Chairman of Ram Power concluded, “While we have encountered some unique challenges and delays in the construction of the Phase I and Phase II expansions of our San Jacinto-Tizate 72 MW project, I am very pleased with the progress we have made to date and look forward to the commissioning of the first phase later this year. Our continued commitment to develop our Orita and Geysers properties in 2011 will bring us closer to our goal of building a large, sustainable, geothermal energy company.”
Source: Company release via Marketwire