A Mature, Cost Competitive Renewable Power Source

GREG REID, Wellington West Capital Markets (04/28/2009)
"Last week, we attended the Canadian Geothermal Energy Association (CanGEA) in Vancouver, B.C. We came away confident in our view that the geothermal power sector will gain increasing attention with investors in the coming months and years. Geothermal power has several favorable characteristics such as long-term predictable cash flow, low levelized costs, a green energy source and long life assets. The industry is relatively unknown by the Canadian investment community as compared to other renewable and fossil fuel energy sources, but we expect this gap to close over time.

We continue to believe that Canadian-listed geothermal resource developers will benefit from increasing investor attention as our thesis unfolds. We believe that current stock price levels provide attractive entry points for investors with higher risk tolerances and a longer time horizon. Most of the companies in our geothermal coverage universe trade at a fraction of their estimated NAV. We believe that proposed changes on the U.S. regulatory landscape would be favorable for Canadian geothermal developers with exposure to the U.S. market."

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