Nightspore, there is often no point to placing such a large bid...

Nightspore, there is often no point to placing such a large bid at such a low price. It props the buy depth but it's completely transparent. There is one minor reason to place such bids - an accidental or mistyped sell order can decimate the buy depth all the way down to 0.01, or any other arbitrary low figure. I sometimes play with this type of bid (though that one is not mine) because I have has such orders hit on two occasions, and made a profit of several thousand percent in a very small time frame.

Asteroider, I am not aware of any money flow indicator that takes buying depth into account. Which are you referring to?

Jukes, couldn't agree more regarding your comments on GEL220 and GEL221. This is virtually a free-carry on any of GDY's progress.

You also said:

"The difficult issues to resolve are the dollar value of Osiris, and the likelyhood of fund raising the desired $25-30M. You need runs to get funds but you need funds to get runs. Temporarily awkward."

When trying to value Osiris, perhaps it is relevant to also consider the cost of generating all that data. Twenty wells worth of 2D and 3D seismic, core and temperature data would cost somewhere in the region of $100M. Their Penola Trough database is the most comprehensive and well compiled in Australia. Not bad for a company that was planning on listing for $20M before PAX swooped.

Several years have been spent compiling and analysing the data for GEL223. That in itself has a time value that should be factored into any calculations.

Further value is derived from the loss of a competitor for one of the CR or GDF grants, which are specifically aimed at distinct models. With an almost identical production model between companies, there is a value to the knowledge that PAX have the only advanced geothermal project of this model, and are highly likely (extremely likely in my opinion) to get the grant, totalling at least $7M.

The increased surety of delivering the first commercial load of geothermal power into the NEM has value in itself, for reasons that Jukes already explained:

"Getting geothermal electrical energy to market quickly is becoming a key factor in being taken seriously. Any achievements in the LC region will establish international credibility for JVs in overseas projects."

What value would you put on publicity like that?

Peter Pumpkinhead, one outcome that you'll appreciate is that with the new, extensive data base, they will be much more likely to drill the first well as a full production well. My logic for this is that the main stated reason for drilling SAL1 as an appraisal well was that they could not afford investing the additional capital into a well that could potentially fail. With the new seismic, MT, permeability and temperature data, there is no requirement for the more conservative appraisal well, and the increased funds allow for production diameter drilling.

Now, as for the rest of the capital to be raised, the announcement states that the $25 to $30M placement is being facilitated by Dundee Securities Corporation. Please note in the Equity Raising section of the announcement that

"Panax was introduced by Dundee to 18 institutional investors in Toronto and New York."

I doubt this statement was made idly.

Further funds will be raised by the SPP to existing shareholders, though we have no indication of the terms. Looking at their financial modelling, it would seem they are aiming for a $5000 limit per account. Three cheers for multiple HINs, eh?

Now, why do PAX need all those funds right now for LC? Obviously, they don't. The funds allow them to advance the international projects, such as the extreme-gradient Puga, Kyrgyz and Indian projects during the interim of LC development. The World Bank props up Kyrgyzstan, and India offers large tariffs (varying across regions). By raising capital now, the projects can be pursued in tandem. With the founding directors of Osiris on retainer, there is now a base of expertise that will facilitate an extra-LC focus.

This one acquisition not only buries the geological risk, but it also further diminishes the key man risk.


Looks simply excellent now.

Cheers

tawny