Nevada Geothermal Power Inc.'s (NGP) Pumpernickel property is located in north-central Nevada, 30 km (20 mi) east of Winnemucca, in Humboldt County. The Pumpernickel geothermal site is 100% leasehold covering 10.3 square miles (26.67 square km) of geothermal lands. The site is accessible by highway and county road and has access to three interconnect points to the local transmission grid. The Pumpernickel site is estimated to contain a 20-30 megawatt resource, enough electricity to power up to 24,000 homes.
Sierra Geothermal Power Corp. (SGP), a TSX Venture listed company, has an option to earn a 50-per-cent joint venture interest (entered on October 12, 2004) in the Pumpernickel geothermal land under lease to NGP. Under this option, SGP is required to make certain cash payments and to issue common shares to NGP, as well as to undertake C$5-million in project expenditures by the end of 2008. To date SGP has issued 400,000 shares of stock and forwarded C$1,000,000 to NGP for Pumpernickel. Future work in 2008 will include temperature gradient wells, a full production-sized exploratory test well, transmission studies and feasibility studies.The Pumpernickel property is operated by NGP.
Pumpernickel geothermal project highlights are:
- To date, SGP has issued 400,000 shares of stock and forwarded C$1 million to NGP for Pumpernickel
- The Pumpernickel project has produced reservoir temperature estimates from 302°F (150°C) to 424°F (218°C)
- Maximum well temperature recorded has been 275°F (135°C) with temperatures increasing at bottom
- Pumpernickel's geothermal potential is shown with a number of active near-boiling geothermal hot springs along the western edge of the Valley
- Significant gold mining and processing operations within a 75-mile radius of NGP's Pumpernickel geothermal site which could use up to 400 MW
- Water samples collected from thermal gradient holes and geothermal springs have confirmed Pumpernickel as a commercial reservoir by a third party
NGP has entered into an agreement which grants ORMAT a right of first refusal to construct the power plant at Pumpernickel, at a "most favoured customer" price. This would be subject to exploration and confirmation activity success in confirming a geothermal resource and securing a Power Purchase Agreement.
Through the Pumpernickel Valley project, Nevada Geothermal Power has the opportunity to develop a strategic business relationship with a major mining company. Significant gold mining and processing operations are within a 75-mile radius of NGP's Pumpernickel geothermal site, using up to 400 MW of power. Mining companies are paying higher charges to utilities and hence are seeking alternative sources of power.
Future exploration plans include temperature gradient wells, a full size production test well, transmission studies and feasibility studies. Upon successful completion of these tests, NGP will work towards securing a third power purchase agreement.
Nevada's geothermal output is expected to increase significantly in the next decade to meet burgeoning demand for cheaper power and to comply with renewable portfolio legislation requiring the percentage of renewable electricity produced in the State to increase from a current 7% (2007) to 20% (2015).
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