Tuesday, January 19, 2010

Sierra Geothermal

Sierra Geothermal Power Corp. (TSX: SRA) is what one might guess it is from that name. The company, based in British Columbia, Canada, has been developing geothermal energy products located in Nevada and California.

The company's website says that it "intends to finance development by utilizing a combination of corporate equity, joint venture partnerships and project debt, with the support of US government grants and loan guarantees."

Dissidents led by Richard Rule, and a company he controls (Exploration Capital Partners) seeks to change the size of the board in a way that would put majority control up for grabs. They are unhappy with the existing board's efforts to remain independent, at a time when similar companies are consolidating.

At this time, RiskMetrics is supporting the incumbents. That proxy advisory company says, "The board has the right strategy of becoming a major independent producer of geothermal power. Two future milestones: (i) 50 MW bankable feasibility by the end of 2010 and (ii) power production by 2012, have been conveyed to the market. $20 million out of the $50 million required for (i) have been secured. A future financing plan has also been outlined. There is no contrary evidence to prove Sierra is not on track now."

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