Alternative Earth Resources Inc. is pleased to announce that it has signed a definitive Purchase and Sale Agreement (“PSA”) with Ormat Nevada Inc., whereby Ormat will purchase AER’s Crump Geyser (50% interest) and North Valley geothermal project assets, and obtain an option, exercisable over a four (4) year period, to purchase certain of AER’s New Truckhaven geothermal leases for cash payments totaling US$1,500,000. The sum ofUS$1,490,000 is to be paid on closing of the transaction, and a further $10,000 is payable if and when Ormat exercises the lease purchase option. The PSA replaces a letter agreement with Ormat dated June 3, 2014, which was disclosed in a news release datedJune 11, 2014.
AER has received a US $50,000 non-refundable deposit in respect of the PSA, and the transaction is subject to the approval of AER shareholders at a Special Meeting to be held on August 22, 2014, and the acceptance of the TSX Venture Exchange. The PSA, if approved, is expected to close on or about August 27, 2014.
AER had cash and cash equivalent assets of US$1.2 million as of March 31, 2014. If the approvals are obtained and the transaction closes, the benefits to accrue to AER include: an additional US$1,490,000 to the treasury; free up cash of US$175,000 that is currently pledged for geothermal well bonds; remove a liability for geothermal well abandonment costs of approximately US$450,000; and eliminate on-going geothermal lease payment obligations.
About Alternative Earth Resources Inc.: Alternative Earth Resources Inc. is contemplating a change of its business focus from renewable energy to mineral resource development. With its projected strong cash position and greatly reduced overhead, the Company plans to pursue mining project acquisitions and/or merger opportunities.