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18 Mar 2016 07:00
18 March 2016
Rame Energy plc
("Rame" or the "Company")
Update on Cerro Coihue Off Grid Wind Energy Project
Rame Energy plc, the AIM quoted independent power producer and power project developer, is pleased to update on its 1.8MW off grid wind project in Patagonia, Chile which will supply energy to Mandalay Resources Corporation's ("Mandalay") Cerro Bayo gold mine (the "Mine"). The project, for which Rame has acted as designer and constructor, achieved construction completion on 14 March 2016 and permanent energisation and operational start up is anticipated within two weeks subject to weather conditions at the site.
To achieve the economics required to support a five year power purchase agreement with Mandalay, Rame elected to utilise three 600kW Vestas V44 turbines that had previously been in operation in Denmark. The units were dismantled and given a complete overhaul in Barcelona and were then technically optimised with full power converters and a new control system to improve output and reliability, the first time this has been done. After refurbishment, the turbines, including the towers and blades, were shipped from Europe to Chile and then transported over 2000 km by road and ferry to reach the remote mine site with installation successfully completed over a 17 day period.
The project, which Rame announced on 20 May 2015, has been financed in cooperation with German partner, Anden Re. Rame has now repaid the $1.2 million loan used to secure its 25% equity position in the asset. Upon completion, Rame will receive a final contract payment worth over $800,000 and its share of the generating revenue, as an IPP, is estimated to be in excess of $400,000 per annum. The wind energy generated will offset the diesel based generation which currently provides power to the Mine.
CEO Tim Adams said "We are delighted to provide an update on the Cerro Coihue project where we have had to develop an innovative technical solution to reduce equipment capital costs in order to provide competitively priced energy against a short term power purchase agreement. While the initial PPA is only for five years, the life of the Mine is expected to be significantly more than the initial five years and so we would expect to roll the PPA forward in due course. The logistics of transportation to, and construction at, this very remote location are naturally challenging and it is critical to avoid any disruption to mining operations. We believe however, that this project showcases our ability to deliver attractive power solutions to diesel dependent off grid customers whilst still being able to support strong financial returns to the asset owners."
For further information, please visit the Company's website, www.rame-energy.com or contact:
Rame Energy plc | +44 (0) 1752 565638 |
Tim Adams, Chief Executive Officer Kevin McNair, Chief Financial Officer |
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Cantor Fitzgerald Europe (Nominated Adviser and Broker) | +44 (0) 20 7894 7000 |
Andrew Craig / Richard Salmond | |
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Tavistock (Financial PR) | +44 (0) 20 7920 3150 |
Simon Hudson / James Collins / Claudia Esnouf |
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About Rame Energy
Established in 2002, Rame Energy is an experienced Power project developer and Independent Power Producer (IPP) that seeks to create value for its stakeholders by developing a portfolio of high yielding renewable energy projects. We specialise in engineering on-grid and off-grid wind, solar and hybrid power solutions. Our primary market focus is Chile, where energy demand outstrips supply, creating conditions that make the country highly favourable for renewable power projects.
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