Polaris Geothermal Reports Second Quarter Results and Updates Progress on San Jacinto Project.TORONTO -- Reliability testing underway Project generating commercial power Polaris Geothermal Inc. ("Polaris Geothermal" or the "Company"), (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension VENTURE:GEO) an emerging renewable energy Renewable energy utilizes natural resources such as sunlight, wind, tides and geothermal heat, which are naturally replenished. Renewable energy technologies range from solar power, wind power, and hydroelectricity to biomass and biofuels for transportation. geothermal power Geothermal power Thermal or electrical power produced from the thermal energy contained in the Earth (geothermal energy). Use of geothermal energy is based thermodynamically on the temperature difference between a mass of subsurface rock and water and a mass producer, wishes to announce its financial results for the three and six-month period ended June 30, 2005 and to provide an update on its San Jacinto San Jacinto, river, c.130 mi (210 km) long, rising in SE Texas as the West Fork and flowing S to Galveston Bay. Its chief tributary is Buffalo Bayou, and both the bayou and the lower river are used for the Houston ship channel. Power Project. Polaris Geothermal is currently developing the 66 MW project on its San Jacinto-Tizate ("SJT SJT Stephen Joseph Theatre (UK) SJT Syndicat des Journalistes Tunisiens (Tunisian Journalists' Union) SJT Serjeant (archaic British 1900-1945) ") concession in Nicaragua. The SJT project is being developed in two phases. Phase I involves the development of 20 MW in two stages through the installation and construction of a power generating facility using proven production wells already existing on the concession. Project Update Construction of the first 10 MW phase of the project has been completed and both 5MW units have been tested and run synchronized syn·chro·nize v. syn·chro·nized, syn·chro·niz·ing, syn·chro·niz·es v.intr. 1. To occur at the same time; be simultaneous. 2. To operate in unison. v.tr. 1. to the national grid national grid Noun Brit & NZ 1. a network of high-voltage power lines linking major electric power stations 2. the arrangement of vertical and horizontal lines on an ordnance survey map . In addition, the power plant's original metering devices, which did not meet the specifications outlined by Nicaraguan regulators, have been replaced by the substation electrical contractor and approved by the independent system auditors. Reliability testing has begun, however production output is currently limited to 5 MW due to restricted injection capacity in re-injection well SJ-6 caused by silica and mud build-ups in the well bore. Well testing is currently underway and remedial work to remedy the issue is being reviewed. Polaris anticipates recovering full injection capacity in the fourth quarter of 2005. During the test period, Polaris will be selling power in the open market at a rate of $0.0595 per kilowatt hour Kil´o`watt` hour 1. (Elec.) A unit of work or energy equal to that done by one kilowatt acting for one hour; - approximately equal to 1.34 horse-power hour. Noun 1. until it is satisfied with reliability of its installations. Union Fenosa, the counterparty to the 20-year power purchase agreement ("PPA PPA 1. Palpation, Percussion & Ausculation 2. Pittsburgh pneumonia agent 3. Postpartum amenorrhea 4. Price per accession 5. Pure pulmonary atresia ") is working closely with Polaris to finalize any remaining issues relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc terms and conditions of the PPA. First revenue from its open market sales is expected in September of 2005. Financial Results Polaris Geothermal reports its results in US dollars. At June 30, 2005 Polaris Geothermal had $2.39 million in cash and short-term investments. Current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. totaled $3.86 million and current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. were $5.59 million. Long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. increased to $11.15 million as the Company drew down funds from a loan facility with its banking syndicate led by Standard Bank London. In the quarter, the Company reported a loss of $970,572 ($0.03 per share) versus a loss of $978,575 ($0.04 per share) during the same period last year. For the six-month period, the Company reported a loss of $1.49 million ($0.04 per share) versus a loss of $1.09 million ($0.06 per share) during the same period last year. Net loss increased in the quarter and six-month period due to several factors including increased expenses relating to the Company's banking lines, costs associated with evaluation and feasibility studies The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. on Polaris Geothermal's concessions in Nicaragua. In addition, the Company reported $271,152 in plant operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. in the quarter (nil in 2004) as the San Jacinto began producing power in July of 2005. Business Highlights Polaris Geothermal successfully executed the following strategic and operational initiatives during the quarter: - On June 1, 2005, Polaris Geothermal announced that it had received a final geophysical survey Geophysical survey refers to the systematic collection of geophysical data for spatial