TER: You mentioned your world-class team. Tell us about some of your people.

RB: The team is world-class, without a doubt. It includes some people I've worked with for years and others who are on board with me for the first time. The President of our U.S. Operations is Dr. Frank Monastero, who supervised development and operation of the 270-megawatt Coso geothermal power project at China Lake, California. Frank has been deeply involved in the industry for more than 20 years.

Monte Morrison, as VP of Operations, has overall responsibility for Magma's domestic and international power plant operations, as well as maintenance and support of development and acquisition activities. During his 24 years in the industry, Monte's managed many geothermal plants in Nevada, California and Hawaii.

Rich Hoops' experience in the geothermal arena dates back even further—34 years. Rich, who worked in various U.S. Department of the Interior agencies and serves now as Magma's Project Manager, probably ranks as the singular expert on geothermal leasing and resource management in the U.S.

It's also great to be working again with some of my colleagues from past enterprises. Sandra Lim, our CFO, for instance, was my CFO at Lumina Copper, too. And John Selters, who ran Lumina's Chilean operations, is now with Magma in that same capacity. It's a great team.

TER: Magma's in its first phase as a growth company. As it matures, could you address whether it might be a dividend-yielding investment?

RB: Absolutely. That's precisely our objective and it can't happen quickly enough! We are in the fast growth years right now. We're putting our shareholders' equity into growth, into expanding our power production, buying new operations, building our business as a long-term, sustainable cash-generating business.

At some point—in the medium term—we will morph into a value investment, an income-generating company that will be valued against other independent power producers, other utilities, other energy generators. We'll be valued based on our cash flow and our income—the financial metrics that measure value in large companies.

As far as I'm concerned, that can't happen too soon because that will be the most tangible symbol of achieving our business plan.

TER: How does Magma's business plan differ from those of your previous companies?

RB: The main difference between geothermal power and the metals business is that geothermal is based on long-term power purchase agreements that are locked in, whereas with metals, you deal with cyclical world markets you can't control. So with geothermal you have long-term sustainable cash flow. Banks love that. It's a business you can leverage up much more significantly than with most mining projects. So once we transition from being a growth stock to a value stock we expect to generate very large cash flows and, obviously, pay significant dividends to our shareholders.

TER: Another big difference between geothermal and mining—and apparently one of the environmental pluses that drew you to geothermal in the first place—is with mining it's typically a depleting resource. With the recycling of water into geothermal reservoirs, in contrast, you'd have a sustainable resource that theoretically could go on forever.

RB: Absolutely. That's a huge difference and it's one of the reasons I love it. All mines ultimately are non-renewable. Geothermal is inherently renewable. This is a form of power that can go on for literally thousands and thousands of years; and once you get these plants going, in terms of human lifetimes, they typically go forever.

The other nice thing about it is that once you pay the high capital cost of developing a geothermal plant, operating costs are typically very low—a fraction of the revenue base of these plants. So, again, the cash flow is very significant.

TER: Pretty exciting. Could you comment on how you expect the space to evolve? For example, back in 2003 and 2004, there were maybe 20 uranium companies. And all of a sudden that became a hot space and by 2007 there were hundreds—500, 600, 700—uranium companies. Do you see this happening in geothermal? Or is it too capital intensive?

RB: As I said before, two negatives at the front end will keep out lots of people. Number one, drill holes are expensive and high-risk. It has better odds than in the mining industry, but there is still significant drilling risk.

Number two, the capital costs to go to production in geothermal energy are quite high, about $4 million per megawatt. That keeps out an awful lot of entrants, so you're not going to see the proliferation of companies the way you saw in the uranium business. Having said that, in due course you will likely see more companies in this space and I think that's great—because ultimately they'll be feeder companies for us to acquire if they're successful.

TER: Tell us about a few companies outside the geothermal arena that you're still keeping an eye on.

RB: Well, 95% of my time is really on building Magma right now. It's the focus in my life. But I'm still a large investor in the Lumina Group, a tremendous management team that worked with me to successfully acquire and divest our four copper companies in 2006–2008. We've put money into Anfield Nickel Corp. (TSX-V:ANF), which I think has a lot of upside, and Ventana Gold Corp. (TSX:VEN), one of the top performing companies this year in Canada. And I've personally invested in a number of copper companies because I happen to like the future of copper.

TER: So you still like copper.

RB: Yes. Actually, copper is an energy metal as much as geothermal is an energy source. Copper has a great future because it's the second-most conductive metal, with incredible applications in energy transmission and generation. What's mostly driving copper right now is the build-out of China's energy infrastructure. So I still like the copper space. And I'm still very much into silver.

TER: Of course. You're still chairman of Pan American Silver Corp. (TSX:PAA; NASDAQ:PAAS), and that's a terrific story, described earlier this year as one of the best success stories to come out of Vancouver in the past 30 years.

RB: Really, the model for what I'm doing in Magma is Pan American's. It's a great model for me to use in Magma's growth.

TER: Any parting comments, Ross?

RB: As I said, Magma is the focus of my life, but I love copper. I love silver, I love gold. And on the whole, I'm very bullish about most commodities. The world is still growing very actively and the consumption of commodities is growing very significantly. We are in a long-term commodity bull market that will stay with us for quite a few years.

TER: Our readers will appreciate your insights and we look forward to watching another of your dreams come true.

RB: It's all about creating shareholder wealth and part of that is making sure people understand what you're doing and where you're going. So I sure appreciate your interest, this will help in getting us there.

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