main sp triggers

Hi everyone, just some speculation here about what the major triggers for SP movement will be. Any comments/criticism would be appreciated, if anyone agrees/disagrees with my targets. If you don't want to read lazy-Friday ramblings, skip to the last paragraph!

Estimating specific SP targets is not reliable, due to the difficulty in predicting accurate project values (with nearly no merit in trying to guess NPV, EPS, etc.), brought about by such unknowns as carbon trading, wholesale electricity price, direct competition (or lack of), further political conditions, flow rates, well yields, general market sentiment, etc.

Event targets, however, are easier to predict. These targets assume that each stage is eventually completed, and are not constrained by schedule fluctuations.

Successful drilling to 3700m (end of sediments) should see mild accumulation if markets conditions remain at this level or turn a shade more positive. If the market darkens, we could expect stagnation, and perhaps a listless drift upwards of a few cents.

Continued success once the granite zone is intersected should cause a positive SP performance in all but the worst market conditions. I am not proposing that drilling is the most highly-priced risk, but there are definitely a lot of sideliners waiting to see if GDY can even strike target depth. I'm not expecting a feeding frenzy on the way down the well, but the last 500m of HAB3 should heat things up a bit (lame pun intended!) We have the best rig, an experienced crew, and a granite expert on hand, so my guess is target depth by November, as expected. Expecting GDYO to be very firmly in the money by this stage.

As target depth is approached, it is almost certain that hydraulic communication between the HAB wells will be demonstrated, as Earth's largest reservoir of granitic fractures is already proven to exist. Despite the certainty, further gains will be made here as the market realises that HAB3 is moving rapidly towards success, and variables for delay/cost overruns are taken off the table.

Upon intersection of target depth, we will have conclusive data regarding temperature and pressure, and inconclusive - yet encouraging - data on flow rates/reservoir volume. I think that despite the current indications of quality, this will be the time of greatest SP movement (a current guess would put this surge at late November), and a media laser-beam will be focused upon GDY as the entire Australia power industry turns around and watches what is about to be achieved. Sitting on the successful side of target depth intersection will be a truly exciting time to be a shareholder, and that is not something you could often say about the market.

Obviously the initial flow test results will bring about a huge flurry of interest, particularly focused on the outstanding temp/pressure/flow rates that have been demonstrated once and only need to be re-established. Realistically, anyone who has taken more than a glance at GDY would be able to see that the the thermal resource is of high enough quality. The biggest unknown, and the one that matters by far the most (considering variables like flow rates can be enhanced) will be the thermal depletion rate.

I would rank the results for thermal depletion as EASILY the most important, yet, because they are last to come, may not be the biggest SP trigger. It still looks like we will see the biggest SP movements in the few weeks after 5000m is reached. This whole project relies upon the huge capex being supported by a long operating life. We know the resource is there. We very nearly know we can get it out of the ground. The real question now is the economic life. I have seen all estimates are upwards of 50+ years, but who really knows until we sink the well and monitor the rates?

I would call the thermal depletion data the true proof-of-concept, not the flow test in it's entirety. Greed will see us doing very well before this, as people scramble for shares, but the biggest, most conservative investors may be waiting for what could be perceived as the last piece of conclusive evidence before HFR goes commercial.

Then of course, there is the pilot plant (by which stage HFR will be a done deal - surface operations are no mystery), and the $226M HotRock40 plant (LEDTF application for $75M contribution), scaling up from there, 500MW, 10 000MW, etc etc, until supply meets demand, which current research shows will not happen for many years.

Given the quality of the resource, GDY may not need

Anyway, basically, I see the most gains for us shareholders shortly after target depth is intersected and flow tests are commenced, due to the enhanced probability of success but these are by no means the results that the industry rests upon. Successful drilling/positive initial data will bring the highest returns, and if this can be achieved within the given three month schedule, the are very few barriers remaining to suppress GDY's SP. The reserve expansion and demo plant phase will just be an excellent time to build upon already large gains. Does anyone see any other major targets, or view the triggers for SP movements differently? I would be interested to hear the opinions of fellow investors and non-investors alike.

Thanks.