Minerco Resources, Inc. Signs a Binding Letter of Intent to Acquire an Interest in a 1.2 Megawatt Hydroelectric Asset in Hondurasadmin
Minerco Resources, Inc. a progressive developer, producer and provider of clean, renewable energy solutions in Latin America, announced today that the Company has signed a binding letter of intent for the acquisition of a 30% interest in a 1.2 mega-watt, Hydro-Electric Project known as “Caserio Rio Frio” located in the Municipality of Santa Fe, in the Department of Ocotepeque in Honduras, C.A. from Sesecapa Energy Company S.A. de C.V. (“SENCO”), a corporation formed and operated under the laws of Honduras.
The Agreement provides for the Company to acquire 30% interest of the 1.2 mega-watt Caserio Rio Frio Project. The project has its Congressional Approval, Power Purchase Agreement (“PPA”), Water Contract, Operations Contract, approved final design and construction is in progress. All Official Contracts will be published in the Honduran national newspaper called La GACETA, which ensures these executed, binding contracts obtain permanent legal effect and validity. The Project is expected to be completed and begin generating revenue in the first quarter of calendar year 2012.
The Agreement also provides for the Company to obtain a minimum 30% interest and a maximum 80% interest in the remaining 2 phases of the Project known as “El Chaguiton” and “El Palmar” which are a cumulative 2.2 mega-watts. These 2.2 mega-watts are also included in the PPA, and are in the Development Phase and construction is expected to begin in early 2012.
Minerco’s interest in the Caserio Rio Frio Project is estimated to have the potential capacity to gross $200 thousand per year once fully operational and has an estimated internal rate of return of 31%. For the El Chaguiton and El Palmar phases of the Project, Minerco’s estimated revenue is between $400 thousand and $1.1 million depending on the interest of the Projects it acquires. However, such estimates are based upon preliminary results and assume all studies produce anticipated results and that expenses do not exceed budget estimates. There can be no assurance that the final results and timing will be as anticipated.