Panax Geothermal updates on Dairi Prima project in Indonesia

Panax Geothermal updates on Dairi Prima project in Indonesia Project site by Dairi Prima Minerals, Sumatra, Indonesia (source: panoramio)
Alexander Richter 25 Nov 2011

In an update on the project status at Dairi Prima, Panax Geothermal announces the mining company that will power from the project has just received necessary mining licenses and other permits that now allow commencement of the project.

In a release this week, Australian geothermal development company Panax Geothermal Limited announces, it “is one step closer to commencing development of up to 25 megawatts of geothermal power for PT Dairi Prima Mineral’s (“PTDPM”) underground lead and zinc mine in northern Sumatra, with the approval of the final mining licences and permits for the PTDPM mine.

Panax Managing Director Kerry Parker is pleased to advise that granted the project’s Panax and PT Bakrie Power will also be entitled to each receive 50 per cent of all carbon credits generated from the geothermal project.

“Receiving licence approval was the final hurdle before PTDPM was able to proceed with its project development, with first production scheduled to occur by late calendar 2013,” Mr Parker said.  “Now that PT Dairi Prima Minerals has received these final approvals, Panax can look at advanced project planning and timeframes to start developing the geothermal project. This means that we are one step closer to achieving geothermal production and our first cash flow.”

Mr Parker said that achievement would make Panax the first Australian-based geothermal exploration and development company to produce electricity on a commercial basis from geothermal sources.

Panax signed a Binding Terms Sheet Agreement in August 2010 with PT Bakrie Power and PTDPM for the supply of up to 25 megawatts of geothermal power required for the operation of the mine.

This Terms Sheet Agreement is currently being finalised into a formal Power Purchase Agreement. Once developed, the project will supply up to 25 megawatts of geothermal power to the Dairi Prima underground mine at $US150 per megawatt hour for the first eight years and $US125 per megawatt hour thereafter.”

Source: ASX release by Panax Geothermal