18th Mar 2016 08:28
LONDON (Alliance News) - Power producer Rame Energy PLC said Friday that operational start-up at its Cerro Coihue off-grid wind project is anticipated within two weeks, subject to weather conditions, after construction completed at the site on Monday.
The 1.8 megawatt wind project in Chile will supply energy to Canadian miner Mandalay Resources Corp's Cerro Bayo gold mine, and will reduce reliance on the diesel-based generation which currently provides power to the mine.
Rame, which acted as designer and builder for the project, said it will receive a final payment of USD800,000 upon completion.
It said it used for the project three 600 kilowatt Vestas V44 turbines that had previously been in operation in Denmark. This allowed it to achieve the economics required to support a five-year purchase agreement with Mandalay. The units were refurbished before being installed at the site in Patagonia.
The project has been financed in cooperation with Rame's German partner and investment group Anden Re Capital SpA, the company said.
Rame added it has repaid the USD1.2 million loan used to secure its 25% equity position in the asset, and said its share of the generating revenue is estimated to be in excess of USD400,000 per annum.
"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," said Chief Executive Tim Adams.
"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," Adams added.
Shares in Rame were untraded on Friday, having last traded at 8.05 pence.
By Hannah Boland; [email protected]; @Hannaheboland
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