interesting agm, page-11

Hello again,

Nightspore, my position still only adds up to a few percent, but as the opportunity presents itself, a few more PAX would be a welcome addition to the portfolio.

With regards to calling the shots, out of everyone I've ever spoken to from any geothermal company and beyond, De Graaf is exceptional. His history of building companies with large market capitalisations is showing through strongly, and the business model he has chosen is simply excellent. He is scouring the globe for the -best- projects known. The profitability of the industry rests upon temperature, flow rates, and the ability to work with experienced JV partners. De Graaf has crystalised this concept with the formation of Panax Geothermal. Pretty exciting stuff.

Jukes, I was wondering if you were there, but, as I was the only one asking questions during the allocated mid-speech question time, I knew you were absent!

Regarding the heat source, I have visited the region - in some areas you can physically see the interface of the two plates to an accuracy of 10m, due to the recently stress-fractured rock formations. De Graaf confirmed that heat is caused from tectonic activity, but did not eliminate a further radiogenic source of heat production. It was actually an area I wanted to clear up during question time, but cat-lady left my hands empty. Obviously, De Graaf has selected a project that does not directly overlie the rift, or else the wells would be structurally compromised, despite the localised high heat production zone.

To address your specific question of Puga-area geology, De Graaf indicated the region has a geology that is 'extremely' well understood, with regards to reservoir modeling and geological interpretation. This is an irrelevant point until the geology between two multi-million dollar wells is proven to allow near-horizontal hydraulic communication, but it does inspire confidence. De Graaf really did take the time to hammer home the message that the Puga project was very low risk, due to years of historical drilling and the data available from those excercises.

To me (and from some personal experience), the situation in India seems one of strong, incentive-driven schemes to get private power production in place (taking the development burden out of government hands). Jukes, I was also surprised to learn of the subsidy, which is per MW generated!!! Combine this with a tax holiday, and what was a thermally viable resource becomes a potential multi-billion dollar operation.

At the AGM itself, only 5 attended (including myself), so the question time 'would' have been very useful. I got a lot more from the meeting than expected, simply because of the pre-market release of the Puga/Krishna-Godavari projects, and the advance in working relationship with GPP.

Peter, De Graaf says he has some specific rigs in mind, including one in NZ, for drilling the LC project. The geology is well understood and not as difficult in nature as some of the horizons that have been intersected in the Cooper Basin. This fact (combined with the intended target depth of less than 4000m through sediment only) should see PAX require a powerful rig, but not of the massive size and power of the Lightning Rig. I managed to ask this question directly at the start of the meeting, and the team seemed to have a definite idea of what rig is suitable and where they can acquire it.



Anyway, it was all very interesting for people who are keeping an eye and an ear on the sector, I would highly recommend the next roadshow, the team are engaging and at the top of their game.