Earth Heat Resources (ASX:EHR) has clinched 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 announced today is 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.
Loma Negra has extensive power needs in the operation and expansion of its leading industrial products businesses.
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.
The parties will enter into a binding power purchase agreement (PPA) subject to satisfaction and waiver of certain conditions precedent.
The agreement with a major manufacturer in Argentina underscores the strong demand for power in Argentina, where Earth Heat is well positioned.
EHR Managing Director Torey Marshall said, “The company has been busily lighting the path for our shareholders and investment community and aligning itself with strong respected partners within Argentina.
"Our ability to provide clarity on power consumption and power generation for both companies is a building block for the future development of EHR projects in Argentina.
"We are looking forward to expanding our relationship with Loma Negra, as well as introducing more strategic partners interested in taking firm positions in output from our Geothermal projects."