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| Geothermal Power Plant |
Growth in World Geothermal Generating Capacity |
Panax’s key asset is the advanced and ready to drill-test Limestone Coast Geothermal Project in South Australia, which has an estimated generating potential*) of approximately 1,500 MWe, i.e. the equivalent of two coal fired power stations or enough power for more than one million homes. The Company will not only focus on clean power generation but will also embrace direct use of geothermal heat for use in e.g. industry, district heating (or cooling), and desalination.
SHORT TERM OBJECTIVES
In the short term, the Company will focus its efforts on: |
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Progressing the unique (as recognised by the Federal Government) and well researched Limestone Coast Geothermal Project in South Australia. This project, which targets hot aquifers in buried sedimentary basins can be classified as a sediment hosted conventional geothermal project, has an estimated generating potential of 1,500 MWe from three delineated sub-basins, with up to 10 MWe per production well, and has an excellent infrastructure location, including access to the national transmission grid; |
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Completing detailed evaluations of options that the Company has acquired to enter into joint ventures on a number of highly prospective geothermal resources in India and Kyrgyzstan, including the advanced Puga project in the Himalayan Geothermal Province in India; and |
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Furthering our search to acquire an advanced commercial geothermal project which is ready for development. This international search is being conducted on our behalf by a group of highly experienced geothermal consultants. |
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The Company has adopted a policy to offset sovereign risk in developing economies through seeking partnerships e.g. with international development banks.
To realise our ambitious plans, the Company has commenced a recruitment drive for the appointment of a high calibre exploration and development team. In the interim, to start our momentum, Panax has entered into long term agreements with a number of national and international geothermal consultants including Mr William Cumming (US based, ex-Unocal) and GeothermEx (US based) as well as Dr Graeme Beardsmore of Hot Dry Rocks Pty Ltd.
Geothermal Energy
The rationale for focussing on geothermal energy is directly linked to the threat of global warming as caused by CO2 emissions from the continued use of fossil fuels. National and international momentum is building for a 'climate change pact' and this foreshadows that clean energy generation is the key to our future. Geothermal energy is one of the very few sustainable sources of energy which can replace base load power from fossil fuelled power stations. Compared to other sustainable energy options, geothermal resources are still not valued according to their commercial potential for the long term generation of clean base-load power. This is the opportunity which Panax aims to turn to good account.
The Australian Federal Government has recently signed the Kyoto Protocol and has indicated that it will adopt new policies, including the granting of significant financial incentives to foster the development of clean energy. The 'promised' introduction of a carbon energy target by 2020 is a step in the right direction. It is hoped that future policies will recognise that the various emerging renewable energy policies do not share the same development time line. As such, the adoption of long term sub-targets for specific technologies (e.g. geothermal, solar thermal) would foster equal opportunities across the various technology options, thereby avoiding advantaging established technologies such as wind. It is expected that details of the new policies will become clearer following the release of the draft 'Garnaut' report due in June 2008.
Our Business
The nature of our business is the identification and exploration of prospective geothermal resources and to convert these into geothermal reserves for the production of commercial geothermal energy. Geothermal power generation is not dependent on new technology (i.e. no new technology risk). The risks of our endeavours are directly related to the conversion of geothermal resources to economic geothermal reserves, i.e. the economic extraction and utilisation of geothermal energy. In that sense it is very similar to risks associated with mineral or oil/gas exploration.
The Company is in an excellent financial position with nearly $10 million in cash and no debt. It intends to preserve its capital by seeking a joint venture partner for the advanced Limestone Coast Geothermal Project as well as support from development banks for initiatives in India and Kyrgyzstan.
Since Australia's first listing of a geothermal company in 2002, a large number of geothermal exploration companies have listed on the ASX. The main focus of many of these is directed to deep HFR prospective areas, lacking known geothermal resources (i.e. long development time lines). In contrast, Panax has a strategy to develop a balanced exploration portfolio ranging from: |
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The advanced and ready to drill test Limestone Coast Geothermal Project in South Australia; |
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Securing HFR prospects/resources in regions of exceptionally high heat flow (e.g. Kyrgyzstan and India where temperatures of more than say 250°C are likely to exist at relatively shallow levels; and |
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To the acquisition of conventional geothermal projects ready for development. |
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| The advanced Limestone Coast geothermal project is a unique exploration project, targeting conventional geothermal energy in sedimentary rocks. Unlike HFR or EGS projects and prospects, its risks are not related to the development of deep underground reservoirs as it targets existing hot geothermal brines in buried sandstone reservoirs in an area of high heat flow. As such, the timeframe from drill testing to development is estimated at three years, i.e. much shorter than that of the 'classic' HFR targets. In addition, drilling costs are substantially lower in this geological environment. As a consequence, the Limestone Coast Geothermal Project has the potential to be Australia's first, non-seasonal, large scale renewable base-load electricity generator. |
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