RE: RE: Proof Geothermal Makes MoneyYour #'s don't make sense. Have you ever bought a house with a mortgage? One slowly pays down the principal which reduces the total interest with each payment. They're not paying 24 million a year in interest!!!
Let's start with the project finance loans of 77 + 177 = 255 million. They closed the loans in the last two years when interest rates were historically low. I'm going to assume a rate of 5%.
So we've bought a 255 million dollar house which we will pay off over 20 years. That means there's payment of 1.6 million a month over 240 months, a total payback of 403 million dollars.
1.6 million x 12 = 19.2 million a year. We've established that SJT 1 and 2 will generate at least 30 million in cash flow and I would argue closer to 40 million with the addition of the 10MW bottoming unit, the efficiency of the state of the art equipment, the excellent electricity rates in Nicaragua, the lack of corporate taxes for the first ten years, etc. There will be absolutely no problem paying off the project finance loans with your low estimate of cash flow.
The 50 million dollar credit facility is a 2 year bridge loan. Ram won't use all of it, especially if drilling goes well this month, and they can draw more of the original project finance loans for present needs. I believe there is a 1 or 2 year grace period after initial date of plant commission before the project finance loans need to be paid back. So cash flow from 2011 and 2012 will pay off the Sprott credit facility.