Earth Heat Resources (ASX: EHR)
Earth Heat Resources is a listed geothermal company in the business of exploration and development of geothermal resources.
In 2010 a company called Fall River Resources (FRV) began a transition into a new energy company focussed on geothermal energy – Earth Heat Resources (EHR).
South Australia – EHR has a consolidated Geothermal Exploration Licence (GEL) over part of the South Australian Heat Flow Anomaly. There is potential for both Hot Fractured Rock projects and Hot Sedimentary Aquifer Projects in this area. However, both technologies remain in their infancy and geothermal companies are currently having difficulty funding the development of such resources.
Djibouti – EHR has a joint venture in this coastal African nation with a Ministry of the Government and the Local Electricity Company. The Fiale Project is a volcanic geothermal project and therefore faces less technology and, arguably, exploration risk than unconventional geothermal projects. Further, EHR has signed an MOU with construction company Drake and Scull to jointly develop projects in Africa and the Middle East. This suggests that they are forging the required relationships to develop the Fiale Project.
Argentina – Perhaps the most exciting project undertaken by EHR is the Copahue project in Argentina. This too is a volcanic area and the earth heat has, in fact, already been harnessed to warm therapeutic baths. Geothermal analysis according to the Canadian Geothermal Code suggests that the concession area contains enough heat to generate at least 19MWe. EHR aims to develop a 30MWe plant, if possible. Power purchase agreements are in place, and the company is in the advanced stages of securing funding.
In December 2011 the company raised $600,000 in a placement to institutional and sophisticated investors at a price of 3c per share. One option for 6c (exercisable until December 2012) was attached to every two shares. Cash at 31 December 2011 was about $320,000 and further investments from Investment Firm Socius are available if required.