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PPA signed to provide power to Cerro Bayo Gold and Silver mine, Chile
Rame Energy plc, the international power generator and engineering company, has announced that its wholly owned subsidiary, Seawind Holdings SpA, has signed a power purchase agreement with Compañia Minera Cerro Bayo Limitada to supply power to the isolated electrical grid system of the Cerro Bayo mining project in Chile owned by TSX listed Mandalay Resources Limited.
The PPA follows the signing of a Memorandum of Understanding with Cerro Bayo which was announced on 1 July 2014, and builds on Rame’s established position as a leading supplier of off and on-grid power generation solutions to the industry, mining and utility sectors.
As previously announced, under the terms of the PPA, Rame will provide power at an agreed price per MWh to Cerro Bayo for a minimum of five years from commencement of commercial operations and thereafter on a rolling one year contract at Cerro Bayo’s option. Construction of the project is, subject to financing, due to start in the next few months and commercial operations are expected to start by April 2015.
Rame CEO Tim Adams commented: “The signing of the PPA confirms that Rame is able to provide attractively priced energy to both on and off grid customers and can do so even on comparatively short term contracts. Under the agreement, Rame will provide not just cheaper and cleaner power but also better energy security and reduced price volatility to the Cerro Bayo Mine.
“Our innovative approach to the selection of the generating equipment for this project demonstrates how Rame is engineering improved project economics and can deliver robust returns and accelerated capital paybacks. We see a range of good opportunities to apply our expertise in renewables to isolated off grid power systems and anticipate that our increasing presence in the growing ‘diesel displacement’ market will contribute significant income to the business as a whole.”
