Etrion announces update for Aguas Blancas solar project
Wednesday, Jan 08, 2014Etrion Corporation ("Etrion" or the "Company") (TSX:ETX)(OMX:ETX), a solar independent power producer, announces an update for its Aguas Blancas solar project in Chile.
The Aguas Blancas solar project is an 8.8 MW solar photovoltaic ("PV") park under development in the Antofagasta region of Chile. The project is owned 100% by Etrion and is expected to sell electricity to the Aguas Blancas iodine mine in northern Chile through a 15-year take-or-pay, US dollar-denominated power purchase agreement ("PPA") with Atacama Minerals Chile S.C.M ("Atacama Minerals").
The parent company of Atacama Minerals, Sirocco Mining Inc. ("Sirocco") (TSX:SIM), recently announced a temporary reduction in production at the Aguas Blancas mine due to softening iodine prices. Operations at part of the mine will be temporarily suspended, and the expansion of the mine will be delayed. Sirocco anticipates that operations at the mine will be restarted early in 2015, and the expansion of the mine will follow shortly thereafter.
The Aguas Blancas solar park was expected to be under construction by Q1 2014 and to be operational by July 2014. Given Sirocco's recent announcement, Etrion expects construction of the solar park to be delayed by twelve months.
Etrion plans to invest approximately US$5.0 million or about 30% of the estimated total project cost. The balance is expected to be funded by a long-term, non-recourse project loan. In the first full year of operation, based on the preliminary project equipment cost and financing assumptions, the Aguas Blancas solar park is expected to generate revenues of approximately US$2.8 million, earnings before interest, taxes, depreciation and amortization ("EBITDA") of US$2.0 million and free cash flow of US$0.5 million.