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Snowflake
On February 22, 2011, the Company entered into a ground lease with Rocking Chair Ranch, Inc. for 10,888 contiguous acres in Navajo County, Arizona, and may secure up to approximately 22,000 acres in the future, to pursue the development of a wind energy project of up to approximately 200 MW. The property will be used solely for wind energy purposes. The lease extends for a period of up to 30 years. A $50,000 deposit was made in 2011, and 30 days following the operations commencement date, the Company shall issue to Rocking Chair Ranch, Inc. common stock of the Company with an aggregate market value of $250,000. Rent will be based on the greater of the percentage rent or the minimum guaranteed payment of $5,000 per MW per lease year. The percentage rent will be based on the project's gross revenues multiplied by the applicable base percentage which will be 6% in lease years 1 to 10, 6.5% for lease years 11 to 20 and 7% for lease years 21 to 30.
As a result of Barstow Project termination, the Company anticipates moving the meteorological towers from the Barstow Project site and erecting the towers at the Snowflake Project site in the fourth quarter of 2011 to test the wind resource. The Company also anticipates commencing work to confirm environmental and transmission suitability and economic feasibility.
The Snowflake Project is still several years away and is subject to obtaining wind energy zoning from local authorities, a PPA, an interconnection agreement, financing, and other development milestones.
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