Australia and New Zealand Banking Group Ltd. — Major Shareholding Notification 2008

May 14, 2008

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15 May 2008

ASX ANNOUNCEMENT

DIRECTORS’ AND EMPLOYEE HOLDINGS AND OPES PRIME

Panax Geothermal Ltd (“Panax”) are pleased to confirm that no Directors or employees of the Company have margin lending facilities with Opes Prime (Opes) or other lending institutions secured by Panax Geothermal Limited (Panax) shares.

As confirmed by ANZ’s release of Form 603 Notice of initial substantial holder 12 May 2008 – none of the shareholdings in Panax were acquired by ANZ pursuant to Opes Prime Australian Master Securities Lending Agreements (AMSLA’s) with Opes Prime Stockbroking Limited and Leveraged Capital Pty Ltd.

ANZ’s notice is only a “substantial share holding notice” in which ANZ declares to control 5.04% of Panax Geothermal Ltd. This means that there is no ‘overhang’ of Panax shares subject to disposal because of ‘master lending agreements’.

Panax shares trade under the ASX code of “PAX”.

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Bertus de Graaf Managing Director

For further information:

Dr Bertus de Graaf Managing Director Chief Executive Officer bdegraaf@panaxgeothermal.com.au 61 7 3512 7000

Mr Kerry Parker Executive Director Chief Financial Officer kparker@panaxgeothermal.com.au 61 7 3512 7000

Panax Geothermal Ltd ABN 89 122 203 196

Level 5, 11 Finchley Street PO Box 2142 Milton QLD 4064

Ph: 07 3512 7000 Fx: 07 3512 7099 www.panaxgeothermal.com.au

ABOUT PANAX GEOTHERMAL LTD

The long term vision of Panax is to become a major participant in the geothermal industry, both nationally and internationally. The scope of our geothermal interests will be broad, including both conventional geothermal resources (volcanic related) as well as enhanced geothermal systems (EGS) such as hot fractured rock (HFR) geothermal systems. Panax’s key asset is the advanced and ready to drill-test Limestone Coast Geothermal Project in South Australia, which has an estimated generating potential of approximately 1,500 MWe, (i.e. the equivalent of two coal fired power stations or enough power for more than one million homes).

The nature of our business is the identification and exploration of prospective geothermal resources and to convert these into geothermal reserves for the production of commercial geothermal energy. Geothermal power generation is not dependent on new technology (i.e. no new technology risk). The risks of our endeavours are directly related to the conversion of geothermal resources to economic geothermal reserves, i.e. the economic extraction and utilisation of geothermal energy. In that sense it is very similar to risks associated with mineral or oil/gas exploration.

The Company will not only focus on clean power generation but will also embrace direct use of geothermal heat for use in e.g. industry, district heating (or cooling), and desalination.

The rationale for focusing on geothermal energy is directly linked to the threat of global warming as caused by CO[2] emissions from the continued use of fossil fuels. National and international momentum is building for a ‘climate change pact’ and this foreshadows that clean energy generation is the key to our future.

Geothermal energy is one of the very few sustainable sources of energy which can replace base load power from fossil fuelled power stations. Compared to other sustainable energy options, geothermal resources are still not valued according to their commercial potential for the long term generation of clean base-load power. This is the opportunity which Panax aims to turn to good account.

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