THE BOURSE WHISPERER: Panax Geothermal is closer to the development of up to 25 megawatts of geothermal power for PT Dairi Prima Mineral’s underground lead and zinc mine in northern Sumatra.
The company has received approval of the final mining licences and permits for the PTDPM mine.
The company said the Indonesian Ministry of Forestry had granted the project’s Underground Mining Licence on 15 November.
Location of the PTDPM mine. Source: Panax Geothermal web page
Panax signed a Binding Terms Sheet Agreement in August 2010 with PT Bakrie Power and PTDPM for the supply of up to 25 megawatts of geothermal power required for the operation of the mine.
This Terms Sheet Agreement is currently being finalised into a formal Power Purchase Agreement.
Once the project is up and running, it will supply up to 25 megawatts of geothermal power to the Dairi Prima underground mine at $US150 per megawatt hour for the first eight years and $US125 per megawatt hour thereafter.
Panax and PT Bakrie Power will also be entitled to each receive 50 per cent of all carbon credits generated from the geothermal project.
“Receiving licence approval was the final hurdle before PTDPM was able to proceed with its project development, with first production scheduled to occur by late calendar 2013,” Panax Geothermal managing director Kerry Parker said in the company’s announcement to the Australian Securities Exchange.
“Now that PT Dairi Prima Minerals has received these final approvals, Panax can look at advanced project planning and timeframes to start developing the geothermal project.
“This means that we are one step closer to achieving geothermal production and our first cash flow.”
Once it has achieved that mark Panax claims it will become the first Australian-based geothermal exploration and development company to produce electricity on a commercial basis from geothermal sources.