| November 27, 2008 |
| Sierra Geothermal Power Reports Q3 Financials and Increases Ownership in Cayley Geothermal to 83 Percent |
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 27, 2008) - Sierra Geothermal Power Corp. (SGP) (TSX VENTURE:SRA) today released financial results for its third quarter ended September 30, 2008.
Financial Overview
As previously disclosed, SGP changed its year end to December 31 from October 31, effective December 31, 2007. References to the third quarter 2008 and the comparable period of 2007 are for the three months ended September 30, 2008 and October 31, 2007, respectively.
Gary R. Thompson, President and CEO of SGP, said: "As I stated previously, SGP is aggressively pursuing its strategy of obtaining strategic joint venture partners to fund development of its Tier 1 properties. The current capital markets aside, many factors favor geothermal development. The new US administration plans to invest $150 billion over the next ten years to accelerate the clean energy sector and will introduce carbon cap-and-trade to reduce greenhouse gas emissions 80 percent by 2050. The demand for clean, baseload power remains strong and many utilities cannot acquire enough geothermal power to fulfill this need.
As of September 30, 2008, SGP's cash and term deposits totaled approximately $4.9 million with no debt. We believe this is a sufficient amount of capital to carry the company through these difficult times. Until SGP has secured additional capital on acceptable terms, we will be extremely prudent with our existing cash resources. However, we still have sufficient funds to continue minimum exploration (non-drilling) and permitting work on our properties."
For the three and nine months ended September 30, 2008, SGP reported a net loss of $571,949 or $0.01 per share and $2,244,528 or $0.03 per share, compared to a net loss of $351,167 or $0.01 per share and $1,385,125 or $0.03 per share for the three and nine months ended October 31, 2007. The increase in the net loss during the three and nine months ended September 30, 2008, compared to the three and nine months ended October 31, 2007, was primarily due to respective increases of $94,640 and $597,714 in stock-based compensation expense and respective increases of $118,130 and $313,557 in salaries, wages and benefits.
For the three and nine months ended September 30, 2008, SGP capitalized exploration expenditures of $746,956 and $4,543,415 compared to $1,449,980 and $4,400,841 exploration expenditures capitalized during the three and nine months ended October 31, 2007.
As at September 30, 2008, SGP had working capital of $4,731,757 compared to working capital of $10,676,587 as at December 31, 2007.
The full version of SGP's unaudited interim financial statements and management discussion and analysis report is available on the Company's website at www.sierrageopower.com and on SEDAR at www.sedar.com.
Third Quarter Highlight
- SGP received notice from Western Geothermal Partners, LLC that it has satisfied all requirements for a 100 percent interest in the Reese River geothermal power project in Lander County, Nevada. Under the terms of the exploration agreement, SGP was required to meet various thresholds of option payments and work program expenditures totaling US$5,250,000. SGP has the option to acquire Western Geothermal's one percent gross royalty.
Pursuant to the fundamental acquisition of Cayley Geothermal Corp. (Cayley) dated November 21, 2006, SGP will acquire 100 percent by issuing 18,000,000 shares over a three-year period. On November 21, 2008, SGP increased its position by an additional 32.24 percent interest to hold a total of 83 percent interest in Cayley through the issuance of 6,000,000 common shares, of which 4,004,472 common shares were issued to common directors of SGP and Cayley. SGP will acquire the remaining 17 percent of Cayley shares through the issuance of 3,220,548 common shares by November 21, 2009.
About Sierra Geothermal Power Corp.
SGP is a Vancouver-based renewable energy company focused on the exploration and development of clean, sustainable geothermal power. SGP's 17 projects comprise a total of over 90,000 acres of geothermal land assets in Nevada and California. The company intends to advance the development of its portfolio of projects through a combination of equity and/or joint ventures. To find out more about Sierra Geothermal Power Corp. (TSX VENTURE:SRA) visit our website at www.sierrageopower.com.
On behalf of the Board of Directors
Gary Thompson, P.Geo, President & CEO
This news release contains forward-looking statements that are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected on the basis of such forward-looking statements. Such forward-looking statements are made based upon management's beliefs, as well as assumptions made by, and information currently available to, management pursuant to the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. | |