Earth Heat Resources clinches agreement for 30Mw power purchase offtake in Argentina

Earth Heat Resources (ASX: EHR) has signed an agreement for a power purchase offtake from its Copahue geothermal power project in Argentina with Electrometalurgica Andina SAIC, with an initial allotment of 30MWe per annum with significant potential for further expansion.

The Electrometalurgica Andina SAIC plant is located in the province of San Juan and the signing of the letter of intention (LOI) and heads of agreement demonstrates the strong demand for power in Argentina.

Significantly, this outcome is a vote of confidence in the company's strategy in Argentina.

The agreement follows the company's recent solid progress at its Copahue Project in Argentina where it is positioned to be the first ASX listed geothermal company to complete a Bankable Feasibility Study and order long lead items for a commercial geothermal power project.

The parties intend to cooperate and amalgamate technical and professional skill sets to facilitate a direct investment of the customer, either in Copahue or in other energy projects developed by Earth Heat. They intend to enter into a binding power purchase agreement (PPA) subject to satisfaction and waiver of certain conditional precedents.

Torey Marshall, Earth Heat's managing director, said “The company is genuinely excited to be in a position to announce the signature of another LOI for power offtake in Argentina.

"We also have an extremely positive outlook on the overall intentions of Electrometalurgica Andina in terms of developing existing and new projects in the country via potential direct investments."
Electrometalurgica Andina SAIC is part of the Andina Group that was established in Spain in 2008.

On October 5 Earth Heat Resources signed an initial agreement to supply power to Argentina's leading manufacturer of cement and concrete from a geothermal power project in Argentina.

The letter of intent was with Loma Negra CIASA, for a power purchase and off take to supply 10 mega watts and 78.8 mega watts per hour of electricity per annum with expansion in the future.
In July, Earth Heat engaged SKM to undertake a Concept Study of the Copahue Geothermal Project in Argentina, due for completion in early second half of 2011.

The concept study will delve into the best option for a viable technical solution for an initial exploitation of its Copahue geothermal resource in Neuquen Province, Argentina.

In May, there was an increase of over 150% in total resources interpreted to be at Copahue, versus historical estimates.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/20864/earth-heat-resources-clinches-agreement-for-30mw-power-purchase-offtake-in-argentina--20864.html