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Torrens Energy with significant heat flows at Port August project

Alexander Richter Alexander Richter 20 Apr 2009

Australian Torrens Energy (ASX:TEY) advised of significant results from heat flow drilling completed in February 2009, at its wholly owned Port Augusta Project, South Australia.

In a company announcement, Australian Torrens Energy (ASX:TEY) advised of significant results from heat flow drilling completed in February 2009, at its wholly owned Port Augusta Project, South Australia.

Final heat flows calculated from diamond drill hole Theoden 2 recorded 101mW/m2. This result is well above the Company’s target of 90mW/m2. Modelled temperature estimates from this hole are approximately 200°C at 4300m depth, well within the range required for geothermal power production, and above geothermal production temperatures being deployed overseas.

Results were recorded from a diamond drill hole completed by Watson Drilling Pty Ltd, in February 2009. A combination of rotary mud and diamond core drilling was undertaken at Theoden 2 for a total depth of 372m, to enable temperature measurements to be taken from intervals where rock core was obtained.

In addition Theoden 2 is located just 400 metres from the Davenport Substation, the distribution node for the nearby Port Augusta Power Stations – an ideal connection point to access the National Grid. An independent study concluded that the connection cost to the National Power Grid may be as little as $10m. Ongoing exploration activity is supported by a matching AU$3m Federal Government grant under the Federal Government REDI programme.

An independent study completed by transmission experts John Thomson Inclusive Pty Ltd (JTIPL) concluded that network access for geothermal power production can be made via the Davenport Substation.

The projected customer demand growth within the Upper North Transmission Network is around 3.0%, and current upgrades are underway to the Substation that will result in transmission capacity to accommodate about 100MWe of new generation in the near future.

The study completed by JTIPL confirms that connection via the 33kV network can be completed for approximately $10m for the first 50MWe of geothermal power production, and an additional $22m for up to 200MWe production.

“The discovery of high heat flow at Port Augusta represents an exciting new development in Torrens Energy’s heat mapping programme; The predicted temperatures are well above those currently being exploited overseas, which when combined with commercial benefits created by seawater cooling and market access, make for a leading Australian geothermal play.”

“It’s clear that the next challenge faced by the rapidly advancing geothermal industry in Australia will be to cross the nexus from “proof-of-concept” to commercial development. Torrens Energy believes that the commercial drivers at locations like the Port Augusta will have far reaching benefits in this respect”

Source: Company announcement via Proactive Investors