Article originally appears on Altenergystocks.com.

Stockgumshoe.com teases out the geothermal stock that is the current come-on for Casey's Energy Report. AltEnergyStocks.com reviewed a sister publication, Casey Energy Opportunities, last year.

Magma Energy (MXY in Toronto) and (MGMXF.PK) on the pink sheets... is the latest endeavor of Ross Beaty, that “mining maven”... who has indeed been called the “broken slot machine” for his record of past success (he sold Equinox to Hecla Mining 25 years ago, and more recently built Pan American Silver into the world’s largest silver producer). In the following interview that he gave almost a year ago, before Magma went public, he states that he wants to build Magma into the biggest business of its kind in the world.

And the company did have its Canadian IPO this Summer, a bit behind their original schedule, but they got a fair amount of attention and at the time it was the biggest Canadian IPO of the year — and Beaty apparently got what he wanted, in that interview he noted that he was hoping the IPO would value Magma at $300-400 million, and it’s now got a market cap of C$450 million. That makes them one of the bigger “junior” companies in the space, bigger than the small firms that have just one or two sites under development like U.S. Geothermal (HTM), but much smaller than Ormat (ORA) or Calpine (CPN).

Probably the closest competitor, in terms of market cap size and focus, is Ram Power (RPG in Toronto), (RAMPF.PK) on the pink sheets — one of two geothermal stocks in an uptrend at the moment, according to MarketClub), which is a similarly new company in its current form, a rollup of Ram Power and the junior geothermal companies Polaris Geothermal and Western GeoPower, both of which have been teaser targets in recent years as well.

Magma is still very much an early stage company in terms of operations — they are buying into a big established geothermal project in Iceland (they own about 43% now and are investing in expansion, it’s primarily a site that generates power for aluminum smelting), and they own one operating geothermal site in Nevada (Soda Lake, which has been operating for close to 20 years and is at about 1/3 of its nameplate generation capacity).

Their other projects are elsewhere in the Northwestern US, in Utah and Oregon as well as more sites in Nevada, and in South America, with concession applications in Peru and some early-stage projects that they own in Argentina and Chile. Aside from Soda Lake and Iceland, it’s all early stage exploration, or flow testing, or drilling and mapping that they’re doing right now. I have no idea how long it takes to get these projects off the ground, but it sounds like a lot of the work they’re doing.

Iin addition to the few places where they’re actually doing exploratory drilling, is updating old seismic and survey data from these sites that is in some cases 20-30 years old. The company describes their pipeline as having 24 early stage projects and seven advanced stage exploration projects around the world, including several new exploration targets that they just acquired in a government auction earlier this year.

The way Magma reports its projects, they have 86 MW of reserves (75 from Iceland, 11 from Soda Lake — though from what I can tell Soda Lake is only 8MW right now) and over 600MW of “resources”, which is apparently the documented potential of their other projects. Of that 600 MW about half is Iceland (HS Orka is the site they have part ownership of), and the other half is split between one big discovery in Chile and a number of smaller Nevada and Utah properties.

Another 20 or so early stage properties are not counted in the reserves or resources. According to the timeline they’re projecting, they will boost production to about 100 MW overall next year, and bump up slightly again in 2012 through expansions in Soda Lake and Iceland, then have production close to double in 2013 with two new Nevada plants online, and jump considerably in 2015 with several of their other projects joining the party, including most notably the large 140 MW Maule project in Chile. So that’s the five-year growth plan, and their goal is to be acquisitive and create a global company to consolidate global geothermal generation, so they may well buy up some other projects along the way.

Magma does not have any debt, and they’ve raised well over C$100 million recently (from the IPO, the over-allotment, and a subsequent private placement) and have another C$20 million in credit available, so they should be in fine shape financially, and ready to keep growing by investing in exploration and perhaps acquiring other companies and projects, but there seems little chance that they’ll be profitable anytime soon — which is perhaps why they funded the Iceland investment by selling new stock instead of using their IPO proceeds.

They have already received some federal money for their Nevada projects, and it looks like part of their calculus certainly depends on federal “green energy” grants and similar funding, which is no surprise. You can see Magma’s most recently quarterly report press release here, which details their work so far this year and their financial position, and a December investor presentation that goes into some more detail on their projects here [pdf file].

I don’t have any particular insight into which geothermal stocks are the best bet, but it does seem that Magma might be the best “story” right now — having a charismatic and successful resource investor at the helm, lots of cash, and a nice big position in the most well-known geothermal resource in the world (Iceland) certainly helps. As I noted, the other company that has a somewhat similar profile is Ram Power, and smaller firms include US Geothermal (HTM), GTH in Canada — this is the other one that MarketClub thinks is in an uptrend) and Nevada Geothermal (NGP in Canada, NGLPF on the pink sheets), both of which are currently generating electricity, and Sierra Geothermal (SRA in Canada, SRAGF on the pink sheets), which is more capital constrained and not yet producing, but apparently has some promising sites and permits and may be bought up by Ram Power (or so I’ve read in one place, at least). The biggest pure play I know of is Ormat (ORA), which is an Israeli company as well known for building geothermal plants for others as for operating them themselves, it’s fairly expensive, but profitable and much less volatile.

So there you have it — one more geothermal stock to throw on the pile, it may or may not work out as they hope but I’m quite certain that this is the pick teased by Casey’s Energy Report. If you’re more “hotted up” about this sector than I, I’m sure you’ll have some insight or information to share … that’s why the friendly little comment box is sitting below, just waiting for your input.