(All amounts in US dollars unless otherwise stated)
VANCOUVER, June 14 /PRNewswire-FirstCall/ - Magma Energy Corp. (TSX: MXY) is pleased to provide an update on its activities at three of its Nevada projects. At the Soda Lake operation, the Phase 1 Expansion program is on-going with further field optimization activities and new drilling planned to increase the plant output to its nameplate capacity of 23 MW from its current 13.5 MW. Costs remain well under the initial budget of $18.2 million, with $14 million spent as of the last quarter. These costs are expected to be qualified expenditures for the 30% U.S. Treasury Department Energy Grant cost recovery program.
The deep well drilled last year, 41B-33, is midway through a 28 day injection test to determine its potential to contribute to the full field water re-injection strategy. Concurrent with this test, the well's shallow production zone that was encountered during the initial drilling is being evaluated as a future producer to the plant. A new production well, 25A-33, is expected to begin drilling at the end of June to a target depth of 4,000 feet. Drilling pad preparation is underway at the site and a drilling rig has been contracted. Results from the drilling and subsequent testing of 25A-33 are expected in August.
The Phase 2 Soda Lake expansion has also commenced. Phase 2 targets an initial 14 MW online by the end of 2013, bringing the field output to 37 MW. The entire Soda Lake field has a combined Indicated and Proved gross output potential of 61 MW based upon the Geothermal Reporting Code. Seismic permits have been received and a seismic program will begin shortly, with temperature gradient wells expected to be drilled in late summer. Last year, Magma won a $5 million Department of Energy Innovative Exploration and Drilling grant for this work and is receiving funding from the grant as expenses are submitted.
Andrea Zaradic, Magma's Vice President Operations and Development commented, "We are pleased with our Soda Lake field and plant optimization program, new production well targets and potential for further expansion. The team in place brings a wealth of knowledge that is leading to operational gains that will help conclude the Phase 1 Expansion and execute the Phase 2 plan."
Work is also underway at Magma's other Nevada properties. At McCoy, permits for 19 drill pads have been submitted and a magneto-telluric (MT) survey has been designed. A 1,000 foot deep temperature gradient well is planned for September pending permitting. At Desert Queen, Magma recently acquired two additional leases at the May BLM auction, thus improving its land position in the area. Drilling of four temperature gradient wells earlier this year has shown encouraging results.
Please visit the link, http://www.magmaenergycorp.com/s/Projects.asp, to view our photo and video gallery of Soda Lake.
About Magma Energy Corp.
Magma Energy Corp. is a geothermal power company which operates, develops, explores and acquires geothermal energy projects. We have an extensive portfolio of properties throughout the western United States, Iceland and Latin America, including one operating power plant in Nevada and two other operating power plants in Iceland.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION
This news release contains certain "forward-looking information" within the meaning of Canadian securities laws, which may include, but is not limited to, statements with respect to future events or future performance, management's expectations regarding exploration and development activities at Magma's Nevada properties and estimates of geothermal reservoir size and temperature, geothermal resources, recoverable geothermal energy or energy generation capacities. Such forward-looking information reflects management's current beliefs and is based on information currently available to management.
A number of known and unknown risks, uncertainties and other factors, may cause our actual results or performance to materially differ from any future results or performance expressed or implied by the forward-looking information. The forward-looking information is based upon what management believes to be reasonable assumptions, including, but not limited to, assumptions about: the success and timely completion of planned exploration and expansion programs; the growth rate in net electricity consumption; support and demand for non-hydroelectric renewables; government initiatives to support the development of renewable energy generation; the accuracy of reserve estimation methodology and analysis used to estimate the quantity of potentially recoverable thermal energy; geological, geophysical, geochemical and other conditions at our properties; the reliability of technical data, including extrapolated temperature gradient, geophysical and geochemical surveys and geothermometer calculations; capital expenditure estimates; availability of capital to fund exploration, development and expansion programs; and general economic conditions. Forward-looking information and statements are also based upon the assumption that none of the identified risk factors that could cause actual results to differ materially from the forward-looking information and statements will occur.
There can be no assurance that the forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, prospective investors should not place undue reliance on forward-looking information. Other than as required by applicable securities laws, we assume no obligation to update or revise such forward-looking information to reflect new events or circumstances.
SOURCE Magma Energy Corp.