Sierra Geothermal
Sierra Geothermal Power Corp (TSX.V:SRA) is a Vancouver-based geothermal company I wanted to start with partly because they’re local, but also because they’re industry leaders in geothermal power. CEO and President Gary Thompson is a P.Geo who is knowledgeable and passionate about the potential for geothermal. I first spoke to Gary Thompson a few months ago when I was writing a research piece about the geothermal industry and I was impressed then.
SRA has leases or options for leases on 17 projects in Nevada and California classified as either Tier 1 or Tier 2 projects. Tier 2 are later stage projects where significant exploration work has been done and they tend to be located close to infrastructure. Tier 1 projects represent less completed exploration work, but possibly greater upside potential. The projects total over 28,000 hectares of land and could potentially generate more than 250 MW of power. Production targets range between 2011 and 2013 on five of SRA’s focus projects.
News releases have recently highlighted Sierra’s Pumpernickel property, which the Great Basin Center for Geothermal Energy at the University of Nevada considers to be one of the top four undeveloped geothermal properties in Nevada. The property is a joint venture with Nevada Geothermal (TSX.V: NGP) where Sierra Geothermal is earning in for 50% of the venture on a schedule of payments in cash, exploration expenditures and stock that will be completed by the middle of December 2008. The joint venture creates risk protection for both companies, while the upside lies in estimates that the property could contain between 20 and 30 MW of power. 30 MW of power is enough to power 24,000 homes.
Sierra Geothermal’s share price as of today was $0.59. They have 67,996,788 shares issued for a market cap of approximately $54 million, about $11 million working captial and no debt.
A 2006 MIT study about geothermal lays out the potential for geothermal as a major renewable energy source. I’ve included the link here. It’s a really long, 372 page pdf document, but well worth taking a look at if you’re interested. Maybe the most exciting part, is that with some major R & D into how to tap the energy from dry rock, there is enough heat in the earth to power our needs for millenia to come. Sounds like the bleeding obvious doesn’t it?
Read the whole (372 page) MIT report on the future of geothermal here.
