Innovative drilling financing by Geothermal Resources in Australia
Australian Geothermal Resources Ltd just annnounced a unique way of raising financing for drilling efforts of a geothermal developer with a share purchase plan tailored to meet financing needs for drilling efforts.
In a recent article in iStockAnalyst, it is talked about a unique way of raising financing for drilling efforts of a geothermal developer in Australia. With a share purchase plan tailored to meet financing needs for the drilling efforts, this is to me a uniquely tailored approach of getting necessary financing.
According to the article, “Geothermal Resources Ltd (ASX:GHT) is to offer eligible shareholders an opportunity to participate in its share purchase plan to each buy up to AU$15,000 worth of shares at 32c each, which is an 18pc discount to the average closing price for the last five trading days.
The offer is available to shareholders who were on the Geothermal Resources register on May 18, and will open on May 25 and close on June 12. In accordance with a waiver granted by ASX, the maximum number of new shares that can be issued under the plan is 9.9m.
Should shareholders apply for more than this number, entitlements will be scaled back proportionally.
Proceeds from the plan will be used in the first instance to match remaining funds of about AU$1 million (US$ 750,000) from the Commonwealth Government’s Renewable Energy Development Initiative (REDI) grant for ongoing deep drilling on the Frome project.
“Our deep drilling to date has been highly successful in confirming abnormally high geothermal gradients above deeply buried granite bodies.
“These represent potentially gigantic heat reservoirs capable of yielding temperatures of more than 200 degrees C at economically exploitable depths,” chairman Dr Bob Johnson said.
Additional funds will be used to progress selection of optimum target areas for drilling in the Crower project.
“There are potentially huge volumes of hot water stored in sandstone aquifers and our aim is to test whether these large geothermal energy resources can be tapped.
“Major power lines crossing the project area mean that any discoveries could be rapidly commercialised,” Dr Johnson said.”