additional capital required

Hi All,

Have been reading through recent release of Material Distributed at Cleantech Forum 2009. Page 6 is a very interesting read and believe that it gives an indication of capital requirements over the next three years. My estimate is $21M , with additional $35M required at each new 5MW power station.

Phase 2 of development indicates they require $35 Million for each resource (am assuming that this is for a 5MW power station in full, as it is estimated to cost $5M to drill 4km deep wells - Victorian Government Research). This will take 27 months to build, targeted for completion at the end of 2011.

This means that they will need to begin September 2009, otherwise they will not reach build and revenue generation targets.

Partnering with LKO (Lakes Oil NL) and WAS (Wasabi Energy) is pointed out on page 2 of the presentation. Capital sources from these partners are as follows:
1. LKO has $5.6M cash on balance sheet to contribute with a investment program requiring capital of $40M+. Therefore an unlikely source of capital.
2. WAS has less than $1M cash on balance sheet to contribute.

$14M will potentially flow from Federal Grants, leaving $21M to be raised to reach the shortfall. This is two times current market capitalisation.

In the short term I see that the share price of this company will fall. The key over the next 6 months will be to get a cornerstone investor that will likely fund future capital requirements.

Best of Luck
Lost