Although construction costs are up sharply, a consultant's report confirms the general direction of a company hoping to develop a geothermal plant near Winnemucca that would generate at least 35 megawatts of electricity.
The Blue Mountain plant under study by Nevada Geothermal Power Inc.
of Vancouver would post an internal rate of return of 21 percent at current electricity prices, said the study by GeothermEx Inc.
of Richmond, Calif.
The new study notes, however, that construction costs now would total about $73 million for the plant up $5 million from earlier estimates.
The major culprits are higher steel prices and higher drilling costs.
Publicly traded Nevada Geothermal has said it expects to finance about 80 percent of the project with debt and raise equity financing for the remainder.
The company last week said it plans a $2.27 million private placement of stock and warrants to raise equity for the work.
The Blue Mountain project is about 20 miles west of WinneMucca.
