Contact Information: Further information: Ásgeir Margeirsson CEO Geysir Green Energy Tel. +354 665-2055
Geothermal Powerhouses Geysir Green Energy and Magma Energy Join Forces
Cross-Atlantic Cooperation Accelerates Geothermal Projects
| Source: Geysir Green Energy
REYKJAVIK, ICELAND--(Marketwire - July 24, 2009) - Geysir Green Energy (Geysir), the
Iceland-based geothermal company, and the Canadian geothermal company Magma
Energy Corporation (Magma) today announced an agreement whereby Magma will
acquire a 10.8 percent share in the Icelandic geothermal power company HS
Orka from Geysir. Under the same agreement, Magma will receive an option to
acquire about 5 percent of new shares in HS Orka by making a capital
infusion of US$15 million into the business by late 2011. This cash
infusion will accelerate HS Orka's project development.
The companies also announced a partnership agreement whereby they will work
together on selected geothermal projects in Iceland and internationally.
In today's transaction, Geysir sold Magma a 10.8 percent share in HS Orka
for just over ISK 3 billion (approximately US$25 million). Magma will hold
an option to purchase up to ISK 2 billion (approximately US$15 million) of
new shares in HS Orka.
After Magma's acquisition of the shares from Geysir and purchase of new
shares in HS Orka, Magma's consolidated share will be 16 percent, leaving
Geysir with 52 percent.
Magma Energy is a geothermal energy company with a goal of becoming a
global leader in its field. Magma owns and operates a geothermal power
plant in Nevada (the United States), and is involved in multiple geothermal
projects in the United States and South America. Magma's investment in HS
Orka and partnership with Geysir strengthen its operations as it gains
access to the experience and expert geothermal knowledge within those
companies.
Geysir has a strong position in the geothermal industry in Iceland as well
as in Germany, China, the United States and the Philippines. The company
aims to strengthen its Icelandic energy operations and utilize its
knowledge and expertise internationally wherever opportunities arise.
It is estimated that the energy needs of the world's population will double
over the next 50 years, and that the ratio of sustainable energy production
will grow at the expense of traditional energy sources.
Comments:
Ásgeir Margeirsson, CEO, Geysir Green Energy, said that this agreement is
an important step for the Geysir group of companies. The agreement empowers
HS Orka to push forward in developing a 100 MW extension to its geothermal
power plant. "Much of the power is sold under U.S. dollar contracts to a
large aluminum smelter that is currently under construction in Southwest
Iceland. HS Orka has a very strong business plan, much of which is related
to the supply of green electricity to the significant Icelandic aluminum
smelter industry. We are very happy to see that Magma has endorsed the HS
Orka business plan in such a significant manner."
Ross J. Beaty, founder, Chairman and CEO of Magma Energy, emphasized that
Magma is an energy company, not an investment company, and that all
investments are long-term. "Having seen for myself the amount of
specialization, knowledge and opportunities that exist for developing
geothermal energy in Iceland, collaborating with Geysir and HS Orka is
absolutely the right move for us at this juncture. This will most certainly
strengthen Iceland's energy sector both technically and financially."
About Geysir Green Energy
Geysir Green Energy (http://www.geysirgreenenergy.com), a leading
geothermal energy company in the renewable industry, participates in
exploration, development, construction and operation of geothermal
resources worldwide. Geysir seeks leading market opportunities in the
harnessing of geothermal energy and has invested around US$650 million in
geothermal businesses and projects around the world.
Building on its extensive experience from the Icelandic geothermal arena,
Geysir's objective is to help develop sustainable energy production over
the coming decades.
Geysir's main assets, after the Magma transaction, are a 55 percent share
in HS Orka (which will be 52 percent if Magma executes its option to buy
new shares and infuse US$15 million into the business) and a 100 percent
ownership of Iceland Drilling Ltd. Geysir has worked successfully at
developing geothermal heating utility projects in China and is undertaking
geothermal power projects in Germany, the United States and the
Philippines.
Enex, a subsidiary of Geysir, completed the construction of a 9.3 MW
geothermal binary power plant in El Salvador in 2009. The plant became the
first geothermal power plant completely designed and constructed abroad by
an Icelandic company.
Geysir is a founding shareholder of Keilir, an educational institution at
the university level that provides hands-on courses in mechatronics and
geothermal science in Iceland.
About Magma Energy
Magma Energy (http://www.magmaenergycorp.com), a Canadian geothermal energy
company, is actively engaged in operating, developing, exploring and
acquiring geothermal energy projects, and aims to become a global leader in
its field.
The company currently owns and operates a geothermal power plant at Soda
Lake in Nevada (the United States), and is involved in multiple geothermal
exploration and development projects in Argentina, Chile, Peru and the
Western United States. Magma, which is listed on the Toronto Stock Exchange
under the ticker symbol MXY, has exceptional financial capacity for
development of its projects.
Magma's founder and CEO, Ross Beaty, is a geologist and mining entrepreneur
with more than 37 years of experience in the international minerals
industry. Beaty founded and currently serves as chairman of Pan American
Silver Corp., one of the world's leading silver producers. Beaty has also
founded and divested a number of other public mineral resource companies
since 1985 including Regalito Copper Corp., Northern Peru Copper and Global
Copper Corp.
Magma was advised by Glacier Partners, a specialized advisory firm, and its
affiliate Capacent Glacier. The two companies focus on geothermal energy
globally and on mainstream corporate finance work in Iceland. Reykjavík Law
Firm acted as legal counsel to Magma, and Mannvit Engineering provided a
third-party evaluation of HS Orka's operations.
About HS Orka
HS Orka is a leading provider of geothermal electricity and heating in
Iceland. The company operates two geothermal plants, sells electricity and
hot water, and is developing several new geothermal power projects.
The capacity of the Svartsengi and Reykjanes geothermal plants is 175 MW
electric and 150 MW for space heating.
The electrical supply is partly sold to industrial users under power
purchase agreements denominated in U.S. dollars. HS Orka is adding 100 MW
to existing facilities in Reykjanes, which is scheduled to go online by
2012, and is developing an additional 150 MW in other areas.
Photos are available on
http://www.geysirgreenenergy.com/media-and-events/photo-gallery/