(It is presumed that you have already read the ASX announcements...

(It is presumed that you have already read the ASX announcements and viewed the presentation.)

The AGM was a good meeting with key people very friendly and willing to discuss. Attendance was very small. On the other hand the pity was that the three key technical company people could not be present (John Bishop, Roger Lewis, Fiona Holgate). It would have been good to discuss the interpretation of the detailed data that the company has collected in the past year and collated into rather dramatic maps. Some of this you will already have seen in previous ASX announcements but the best yet is in the 3-D images portrayed in the AGMs presentation. (The extended conductive anomaly in slide 7 and the granite topography in slide 8 in particular.) With that kind information the project is considerably derisked and you can make really meaningful decisions with respect to interpretation and well locations. None of the other geothermal companies have had this high standard of visual display of data. I can imagine them saying, "Kuth has it just too easy!" A few other geothermals have had access to existing data from oil wells of course. Kuth commenced with green fields and has superbly well on minimal budgets.

They seem to be keen on the 6 dia slimline drill holes because of the lower cost. However this is exactly what the larger geotherms have tried and are now avoiding. Kuth emphasises the importance of the initial well in the Lemont area providing the data on the exact nature of the Natural Fracture Zone. This is true as, if this zone has the appropriate spacings and flow rates it would be just above the hot granites and could be the ideal heat exchanger for array development with minimal effort.

There was some talk of using a new drilling rig with special bits that penetrate faster than for any normal mineral drilling. This later turned out to be from Globe in WA. After all the experimental work done by other geotherms I cant help but be a little sceptical of any magic bits.

David McD is very positive on funding sources from development banks for the Vanuatu project. He appears to have made rather excellent and sustained connections with key persons. (That is in fact his area of expertise.) Despite the GFC, the development banks are actually (desperately) looking for projects to fund. It seems there are fewer innovators now that ask for support. While there is no shortage of sharks around the South Sea islands here is a credible ASX listed company doing excellent work (in Vanuatu). Hence Kuth has received very good receptions.

The thinking is to buy a 4 MW off the shelf power unit (possibly from Turboden in Italy). This is an appropriate size for the network since it matches the present base load and existing diesel generators could take up excess peak load as necessary. One would expect a significant pickup in demand in the first few years as the energy becomes cheaper and local industry evolves to use more light and power tools, etc, and in increased tourism. At that point a second 4 MW plant could be introduced.

Kuth is a very lean and focussed group and as such it does not have an office per se, they use a serviced office. David McD lives in Sydney but the business takes him away most of the time.

As usual, the detailed information comes out after the meeting. Not many at the meeting seemed to know anything about geothermal energy.

Juke