Geodynamics reports potential of 20 MW plant for Savo Island project
Geodynamics reports that initial exploration studies confirm an inferred resource of 37 MW for its Savo Island project on the Solomon Islands that provides potential for the development of a 20 MW power plant.
Australian developer Geodynamics Limited (ASX:GDY) and its joint venture partner Kentor Energy Pty Ltd, a subsidiary of Kentor Gold Ltd (ASX:KGL) announce the results of initial exploration studies that confirm the presence of a high quality geothermal exploration prospect at their Savo Island Project in the Solomon Islands.
In November 2012, Geodynamics entered into an agreement with Kentor for Geodynamics to acquire up to a 70% interest in the Savo Island Geothermal Project through a two stage earn-in agreement under which Geodynamics would earn an initial 25% through funding initial exploration activities, and could earn a further 45% through funding exploration drilling and completion of a feasibility study. Since the completion of this agreement a magneto telluric geophysical survey (MT survey) covering 77 sites on the island has been completed and the results analysed to produce a 3D conceptual model and Initial Inferred Geothermal Resource Assessment of Savo Island.
The independent resource assessment, a summary of which is attached to this announcement, was prepared in accordance with The Geothermal Reporting Code, Second Edition (2010). The full report was prepared by Volcanex International, and estimates a total median Inferred Geothermal Resource of 269 PJth within the prospecting license boundary. Using the P50 estimate the report concludes that Savo Island has a sufficient Recoverable Thermal Energy that if recovered and converted would be adequate to generate 37 MWe for 30 years.
This generation capacity would be sufficient to supply more than the total current requirement of the city of Honiara and the Gold Ridge Mine, situated 25 km from Honiara.
The resource assessment provides sufficient information and confidence to justify the progression of further exploration activities, including exploration drilling, to prove the reservoir conditions and the prospectivity of the project for commercial electricity generation.
An independent peer review of the data by Sinclair Knight Merz Limited, a leading geothermal consulting company, states that “there is sufficient confidence in the resource assessment to encourage an exploration/production drilling programme in the most prospective area to the southeast of the crater.”
In parallel to the completion of the initial resource assessment, a scoping study has been completed to assess the viability of potential development schemes to extract and deliver the power from Savo Island. The scoping study assessed the potential for the development of a power plant of up to 20 MWe and identified a viable potential project scheme that would bring significant
benefits to all stakeholders.
Through the expenditure on preliminary exploration and the completion of the Resource Assessment and Scoping Study, Geodynamics has fulfilled its commitments under Stage One of the Earn –In Joint Venture with Kentor Energy. Completion of Stage One will see Geodynamics take a 25% interest in the Joint Venture along with operatorship of the Project.
With the completion of the initial technical studies, Geodynamics will now focus on progressing discussions with the relevant ministries within the government of Solomon Islands on planning and approvals for further exploration activities, and discussions with the Solomon Islands Electricity Authority in relation to electricity supply and power purchase agreements. Geodynamics is actively engaging with customary landowners through community consultations and workshops as we
proceed with our next steps in advancing the project and would target initial exploration drilling to be undertaken during the 2014 dry season.
Geodynamics Managing Director and CEO Geoff Ward said “The completion of the initial resource estimate and scoping study is a key step in progressing the Savo Island Geothermal Power Project, which is aiming to replace high cost diesel generated power in Honiara and the nearby Gold Ridge Mine with cheaper and cleaner geothermal power. The positive outcome from the initial resource assessment and scoping study confirms our initial assessment that Savo Island is a high quality geothermal project with significant potential to provide a cheaper, cleaner, more reliable power to customers in the Honiara area than the current diesel power generation system.
We look forward to working with the government of the Solomon Islands, the local community and customers to take this project forward.
With continued success in the exploration program and the positive engagement we have received from the Solomon Islands Government, the Savo Island Project could be supplying power to Honiara within 4 – 5 years.”
Source: Geodynamics release (pdf)