The Concerned Shareholder of Sierra Geothermal Power Corp.

January 20, 2010 17:21 ET

Sierra Geothermal Power Corp. Management Threatens to Deprive Shareholders of Their Voting Rights

Entrenched Board Looks to Void All Dissident Proxies to Retain Power

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 20, 2010) - Sierra Geothermal Power Corp. ("Sierra" or the "Company") Concerned Shareholder responded today to the Board and Management's claims and raised significant concerns regarding Sierra's threat to instruct their hand-picked Chair of the Special Meeting to void all YELLOW proxy votes. In the face of growing momentum behind the Concerned Shareholders and consistent with their actions to date, Management's claims are aimed at deflecting attention from their abysmal track record and threaten to preclude the democratic voting process.

"It would appear that the incumbent Board and Management are attempting to put the pieces in place to deprive Sierra's shareholders of their right to vote. Their most recent step in this regard was their appointment of a member of the current Board, to serve as Chairman of the Meeting," said the Concerned Shareholder's spokesman, Rick Rule. "The composition of the Sierra board should be determined by Sierra's rightful owners, its shareholders, and not Management or by Management's non-independent appointee to chair the Meeting."

The entrenched Board and Management continue to mislead shareholders in a desperate attempt to retain power. A letter dated January 15, 2010, (a copy of which is available on the Concerned Shareholder's website at sent to the Concerned Shareholder's legal counsel on behalf of Sierra's management, threatens that Sierra will seek to have its hand-picked Chair of the Meeting and current member of the entrenched Board, rule the Concerned Shareholder's proxies "null and void". If this were to occur, it would deprive shareholders of their right to vote for the board members they wish to represent their interests in their Company.

As the Concerned Shareholder has consistently stated, it seeks to strengthen the composition of the Board to ensure that shareholders are informed and involved in decisions having a significant bearing on the value of their investment in Sierra.

Poor Corporate Governance

Clearly, Sierra's Management are not getting the support they hoped for from shareholders and are taking extraordinary steps to disqualify the Concerned Shareholder's many supporters from voting their shares. Sierra's Management intends to have one of its own Board appointees serve as chairman of this contested Meeting and sit in judgment over the critical issue of which shareholders get to vote at the Meeting, and which do not. This is a fundamentally flawed process which epitomizes this Management's lack of understanding or commitment to best practices in corporate governance. The Concerned Shareholder has indicated that it will not tolerate any corruption of the Meeting proceedings by Management or its appointees.

"Shareholders should be alarmed by the self-serving actions of the entrenched Board and vote their YELLOW proxy for the Concerned Shareholder's nominees, whose interests are completely aligned with those of their fellow shareholders," added Mr. Rule. "The Concerned Shareholder will continue to defend its fellow shareholders' rights and looks forward to letting Sierra's owners decide who will best represent their interests."

Management's Frivolous Claims Attempt to Distract Shareholders

Management's claims are frivolous and fall under two categories: plainly wrong, or arguments that highlight the incumbent Board's failures as the Concerned Shareholder's statements were taken directly from Sierra's publicly available regulatory filings or from their financial advisor's publications. In fact, it is the Concerned Shareholder's pleasure to set the record straight with respect to some of the claims Management has made:

-- Position regarding takeover - Management claims the Concerned
Shareholder misrepresented Sierra's position regarding the Concerned
Shareholder on an imagined takeover. On page 10 of the Management
Circular, the heading incorrectly states that the Concerned Shareholder
"seeks to acquire Sierra at a discount." This blatantly false statement
requires no further context - it speaks for itself.

On the subject of a potential transaction, it is Sierra's own financial
advisors, Jacob Securities Inc. ("Jacob Securities"), who suggested
that the Company is "in play." It is alarming that shareholders need to
rely on third-party sources to gain insight into what is transpiring
with their Company, as opposed to via disclosure from their Board.
However, the Concerned Shareholder is in agreement with the assessment
of Jacob Securities that the Company lacks the scale and liquidity
required for the timely development of their assets.

-- Sierra's financings - Management claims the Concerned Shareholder failed
to offer proper context when it provided the per share proceeds of the
August 2009 financing by dividing net proceeds by units (each unit
consisting of one common share and one common share purchase warrant)
sold, a more precise metric than the gross proceeds number provided by
Management. The information required to make this basic calculation was
derived from the disclosure Management provided in its Third Quarter
2009 Report in Note 7(a). Shareholders should expect precision from
their Board and when absent, should question why it is missing.

The Concerned Shareholder also notes that Management did not value the
warrants issued with the equity as part of the financing, as per the
standard Black-Scholes method. Perhaps it is this and other noted
displays of lacking financial acumen that resulted in Management's
financial advisors noting that the Company trades at a severe discount
to its peers. (Jacob Securities Inc., Equity Research Report, November
10, 2009)

Copies of the January 15, 2010 letter from Sierra's legal counsel, with more detailed explanations of the facts pertaining to Sierra's claims, and the Concerned Shareholder's legal counsel's reply dated January 20, 2010, are available on the Concerned Shareholder's website at

Proxy Voting Deadline

With the proxy voting deadline fast approaching this week, shareholders are reminded to vote the YELLOW proxy form as soon as possible so that it can be received by no later than 5:00 p.m. (Vancouver Time) on Thursday, January 21, 2010. Detailed voting instructions are included in the Concerned Shareholder Proxy Circular that is being distributed to Sierra's shareholders.

Further information about voting the YELLOW proxy is available from Kingsdale Shareholder Services at 1-800-775-4067 or by visiting

About the Concerned Shareholder

The Concerned Shareholder is Exploration Capital Partners 2005 Limited Partnership ("Exploration"). Exploration and Rick Rule, President of Resource Capital Investments Corp., General Partner to Exploration, are among the largest and most experienced investors in the small to mid-cap geothermal space. The Concerned Shareholder holds 6,927,019 shares or approximately 5.40% of Sierra's issued and outstanding shares as of the Record Date.

Contact Information

  • Investors:
    Kingsdale Shareholder Services Inc.
    Kingsdale Communications Inc.
    Joel Shaffer