june cashflow report out, page-7

Hi Nightspore,

My friend, who I view as somewhat of a market 'guru', says the same thing about options. The premium above $1.50 is still quite thin, and reasonably untested, undoubtedly putting many investors like yourself off the idea.

Regarding Sanfords, for GDY to track back to 70c or so would wipe almost $200 million off the market cap. Within any given market conditions, this is EXCEEDINGLY unlikely. There are few options for creating a sustainable, renewable power industry in Australia, and geothermal is by far the most promising and realistic candidate. At less than $45/MWh, the industry can only move forward from these general levels.

This is not to say there won't be corrections in the individual SPs, but unless the technology proves non-viable, we are in a very strong position heading forward. And with regards to the technology, we know geothermal to be a proven and established technology, supporting thousands of MW production at present. The difference here is the HFR heat exchanger, and the superior temperatures/pressures. Conventional geothermal will most likely prove less viable than HFR geothermal, and especially so when considering the Cooper Basin project.

Positive results from HAB3 will insulate against almost any market cycle, and it will take nothing short of a complete failure of both the demonstration plant and the HFR concept to bring GDY down in the long term.

And with respect to Sanfords, it seems their figures are misleading, to the point of being utter nonsense. They also quote a figure for GRK, you told me what it was (from memory it was 12c?). Well, the problem is, GRK don't actually have 12c/share assets. The fixed assets in Ortahaza, combined with other fixed assets, cash and the Geofund refund would barely make up 4c/share. These folks may just be using figures to make their service features seem reliable and worthwhile. At the very least the figures are outdated and inaccurate.

If it is the beginning of a bear phase (which I strongly doubt, given our economic condition), then we as shareholders in GRK have much more to worry about than GDY holders. GDY has a real and viable business model, with achievable objectives in an attractive timeframe. GRK, as an entirely speculative stock, is likely to get hit harder, possibly much harder, perhaps not by losing SP value, but by having more resistance applied to any upwards movement. I certainly hope not, but that the way it is on these speccies.

And I fully agree that at this stage the options are much higher risk, and have a looming expiry date. I would have avoided them if I was not so fully confident that GDY can and will succeed in their objectives. Everything is in place for an enormous run directly to the spotlight of the ASX. The rig is more than capable. The team is the best. The technology is theoretically and practically sound. The funds are in place and gathering. And most importantly, the resource is unprecedented in size and quality.

Basically, this is going to happen.

Will it happen before the options expire? Holders can only research the situation and decide for themselves, though the most likely outcome will be success.

Anyway, Nightspore, there is less than a month until we get some idea of how the deeper drilling is progressing, and if all goes as planned, the well will spud in the next 5 days. We've been waiting a long time for that development. Are you looking for a re-entry into GRK/OA/GDY/O?

Have a good weekend. Its great here in Sydney, just sitting in the sun on the balcony, drinking a Coopers and watching the harbour go by...

Cheers