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Panax Geothermal to start drilling at Penola in September/ October 2009

Alexander Richter Alexander Richter 7 Aug 2009

Panax Geothermal Ltd (ASX: PAX) said it plans to drill its first production well, Salamander 1, on the Penola project in Southern Australia in late September or early October.

Reported by the company and published by ProActive Investors, “Panax Geothermal Ltd (ASX: PAX) said it plans to drill its first production well, Salamander 1, on the Penola project in Southern Australia in late September or early October.

Planning and preparation for drilling the well are in full progress. The permitting process is on schedule and site preparation has commenced.

In its quarterly update for the 3 months to end-June 2009, the company said it is in a sound financial position following the allocation of a A$7 million grant from the Commonwealth government’s Geothermal Drilling Programme (GDP) in April and a subsequent placing and entitlement issue.

Panax’s available cash was boosted from A$6.25 million at the end of the March 2009 quarter, to A$21 million at the end of the June 2009 quarter.

It has decided to seek a joint venture partner for Penola to realise the full development potential of this project. Detailed financial modelling of the project is nearing completion.

To develop its second geothermal project in the country, Tirrawarra in the Cooper Basin in Southern Australia, Panax is currently preparing a submission for a A$7 million grant from a second round of the government’s GDP.

The company has submitted applications for two grants for projects in the Kyrgyz Republic and in Tajikistan to Geofund of the World Bank. Panax can earn up to 65 percent in these projects.

In India, the group’s joint venture partner for the Puga geothermal project, Partner Geosyndicate Power Private Ltd, expects that the development permit for Puga in the north of the country will be issued during the current quarter. Furthermore, the local government has confirmed it will construct a power line to the town of Puga, which will place the project to within 30-40 kilometres of power infrastructure.

Panax’s joint venture partner in Slovakia, Geopark, has applied for three geothermal licence areas in the country. Under the terms of the Memorandum of Understanding between the groups, Panax will have the right to farm-in to these three tenement areas for a working interest of up to 75 percent.”

Source: Company announcement via ProActiveInvestors