Rame Energy : Update on Cerro Coihue Wind Power Project, Chile

Rame Energy / Index: AIM / Epic: RAME / ISIN: JE00BBD8GG53 / Sector: Energy

20 May 2015

Rame Energy plc ("Rame" or the "Company")

Cerro Coihue* Financing Update

Rame, the independent power producer, is pleased to announce that it has executed binding terms with Anden Re. Capital SpA ("Anden Re") regarding the US$4.7 million funding facility, as announced on 13 March 2015, for the Cerro Coihue* off-grid wind project in Chile (the "Project"), which is to supply power to a producing mine owned by TSX Listed Mandalay Resources. All conditions have been satisfied including final agreement and execution of the engineering procurement and construction ("EPC") contract and the signing of a revised power purchase agreement ("PPA") to reflect the amended project timescales. As previously announced, completion is anticipated in Q4 2015.

* Cerro Coihue is the project previously described as 'Cerro Bayo'.

Anden Re, an investment group, has invested US$3.5 million of equity into the Project in exchange for 75% of the equity. In addition it has provided Rame's Chilean subsidiary, Seawind Holdings SA, with a US$1.2 million debt facility to fund the Company's equity contribution. The parties have further agreed to move towards terms to govern a broader relationship whereby they may collaborate on the financing of Rame's extensive off-grid and smaller on-grid project portfolio.

As previously announced on 13 March 2015, Rame is acting as EPC contractor on the Project and construction has commenced for the mobilisation of civil works at site starting with the drilling of rock anchors for the foundations of the wind turbines.

Three Vestas V44 600kW wind turbines have been purchased for the Project and will be fully refurbished and optimised for local conditions. The nacelles have been transported from Denmark to the workshop in Barcelona and refurbishment has now commenced following a full inspection by Rame. New ABB power electronics, which improve power quality and delivery, have also been delivered to Barcelona. The turbine blades and towers are in Denmark ready for overhaul and are scheduled to be ready for shipment towards the middle of June.

Photographs of the Project can be viewed on the Rame website (www.rame-energy.com) and more will be posted as the project progresses.

Rame CEO Tim Adams commented "I am delighted to have reached financial close on this agreement under which Rame retains a 25% equity interest in the Project. There is a clear synergy between Rame and Anden Re. and our close partnership has enabled this project to proceed with robust economics. This solidifies Rame's position as market leader in the provision of short term off-grid PPAs and I look forward to giving further updates as the project progresses. "

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Rame is an established revenue generative global supplier of cost effective, technically optimised and reliable power generation solutions including wind, solar and diesel to blue chip clients such as Akzo Nobel, Anglo American, Barrick Gold and Codelco. The Company has executed its first joint venture agreement with Santander Investment Chile Limitada to co-finance its Raki and Huajache projects. These two projects, in which Rame has a 20% equity participation, will have 15MW of generating capacity and have now been mechanically completed. The debt package for the two projects is being provided by Chilean bank, Banco BICE.

Rame aims to become a niche Independent Power Producer ("IPP") targeting an operational portfolio of 300MW in Latin America within three years. The Company plans to build on its proven track record of delivering power in South America where it has been involved for more than a decade.