RENO, NV--(Marketwire - February 7, 2011) -  Ram Power, Corp. (TSX: RPG) ("Ram Power" or the "Company"), a leading renewable energy company focused on the development, production and sale of electricity from geothermal energy, announced today the following project and corporate financing updates.

SAN JACINTO -- TIZATE PROJECT UPDATE -- Phase I and II Construction, Drilling and Financing

The Company continues to make good progress on both the Phase I and Phase II expansions (36 MW each) of the San Jacinto-Tizate power project (the "San Jacinto Project") to increase the production capacity of the current operating facility from 10 to 72 MW net. As disclosed previously, the Company has an executed power purchase agreement for the Phase I and Phase II expansions, existing active production and injection wells with sufficient capacity to support the Phase I production increase, and $237 million of debt financing to support the construction of both the Phase I and Phase II expansions. With these essential project components in place, the Company expects that upon completion the project will be a significant driver of future shareholder value.

As of January 31, 2011, Phase I of the San Jacinto Project expansion is approximately 75% completed. The Phase I expansion was originally scheduled to be completed in 18 months with a target commission date of April 2011. However, the project has encountered construction delays and is now expected to be completed in 21 months with a target commission date of July 2011. As a result of unfavorable variances in some material and labor costs and the construction delays, the project has approximately $15 to $20 million of additional construction costs. The Company expects to contribute $10 to $15 million of additional equity to the project to cover the cost overrun with the balance covered by contingent debt reserves.

Concurrent with the Phase I expansion, the Company commenced construction on the Phase II expansion in 2010. As of January 31, 2011, the Phase II expansion of the San Jacinto Project is approximately 30% completed. The Phase II expansion was originally scheduled to be commissioned in December 2011. As a result of the construction delays in the Phase I expansion, the Company is now projecting a revised commission date of March 2012. As a result of the construction delays, the Phase II expansion has approximately $5 million of additional construction costs (excluding drilling) which will be covered by contingent debt reserves.

Over the past 10 months, the Company's San Jacinto Phase II exploration drilling program has drilled four wells SJ12-1, SJ9-2, SJ9-3, and SJ12-2. To complete the Phase II drilling plan the Company must increase its current certified resource capacity from 56 MW to 84 MW gross. To date GeothermEx, Inc. ("GeothermEx") has certified the production capacity of the SJ 9-3 well to be 4.2 MW based on long-term flow tests. In their current state of completion, wells SJ 12-1, SJ 9-2 and SJ 12-2 are not capable of sustaining continued commercial operations. To achieve production in wells SJ 12-1 and SJ 12-2, the Company has decided to re-drill both wells. The re-drills are expected to correct the problems encountered in the original drilling and reach the originally planned intersection of deep production zones. The Company has retained outside consultants to assist in the re-drilling and preliminary probability estimates anticipate the re-drilling of SJ 12-1 and SJ 12-2 to result in 10 MW to 20 MW gross of additional resource capacity. The Company expects to complete the re-drill of SJ 12-1 and SJ12-2 by the end of March 2011 and May 2011, respectively. Despite well SJ 9-2 having a high bottom hole temperature, the well has not demonstrated enough permeability to sustain commercial flow rates and the Company has been using cold water injection to stimulate the well and increase the permeability. The Company has no future re-drill plans for SJ 9-2. Should additional production wells be required to meet the certified resource requirements, the Company plans to drill an additional well SJ 12-3. Under the revised Phase II exploration drilling program, the Company is expected to incur approximately $27 million of additional drilling expenses to complete the program.

On November 4, 2010, the Company closed a $160 million debt facility (the "Facility") to finance the Phase II expansion which consists of $140 million in senior construction and term loans and $20 million in subordinated debt which is available for contingencies and for general corporate purposes. In addition to customary funding conditions, access to the Facility requires that GeothermEx certify that the steamfield for Phase II is sufficient to achieve production of certain MW levels. The Company is unable to access the Facility due to the current certified resource capacity of the San Jacinto Project. The minimum production level which must be certified for the San Jacinto Project as a whole to access the Facility is 64.8 MW gross. Upon certification of this production level, the Company will have access to $70 million of the Facility. As noted above, the Company currently has approximately 60 MW gross of certified resource capacity. Access of up to $98 million of the Facility will be available upon certification of the 70 MW gross level, and the Company will have access to approximately $7 million of additional funding under the Facility for each additional 2.4 MW gross of certified resource capacity. In addition, depending upon the MW levels certified, the Company is required to make available equity funding which, together with loans made under the Facility, are sufficient to complete construction of Phase II. The Company has been funding Phase II construction and drilling with equity which totals approximately $57 million to date. Additional equity funding required to meet the minimum levels needed to access the Facility will be funded in part from the corporate credit facility described below. As the Company achieves increased certified resource capacity through its drilling program, the Company expects approximately $45 million of its equity investment in Phase II to be returned through borrowings under the Facility.


Given the delay in reaching the resource certification levels necessary to access the Facility for Phase II of the San Jacinto Project, and the projected construction cost overruns in Phase I, the Company has obtained additional interim financing to cover these unexpected cash needs. The Company has successfully negotiated a $50 million, two-year bridge loan commitment with Sprott Resource Lending Partnership, Exploration Capital Partners 2008 Partnership and Newberry International Holdings Ltd. (collectively, the "Lenders"). An interim facility of $12 million was closed and funded by the Lenders on February 4, 2011. Interest at the rate of 12% per annum is payable monthly on the interim facility commencing on March 4, 2011. In addition, there is a standby fee in the amount of 1% of the commitment under the interim facility and a drawdown fee in the amount of 1% of the amount advanced. The term of the interim facility is six months. The interim facility is secured by the assets of the Company and its subsidiaries other than assets which have been previously pledged or have certain restrictions preventing them from being pledged. As of the date hereof, $7.8 million of the interim facility has been advanced to the Company to be used for the drilling programs at San Jacinto and at the Company's Orita project in Imperial Valley, California, construction costs at San Jacinto, and working capital. The Company and the Lenders are currently finalizing the documentation for the full $50 million, two-year bridge loan which will refinance the interim facility and provide an additional $38 million of funding for the Company. The Company expects the $50 million facility to close in March 2011.

Hezy Ram, CEO of Ram Power, stated, "Despite the setbacks on the San Jacinto Project, the tremendous value of the Ram Power portfolio of project assets enabled the company to attract the necessary financing at a critical time that will enable us to reach our objectives and deliver long-term shareholder value."

About Ram Power

Ram Power is a renewable energy company based in Reno, Nevada, engaged in the business of acquiring, exploring, developing, and operating geothermal properties. Ram Power has an interest in geothermal projects, primarily in the United States, Canada, and Latin America.

Cautionary Statements

This press release contains "forward-looking information" within the meaning of applicable securities laws including information regarding the business of Ram Power. Readers are cautioned not to place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by this information. The statements in this press release are made as of the date of this release. Ram Power undertakes no obligation to update forward-looking information, other than as required by law, or comment on analyses, expectations or statements made by third parties in respect of Ram Power, or its financial or operating results or its securities.

Contact Information:

Steven Scott
Director of Investor Relations
Ram Power, Corp.
Phone: 775-398-3711