RE: Revised All-In Project CostsThat sounds about right to me. These cost overruns are annoying but not devastating to the long-term economics of the project. The technical problems with drilling are expensive but there's no major concern about the geothermal resource not being there.
Drilling and construction teams are expensive to deploy internationally and any project delay is going to cost millions in overtime and associated costs. The rainy season in Nicaragua last year made work difficult for months and that's not really management's fault. It was just bad luck.
Even at the production well stage, the probability of drilling a good well are only 50% to 60%. They got a gusher at Orita, one solid well in SJC II, and a couple of duds. It happens to the best of companies, geothermal drilling success is extremely hard. But the odds do improve with each attempt at the well. It's certain that the resource is there and it's certain RAM will eventually harness it.
Most geothermal juniors fail because they run out of money after cost overruns and are unable to finance when they're at a crucial stage. One reason we bet on RAM is because they have some of the best financing connections in the business. They'll be able to get all the money they need to get the plants running. After that it's just boatloads of free cash flow.
An extra 50 million in capital costs is not a big deal, as long as the plants get built. They'll get 50 million in revenue their first full year of production.