HIGH PEAK ROYALTIES LIMITED — Capital/Financing Update 2007

Dec 10, 2007

ASX ANNOUNCEMENT, 11 DECEMBER 2007

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Acquisition of Geothermal Exploration Licence 293 Port Adelaide, South Australia

HIGHLIGHTS

• Additional Geothermal Exploration Licence (GEL 293) offered at Port Adelaide, immediately north of Adelaide, bringing the Company’s total land holding to 17 licence areas for approximately 7,800 km[2] .

• Highly prospective geology known for high heat flow and coincident insulating sedimentary cover – modelled nearby heat flow measurements show 200°C+ achievable, indicating viable temperatures for hot rock power generation likely.

• Port Adelaide is central to SA’s electricity supply infrastructure and industry. GEL 293 lies within this infrastructure hub, providing a significant commercial advantage over companies exploring in areas that are unsupported by existing power networks.

• GEL 293 encompasses the Pelican Point area which is a prime site for a desalination plant, to help meet Adelaide's critical water needs. Studies show that relatively low geothermal temperatures can be used to desalinate seawater.

ADELAIDE PLAINS PROJECT AREA

GEL 293 adjoins the Adelaide Plains Project Area, immediately north of Adelaide, South Australia.

The Area lies within the Torrens Hinge Zone, between the Adelaide Hills and the Gulf of St Vincent. GEL 293 incorporates a corridor of insulating sedimentary rocks overlying the targeted heat producing basement.

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----- Start of picture text ----- Temperature ( [o] C)0 50 100 150 2000500100015002000250030003500400045005000Depth (m)----- End of picture text -----

Last year the Company commissioned independent heat-flow modelling, utilising temperature measurements taken from existing bore holes in the vicinity of the Project Area (below). This modelling indicates that the local heat flow conditions are 30% above the global average, and temperatures are modelled to be above 200°C at 5,000 metres depth (TEY Prospectus, March, 2007).

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Torrens’ Chief Executive Chris Matthews believes that the Adelaide Plains Region has great potential for Hot Rock Geothermal Energy. “The area is known for high heat flow, is likely to have the right insulating cover, and has several great advantages including being coastal and located in a relatively underdeveloped area close to a major city”, he said.

GEL 293 – PORT ADELAIDE

The acquisition of GEL 293 at Port Adelaide extends the Adelaide Project into the heart of SA’s power industry and infrastructure, incorporating four power stations with a combined capacity of 1,960MWe. This represents 56% of the State’s supply of electricity and associated distribution networks.

The successful exploration of the GEL will establish the potential for geothermal “hotrock” for power generation, which could be incorporated directly into the existing power infrastructure and networks.

This could fast-track development time and bypass the large capital requirements faced by other companies operating far from existing networks.

DESALINATION POTENTIAL

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----- Start of picture text ----- AdelaideProject MallalaAreaRoadsTwo WellsVirginiaGulf of StVincentHeat Flow PointsNEW GELAPPLICATION 293 Port AdelaideADELAIDE CBD----- End of picture text -----

GEL 293 incorporates Pelican Point, a prime site for the development of a large scale desalination plant. SA is widely reported in the press as being at crisis point, with water supplies potentially falling short of demand.

The Western Australian Government recently installed a “reverse osmosis” desalination facility south of Perth, which is the country’s first large-scale seawater desalination plant. The facility is currently providing 17 per cent of Perth’s water needs (below).

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Western Australia is currently evaluating sources of renewable energy for a proposed Stage 2 expansion, with geothermal as the only choice that is both constant and able to sustain large scale development (CSIRO Report, 2006)

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GEOTHERMAL SEAWATER DESALINATION

Studies completed overseas have shown that relatively moderate geothermal temperatures can be utilised to effectively desalinate seawater; The Milos research project in Greece utilised geothermal temperatures between 75 and 100[o] C to successfully desalinate seawater using multi-effect distillation (MED). Torrens Energy is also aware of other research projects in Australia that aim to develop direct geothermal-desalination (ASX Announcement, 25 June 2007).

Chris Matthews is excited by the prospect of investigating the possibilities for geothermal desalination. “The use of geothermal energy for direct desalination has the potential to improve water security without placing an additional burden on the state’s power supplies, while at the same time reducing our reliance on Murray River water”, he said.

South Australia has rapidly growing demands for both water and power, and the Company believes that coupling new, renewable and reliable sources of power with the desalination process is essential to meeting the requirements of a sustainable future.

HYBRID GEOTHERMAL PRE-HEATING

Technical studies completed by groups overseas show that geothermal resources have the potential to be retro-fitted directly to existing fossil-fuel powered power production. This process has been termed “hybrid geothermal pre-heating”, and involves elevating the water temperatures prior to being injected into the steam cycle.

Studies reviewed by the Company point out significant increases in efficiency, capacity and operational cost reductions. Furthermore, there is a value in greenhouse gas emissions reduction which, when factored in, can have substantial commercial benefit to the power supplier.

SUMMARY

Torrens Energy Limited (Torrens) continues its bold geothermal exploration strategy with the acquisition of GEL 293, at Port Adelaide, securing the hub of power production and infrastructure in SA. The geothermal prospectivity of the area also coincides with the State Governments plans for the development of a large scale desalination plant, bringing forward the possibility of direct geothermal desalination.

Temperature modelling completed on the nearby Adelaide Plains has established the excellent geothermal prospectivity of area, and modelled heat reservoir temperatures are well within the range required for viable “stand alone” power generation.

Torrens Energy believes that the acquisition of GEL 293 is important, not only in acquiring highly prospective hot-rock geothermal ground, but also bringing forward direct commercial opportunities for augmenting existing power and water infrastructure in South Australia.

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Further work will be required before Torrens Energy can confirm the commercial application of hybrid geothermal pre-heating at Port Adelaide and desalination of seawater from the Gulf St Vincent. The Company will be directing its efforts to investigating these opportunities in the near future. Torrens Energy looks forward to exploring for a renewable and clean energy source on Adelaide’s doorstep.

For further information please contact

Chris Matthews Chief Executive Officer Torrens Energy Limited Level 1, 25 Unley Rd Parkside, South Australia 5063 Ph: 08 8373 1822 Fax: 08 8373 1733

E chris.matthews@torrensenergy.com

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