Geodynamics to acquire 70% in Solomon Islands geothermal project

Nov 21, 2012 - Australian geothermal energy firm Geodynamics Ltd (ASX:GDY) today said it had agreed to acquire a 70% stake in a geothermal power project in Solomon Islands from gold miner Kentor Gold Ltd (ASX:KGL).

Under the agreement, Geodynamics can take an initial 25% in the Salvo Island geothermal power project upon completing initial studies to determine target locations for a drilling programme. The company will invest AUD 350,000 (USD 362,800/EUR 283,800) to conduct the studies, including geothermal mapping and geophysical analysis, with completion seen before September 2013. Then Geodynamics will spend AUD 4.65 million on exploration drilling and feasibility study for the development of a power plant. Upon completion of the study, it will acquire 45% more in the project.

Geodynamics expects the maiden inferred resource statement and scoping study for the project to be ready by June 2013.

At present, Solomon Islands' capital Honiara needs up to 14 MW of power capacity to meet its power demand. The planned geothermal power plant could also supply power to the Gold Ridge gold mine, which was recently acquired by Australian gold miner St. Barbara (ASX:SBM), Geodynamics added.

(AUD 1 = USD 1.037/EUR 0.811)

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