Great News for Nevada Geothermal

Earlier today, Nevada Geothermal Power Inc. (NGLPF.OB) announced it has mandated John Hancock Life Insurance Company to be the exclusive debt provider for an up to US$95 Million Term Loan Facility for the Blue Mountain, “Faulkner 1” geothermal project. The financing facility is expected to close in December 2009, subject to the usual legal due diligence and approvals. Read the full announcement.

We first mentioned Nevada Geothermal in these pages in a comment to our September 08, 2009 article entitled Geothermal Is Getting Red Hot, Part II. Here at The Green Investor we generally focus on larger companies such as geothermal pure-play Ormat (ORA), but the reason we have been so excited about Nevada Geothermal is that it is about to graduate from being an exploration and development stage company to a revenue generating electricity producer, and if it makes the transition successfully, its valuation multiples will change dramatically.

Since the uncertainty surrounding their financing was the main remaining dark cloud overhead, we now see Nevada Geothermal as a much less risky speculation, and looking at the recent share price appreciation it looks like the market agrees with us.

Nevada Geothermal shares are up some 75% since early September

click to enlarge

Disclosure: No positions

Comments

[Alan Young]

The stock is fairly valued now, at about 2:1 P/B. But with stockholders' equity only half the amount of the loan facility, I would not like to see the company do that much borrowing. Actually, that's nearly as much risk as not being able to borrow at all. So it's not my idea of good news; it was my cue to sell.

2009 Oct 14 04:12 AM

[wind4me]

I sold too early but the amount of revenues to LOAN value is going to make alot of investors realize this is a penny and will always be a penny..........

2009 Oct 14 08:17 AM

[User 329552]

If the government didn't see this as a viable company they would not be granting them approx 58million dollars

2009 Nov 13 11:46 AM