strong companies comment, page-4

Well, my speculation regarding the geothermal syndicate was pretty lousy. It seems GRK will not be participating with the PAX/HRL drilling syndicate, which has been negotiated through MB Century.

If this company don't pull their finger out and announce some actual progress soon, investors are going to start exiting in droves. I'm really disappointed with the team in charge of this company, and with the focus they have imparted upon it.

Absolutely pathetic that a company such as PAX (so new to the sector they still hold the uranium assets of their previous incarnation) can secure a drill and the crew to operate it, whilst GRK engages in farcical 'mini' fracs and empty schedules devoid of contractual obligations. The market capitalisation of GRK is inflated relative to its peers. None of the progress to date even brings the current projects to parity with the potential offered by the rest of the sector, yet the company retains a market cap of over $17M.

And what does the $17M get you? 210C at 5500m (arguably the lowest [worst] thermal gradient currently being pursued for power generation) for the O.D GELs. Actively pursuing a target like that is just madness. The economics are just scrambled at those levels, with the number of wells required for an operational generation module significantly higher than for other HDR projects. On that note, HDR has yet to be established as a viable generation model. The rate of water loss is unknown, and could be inhibitive. If the company has performed a magnetotelluric survey (and there is no reason to expect that they have not completed this inexpensive exercise), they certainly haven't published any results suggesting there could be an in-situ brine reservoir.

With poor economics and exceptionally high risk, it could be safe to assume O.D may be shelved before $15 or so million dollars are ever sunk into an expensive grave.

This is the same management team that pursued Ortahaza to failure, with the only lifeline being operational expenditure insurance from the World Bank. Can we simply assume that the same team have the capacity to selcet projects that are likley candidates for success?

An exposure to GRK only allows exposure to two decent projects, the possibility of desalination at Spencer Gulf, and some conventional reservoir potential in the middle of the isolated Cooper Basin. The Cooper Basin is limited by the geography (unless they establish a huge, shallow and hot reservoir with excellent porosity/permeability), though the Spencer Gulf looks to have potential worth investing in (though not for the $17M price tag).

The company is in active pursuit of further projects (no doubt a hedge for their mistake at O.D), though this is the case for nearly every listed GEO stock.

Cash position is dismal, further miring GRKs situation.

No progress, a focus on poor projects, very limited cash. It is very likely that GRK is relatively overvalued, which means better investments can be made elsewhere in the sector.

I wouldn't recommend putting any money behind this company until they show some initiative with diversification and rig acquisition, as the company rapidly progresses towards becoming the sectors official 'dog' stock.

A shocking job from a management team that inspire zero confidence.