EDC sets $66M for Lat-Am energy projects

Manila Bulletin 
By Myrna M. Velasco 
Published: July 12, 2013 
Lopez firm Energy Development Corporation (EDC) affirmed investments of $66 million for its geothermal exploration projects in Latin America.
In a follow-up disclosure to the Philippine Stock Exchange (PSE), the company noted that it will be shelling out the next round of investment of estimated $58.3 million for the Mariposa prospect in Chile.
That venture is covered by the 70-percent equity acquisition of EDC in Compana De Energia (ENERCO), which is a subsidiary of Canadian firm Alterra Power Corporation.
For Peru, the capital outlay is set at $8.0 million for projects covering the Tutupaca Norte, Loriscota and Crucero prospects.
In EDC’s deal with Alterra, the Candian firm will continue to hold 30-percent interest in the Mariposa project’s corporate vehicle ENERCO, but it will be done via wholly-owned subsidiary Magma Energy Chile Limitada.
For the Peru projects, the company reiterated that “a new project company will be incorporated” and that 70-percent equity will be held by EDC and the balance of 30-percent by Magma Energia Geotermica S.A., which is also a subsidiary of Alterra Power.
The Lopez firm emphasized that it will have operational and management control of the Peruvian corporate vehicle that will be established.
EDC further noted that four shareholder agreements have been executed with Alterra Power for the various prospects.
“The terms of the project agreements call for EDC to fund the next $58.3 million in project expenditures in the Mariposa project and $8.0 million in project expenditures for all the Peruvian projects to top Alterra’s past development costs,” EDC stressed.
The company added that for its Mariposa venture, “the relevant project agreement contemplates implementing an agreed work plan that will further develop the Mariposa project by building infrastructures over the next 18 months.”
The Peruvian project work plan, on the other, will undergo various exploration surveys over the next 12-15 months.
Even with these forward-looking work plans though, EDC has qualified that its “continued participation in the Peruvian projects and the Mariposa project is subject to positive results being obtained from resource assessment studies to be conducted by EDC for each of the projects in accordance with the terms of the project agreements.”   source