Polaris Geothermal, Exorka in development deal

Toronto's Polaris Geothermal (TSX: GEO) announced yesterday that it signed a deal with Iceland's Exorka International to develop and operate projects in Nicaragua.

The two companies plan to swap units, shares and warrants as part of a deal granting Exorka the exclusive right to supply a generation plant and related equipment to Polaris Geothermal until June 30, 2009.

Under the deal, Exorka will supply a turn-key Kalina power plant proposal to Polaris for a power project near Leon, Nicaragua, by January 15, 2008, with an agreement to negotiate in good faith the terms for the plant.

Exorka will also supply, at cost, technical, pre-engineering and brine testing work required for the potential supply of the plant by March 31, 2008.

As part of the agreement, Exorka will pay $2 million for 1.6 million Polaris units, consisting of shares and warrants.

Polaris will pay $1.3 million for 900,000 Exorka shares. Polaris will also received warrants for up to 1 million Exorka shares.

Polaris said the planned 66 megawatt San Jacinto-Tizate geothermal project in Nicaragua is being developed in stages, providing early generation revenue from existing wells while the balance of the project is constructed.

The company has an agreement with Intergeotherm, the original developer, to use all physical assets at the site for a period of 20 years, extendable to an additional 10-year period.

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