studies. Geophysical surveys may use a great variety of sensing instruments, and data may be collected from above or below the Earth's surface or from aerial or marine platforms. report on the SJT concession in Nicaragua. The report, completed by Sinclair Knight Merz, ("SKM SKM Sinclair Knight Merz Pty Ltd. SKM Szybka Kolej Miejska (Warsaw, Poland railway) SKM Singapore Kindness Movement SKM Sigaret Kretek Mesin (Indonesian: Machine-Rolled Cigarettes) "), world leading independent geoscientific consultants, indicated that the western and eastern resource sectors of this concession are spatially connected and that the combined resource area is larger than previously estimated. SKM assigned a 90 percent probability that the entire resource contains energy sufficient to support production of 200 MW of power over a 20-year period. The final results represented a 16 percent increase over SKM's preliminary findings announced on April 20, 2005. - On June 10, 2005 Standard Bank made an equity investment in Polaris Geothermal through a non-brokered Cdn.$2.415 million private placement. - On June 20, 2005, the official inauguration of the SJT Power Plant was held at the plant site in Nicaragua, and attended by senior government officials including members of the energy, economics, and foreign investment ministries. The inauguration ceremony was presided over by Enrique Bolanos Geyer, President of the Republic of Nicaragua and acknowledged the successful completion of construction on the initial 10 MW phase of the project. Comparative summary results for three and six-month period ended June 30, 2005 are shown in US dollars in the following tables. Additional information is contained in the Company's financial statements, which are available for review on the SEDAR SEDAR System for Electronic Document Analysis and Retrieval SEDAR Southeast Data, Assessment, and Review website (www.sedar.com).
Condensed Summary Balance Sheet as at
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In US dollars June 30, 2005 December 31, 2004
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Current assets $3,860,612 $3,935,537
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Total assets 43,249,425 37,214,806
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Current liabilities 5,594,794 4,613,968
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Long term debt 11,150,676 7,673,522
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Non-controlling interest 2,939,084 3,816,700
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Total Liabilities 19,684,554 16,104,190
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Shareholder's equity 23,564,871 21,110,616
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Condensed Summary Statements of Operations
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In US dollars except For the six month For the three month
per share data period ending period ending
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June 30, June 30, June 30, June 30,
2005 2004 2005 2004
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Revenue - - - -
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Plant Operating Expenses 271,152 - 271,152 -
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Operating loss 271,152 - 271,152 -
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Expenses 1,410,188 1,163,163 840,338 964,270
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Loss before controlling
interest 1,676,319 1,186,601 1,092,727 1,045,801
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Net Loss 1,488,860 1,094,862 970,572 978,575
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Weighted average number
of shares outstanding 34,565,571 19,155,625 35,022,947 21,887,789
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Loss per share 0.04 0.06 0.03 0.04
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Polaris Geothermal is a renewable energy resource company currently focused on the development of geothermal projects. Polaris Geothermal Inc. has 36,476,873 Class A common shares issued and outstanding. FORWARD-LOOKING STATEMENTS forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release includes certain forward-looking statements. All statements regarding potential estimated capacity, reserves and future plans and objectives of Polaris Geothermal, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from these forward-looking statements include: the ability to extract sufficient geothermal fluid of usable quality from the resource, in a cost-effective manner, the ability to remedy the silica and mud build ups in well SJ-6, the ability to successfully conclude negotiations with Union Fenosa respecting the PPA and other factors disclosed in Polaris Geothermal documents filed from time to time with regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities . The TSX Venture Exchange TSX Venture Exchange Originally called the Canadian Venture Exchange (CDNX), this was a result of the merger of the Vancouver and Alberta stock exchanges. The goal of TSX Venture Exchange is to provide venture companies with effective access to capital while protecting investors. does not accept responsibility for the adequacy or accuracy of this release. Polaris Geothermal Inc. (TSX VENTURE:GEO) |
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