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Panax Geothermal joins forces with Canadian Molten Power for project in Indonesia

Panax Geothermal joins forces with Canadian Molten Power for project in Indonesia Panax Geothermal's Salamander-1 well at Penola, Australia (source: Panax)
Alexander Richter 8 Aug 2011

Canadian Molten Power Corp. funds US$10 million for exploration and development at Indonesian projects of Panax Geothermal, receiving a 50% stake in Indonesian subsidiary of Panax Geothermal.

Reported this morning from Australia, geothermal development company “Panax Geothermal has landed a funding agreement with a privately held Vancouver-based company Molten Power Corporation for exploration and development costs in its portfolio of geothermal projects in Indonesia.

Molten will contribute the first $10 million in exploration and development funds and receive a 50 per cent stake in the Panax subsidiary that holds Panax’s share in the projects in return. Further exploration and development costs will be shared between the two parties on a 50-50 basis.

Panax managing director Kerry Parker said the proposed partnership would allow Panax to aggressively pursue the development of its highly prospective assets in Indonesia. It has four projects with a combined targeted capacity of 300MW, of which Panax’ share is 165MW. Indonesia has been offering generous tariffs for geothermal projects to help support industrial development and replace highly expensive diesel generation.

“This transaction is a market-based endorsement of the unrecognised value of Panax’s assets as it implies a value for the Indonesian portfolio, which is twice the company’s current market capitalisation,” Parker said in a statement. “It’s a significant portion of funding that can be applied directly to our projects in Indonesia, and provides funding certainty for Panax as we grow into an international geothermal development and production company.” Molten will also make a direct $1 million investment in Panax, buying shares at 2c each, the same price as a recent rights issue.”

Source: ClimateSpectator