Panax Geothermal Ltd (ASX:PAX) has been awarded a grant of $7 million under the Commonwealth Government’s Department of Resources, Energy and Tourism (“DRET”) “Geothermal Drilling Programme” for the drilling of a production well in the Penola Trough in South Australia.
The successful outcome of "our grant application is regarded by the Panax team as recognition of the overall merits and scope of the Penola Project, which is part of the broader Limestone Coast Geothermal Project area."
The quality and the advanced status of the Penola Project is under-pinned by a “Measured Geothermal Resource” of 11,000 PJ*), the largest known in Australia.
A recently completed pre-feasibility study has shown that this project has the potential to generate low cost zero emission base load power at a total cost (Capital and Operating) of $63 per MWh.
Panax has secured a contract drilling rig, which is scheduled to spud its first production well, “Salamander -1” in September, 2009.
The Company is confident that the Penola Project could become the first, grid-connected commercial demonstration plant in Australia.
Proactive Investors Comment:
The $7m grant underpins the funding and drilling of Panax's first production well. Receiving the grant and funds completes the missing link for Panax. In the lead-up to the spudding of the well, and beyond it looks like Panax is in for some exciting times ahead.