PANAX GEOTHERMAL LIMITED - ASX: PAX

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Description

The long term vision of Panax is to become a major participant in the geothermal industry, both nationally and internationally. The scope of its geothermal interests will be broad, including both conventional geothermal resources (volcanic related) as well as enhanced geothermal systems (EGS) such as hot fractured rock (HFR) geothermal systems.

Limestone Coast Project (SA)

This advanced and highly prospective geothermal project is the principal and primary asset of Scopenergy Pty Ltd (“Scopenergy”), a company acquired by Panax in October 2007. This unique geothermal project was developed on the basis of a new and innovative exploration model, targeting ‘blind’ geothermal resources in sandstone units in an area of high heat flow in the Otway Basin. Work carried out to date has confirmed that all components are present in buried sub-basins in the Limestone Coast area. High heat flow has been established through temperature measurements in 19 existing petroleum and 26 water wells. The regional presence of a productive reservoir formation and the presence of a thick insulating layer inferred from detailed stratigraphic studies of petroleum wells in the nearby Penola Trough, the gas producing region to the north, as well as from reinterpretation of open file seismic data (1,460 line km’s), magnetic survey as well as gravity survey data.

Puga Project (India)

This advanced and relatively low risk geothermal project is located in the Puga Valley, 140km east of the tourist town of Leh. The project is located in a barren valley above the tree line. Drilling carried out by the United Nations Development Programme in the 1980’s has confirmed the occurrence of extremely high geothermal gradients and the presence of a shallow geo-pressured geothermal reservoir (e.g. 125oC at depths of less than 300m).

The Himalayan Geothermal Province extends into Tibet, where the Yangajing geothermal project currently produces 25 MWe of power, with a major expansion underway. A comprehensive geophysical survey (magnetotelluric) carried out by Dr Harinarayana (Director of the National Geophysical Research Institute of India and also a Board member of GPP) has delineated two geothermal reservoirs – one shallow and one deeper one at approximately 2,000m. The latter has an estimated minimum temperature of approximately 250o and has the potential to generate well in excess of 100 MWe.

GPP has had extensive consultations with the local government authorities and indications are that permits for drilling, and the associated rights to generate and sell electronic power, will be granted. The agreement between GPP and Panax includes a nine month option period at a cost of $50,000. Upon exercise of the option, Panax can earn 49% equity by spending A$6 million as part of a joint venture, with Panax being the operator of exploration and development. Work in the current quarter will focus on assessing the commercial aspects of this advanced geothermal project, including potential support from major development banks.

Krishnha-Godavari Project (India)

In August 2007, GPP was granted the exclusive exploration rights for geothermal resources in the State of Andhra Pradesh, including the right to drill shallow and deep geothermal wells. The Godavari-Basin has a sound geological database, including seismic and gravity data as well as some deep oil/gas wells located in a delta, near the coast.

The Godavari valley is a NW-SE trending rift zone (or graben) with an average width of 50km. The rift is characterised by high heat flow values (100 – 180 MW/m2) and geothermal gradients ranging from 60 – 80oC/km as recorded in shallow wells.

The SE part of the valley hosts 13 thermal springs with surface temperatures between 50oC – 60oC. Chemical analyses of two of these springs (Manuguru and Bugga) indicate the existence of geothermal reservoirs with temperatures between 173oC (Manuguru) and 250oC (Bugga). The power generation potential has been estimated at 50 – 100 MWe. The region has a good infrastructure including access to the electricity transmission grid.

Panax can earn 32% of the project by spending A$6 million as part of a joint venture, with Panax being the operator. The focus in the current quarter will be on an evaluation of the technical data and an assessment of local commercial conditions.

Kyrgyzstan Project

Panax has completed a detailed six month evaluation programme including technical, regulatory and commercial assessments, as well as discussions with the regional head office of the International Finance Corporation in Istanbul, regarding support from the World Bank’s Geofund. The occurrence of extreme geothermal gradients (>100oC/km) has been confirmed in the Sary Jaz granite in eastern Kyrgyz Republic. The Kyrgyz Republic has a recognised potential for the occurrence of:

- Hot fractured rock (HFR) geothermal resources;
- Himalayan style geothermal resources (e.g. China – Yangbajing, India – Puga); and
- Low to medium heat geothermal resources applicable to district heating.

The country has low ambient temperatures and has ample water available for cooling purposes, factors favourable for geothermal power generation.

Slovakia Project

Subsequent to the end of the final quarter of 2008, a Memorandum of Understanding ("MOU") was signed between Panax, and GeoPark Limited relating to the exploration and potential feasibility and development of geothermal areas in Slovakia. Panax will have exclusive and direct access to the large and comprehensive data-base of historical information (comprising deep well data and seismic data) that is available from GeoPark.

The MOU forms the basis by which the parties will work co-operatively together to proceed to the selection of specific geothermal licence areas in Slovakia, that are considered to be prospective for geothermal exploration and potential geothermal feasibility and development, and that will ultimately be suitable for commercial development purposes.

Slovakia is characterized by a high supply/demand gap for electricity, with very attractive electricity tariffs in place to encourage the development of Slovakia’s geothermal generating potential. Slovakia has an excellent power transmission grid in place, with the Slovakian Government encouraging geothermal development by providing tariffs of approximately A$385 per MWh.

Mine For

geothermal

Location of operation(s)

South Australia, Kyrgyzstan, India, Slovakia

Australian Basins

Otway

Address

Ground Level, 20 Railway Tce
MILTON, QLD, AUSTRALIA

Phone

07 3512 7000

Email

Website

http://www.panaxgeothermal.com.au

Last Updated

03/03/2010