You say, "There are a lot of hot rocks out there and the cost of accessing them is relatively low.".A better choice of words may have been "..down there.." rather than "..out there.." and, in fact, the cost of accessing these hot rocks is not relatively low at all. GDY has developed a considerable body of in house expertise as they have learned how to access them and for the present ar least, they are well in front of the competition as far as the technology is concerned.
In addition, the actual temperature of the hot rocks is critically important to the efficiency of the process. The Cooper Basin has the hottest rocks and this more than compensates for their remote location.
Right now the shareprice is declining for a number of good reasons.
Firstly, there is somewhat of an overhang following the recent share issue and this overhang has been exacerbated by the trading disincentives associated with the option issue.
Secondly, the company is at a critical point in its risk profile. The success or otherwise of the whole project hangs on the efficiency of the underground heat exchangers. These heat exchangers are being tested right now and they need to be relatively efficient for the power generating process to be economic. for this reason, there is a high risk margin in the current share price.
RNE Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
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