Sierra Geothermal Power Corp.
TSX VENTURE : SRA

Sierra Geothermal Power Corp.

May 18, 2010 12:56 ET

Sierra Geothermal Makes Discovery at Alum and Reports Q1 2010 Financials

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 18, 2010) - Sierra Geothermal Power Corp. ("Sierra") (TSX VENTURE:SRA) is pleased to announce that it has made a geothermal discovery at its 100% owned Alum project in Esmeralda County, Nevada. In addition, Sierra reports its Q1 2010 financial results and provides an operational update.

Alum Project

The geothermal discovery comes from Sierra's slim well 26-19, which is considered to be a geothermal discovery well due to the levels of permeability and temperature encountered. The drilling of the slim well 26-19 concluded on May 14, 2010. The well was drilled to a maximum depth of 1,484 meters or 4,868 feet. The preliminary bottom hole temperature of 146 degrees Celsius or 295 degrees Fahrenheit was recorded immediately after drilling stopped. Several zones of high permeability were encountered between 1,116 and 1,325 meters (3,663 and 4,349 feet, respectively). After coring through the 209 meter permeable zone, a geothermal water sample was air lifted and flowed for three days and samples were collected for analysis. Temperature measurements in the completed well will continue until thermal equilibrium is achieved.

A temperature profile on the previously drilled well 25-29 was recorded April 30, 2010, five months after drilling was completed. The temperature log returned a maximum of 130 degrees Celsius or 266 degrees Fahrenheit at 630 meters or 2,067 feet.

The cost for these wells is shared on a 50/50 basis with the US Department of Energy (DOE) under the 2009 Geothermal Technologies Program grant award. The total grant amount from the DOE for the Alum project was $5,000,000. The Alum project was acquired from Geo-Energy Partners 1983 Ltd in 2006.

"We are grateful for the financial support that we are receiving from the DOE in advancing our Alum project, as it has helped us make a discovery at Alum with less capital than we would have otherwise employed. Numerous people were employed during the drilling of these wells, showing that the DOE grant program is working. We look forward to advancing the Alum project to the next level which is drilling full sized production assessment wells," said Gary R. Thompson, President and CEO of Sierra.

Q1 2010 Financial Results

For the first quarter ended March 31, 2010, Sierra reported a net loss of $1,436,583 or ($0.01) per share compared to a net loss of $428,231 or ($0.01) per share for the first quarter ended March 31, 2009. As of March 31, 2010, Sierra had cash of $4,459,286 and working capital of $3,053,202, compared to cash of $8,260,320 and working capital of $6,664,549 on December 31, 2009. The full text of Sierra's unaudited financial statements and management's discussion and analysis is available on the SEDAR website at www.sedar.com or at www.sierrageopower.com.

Reese River Project

Sierra recently completed a review and analysis of new geological, structural, and geophysical data at its Reese River project in Lander County, Nevada. The integration of these new data sets into the Reese River conceptual model is the result of successful collaborations with the University of Nevada, Reno and the University of British Columbia. New data from detailed geologic mapping and joint 3D inversion modeling of magnetotelluric and Z-TEM data highlight an area of complex faulting coinciding with the change in trend of a major geologic structure in the area. This structurally complex area (the accommodation zone) may be a zone of enhanced permeability at depth and is of high geologic interest. Also, the recent temperature hole 23-03, which was drilled to a depth of 30 meters, returned a temperature gradient of 1,100 degrees Celsius per kilometer or 61 degrees Fahrenheit per 100 feet. This hole also lies within the inferred accommodation zone. Recent internally-derived resource estimates for Reese River, using a Monte Carlo model, indicates 70 MW of power potential. The increase is based on the recent step out drilling which Sierra believes has identified a thermal anomaly larger than previously delineated.

Silver Peak Project

During February/March 2010, core well 38-11 was drilled at Silver Peak to 1,649 meters or 5,409 feet. This well was the first deep well at Silver Peak. A recent stable temperature measurement recorded a bottom hole temperature of 103 degrees Celsius or 217 degrees Fahrenheit.

The costs for these wells are shared on a 50/50 basis with the US Department of Energy (DOE) under the 2009 Geothermal Technologies Program grant award. The total grant amount from the DOE for the Silver Peak project was $5,000,000.

Imperial Valley Properties and Nevada Land Sale Results

Sierra has been notified that the Imperial Valley (Salton Sea) lands in California, which comprise 3,442 acres, have been leased by the Bureau of Land Management (BLM) to Western Geothermal Partners, LLC. The Salton Sea lands are the last parcel of land to be acquired and paid for under the Cayley Geothermal and Western Geothermal 2006 agreement. Cayley Geothermal Corp. is a wholly owned subsidiary of Sierra. At the May 11, 2010 BLM geothermal land sale Sierra made the winning bids on 4,541 acres adjacent to its Reese River project, 1,880 acres at Sierra's existing Howard Project and 2,877 acres in close proximity to its Alum project.

About Sierra Geothermal Power Corp.

Sierra is a Vancouver-based geothermal energy company focused on the exploration and development of clean, sustainable power in Western North America. Sierra has 100% control over its 120,000 acre portfolio of geothermal properties in Nevada, California and British Columbia. Sierra's projects have a combined total estimated capacity of almost 400MW. One megawatt (MW) is enough to power 800 homes. www.sierrageopower.com

On behalf of the Board of Directors

Gary Thompson, P.Geo, President, Chief Executive Officer and Director

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This news release may contain forward-looking statements. All statements, other than statements of historical fact, included or incorporated by reference in this news release are forward-looking statements, including, without limitation, statements regarding activities, events or developments that Sierra expects or anticipates may occur in the future. Forward-looking statements can be identified by the use of forward-looking words such as "may", "would", "could", "expect", "intend", "plan", "estimate", "anticipate", "believe" or "continue" or similar words or the negative thereof. Forward-looking statements in this news release include statements that Sierra is looking forward to advancing Alum to drilling full sized production wells, that thermal equilibrium can be achieved at its Alum slim well 26-19, that the structurally complex accommodation zone at Reese River may be a zone of enhanced permeability at depth, that the size of the thermal anomaly at its Reese River project has increased to 70MW, as indicated by recent internally-derived resource estimates using a Monte Carlo model, and that Sierra's projects have a total estimated capacity of almost 400MW. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur. Readers are cautioned not to place undue reliance on these forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include general economic and market conditions, availability of working capital, changes in the law, actions of competitors, drill results, changes in circumstance and Sierra's ability to implement business strategies and pursue its business plan. In addition, all forward-looking statements involve risks and uncertainties, including the risks and uncertainties detailed in Sierra's filings with the applicable Canadian securities commissions, copies of which are available at www.sedar.com. We urge you to carefully consider these factors. All of the forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this news release are made as of the date of this news release and Sierra undertakes no obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise, except as required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.

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