Hmm, I can't tell you what the market thinks, but to me, this...

Hmm, I can't tell you what the market thinks, but to me, this news is definitely an excellent step for GRK, and shows a good degree of foresight by the team in charge.

To make the geology at O.D pay dividends looks to be a difficult task, at least according to current thermal gradient estimates. This announcement is not a flag of surrender - the team is not saying O.D won't work - but it does demonstrate a diversity of strategies that the market 'should' reward.

To compete with coal, you really need to be dealing with the temperatures demonstrated in the Cooper Basin, i.e 270C - 300C. This is based on simple, reliable calculations involving the efficiency of converting MWthermal:MWelectric. However, an number of variables, including the extent of carbon pricing, and the final transmission cost for GDY, may see GRK developing a viable business model at O.D.

'If' they don't succeed, there is still the world's best geothermal region (C.B) listed amongst their GELs, which they may choose to explore whilst pursuing the O.D project.

To me, a large difference has been made to the value of the company, in the order of millions of dollars. Real constraints still apply, and will stop an SP wildfire (for example, pricing barriers to geothermal exploration drilling, funding requirements [not a huge issue if geothermal proves viable in a couple of months], drilling rig lead times, shortage of skilled drilling personnel, etc).

I think we are looking at a re-rating, and whilst I can't call the level it will rise to, I would call a base at 15c, being a very conservative valuation on this company. I think a fair price would be ~around~ 20c, but the market rarely agrees with me!

Some points to consider when calculating why GRK is listed at a lower market cap to it's peers, would include the lack of a strategic partner, lack of diversified GELs, and lack of funding. Now the diversity has been addressed (very well addressed, I reckon), and funding/partner will not be a long-term issue - the situation could change on any given day, completely out of the blue. Best to get in before that day, and it's corresponding re-rating....

To cut it short, I think we won't just see an empty spike, but will see some real progress from here...

Cheers