HIGH PEAK ROYALTIES LIMITED — Capital/Financing Update 2007

Dec 6, 2007

ASX ANNOUNCEMENT, 7 DECEMBER 2007

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Drilling Successful, High Heat Flow Confirmed Close to Power Grid, Torrens Project Area, South Australia

HIGHLIGHTS

• High heat flow discovered during exploration drilling 15 kilometres from power grid north of Port Augusta, Torrens Project Area

• Results confirm the presence of an active heat producing basement and validate the Company’s exploration model in South Australia

• Viable Hot Rock temperatures likely at accessible depth

• The recent re-entry of Edeowie 1 was successful in opening the hole to a depth of 635m, with heat flow measurement lower than original government log result

• Planned additional exploration heat flow drilling continues, with pre-collars underway for seven additional heat flow exploration drill holes in the Torrens Project Area

Torrens Energy has discovered high heat flow just 15km from the National Power Grid, within its Torrens Project Area north of Port Augusta in South Australia. The Company was able to access a hole, Torrens 1, recently drilled by a company with an overlapping mineral exploration licence (Figure 1). Temperature and conductivity measurements confirm a heat flow of 90mW/m[2] , meeting the Company’s stated target for the area.

The thick insulating cover rocks of the Torrens Hinge Zone are likely to “trap” a heat flow of 90mW/m[2] and result in temperatures of over 200[o] C at 5000m depth. This is well within the viable temperatures required for Hot Rock power generation and represents a great success.

Torrens Energy is one of the first companies in Australia to recognise that areas with high Hot Rock potential exist in the heart of infrastructure, which has allowed the establishment of highly prospective exploration projects inside the city limits of Adelaide and around the strategic regional power centre of Port Augusta.

Chief Executive Chris Matthews was delighted with the discovery. “This is a fantastic result in the initial stage of Torrens Energy’s hot rock exploration programme. It has now been confirmed that high heat flow exists in the Torrens Hinge Zone north of Port Augusta, within 15km of the National Power Grid” he said today.

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TORRENS 1 HEAT FLOW RESULT

Temperature measurements were taken from a newly completed mineral exploration hole (Figure 1), with the Company gaining access by contributing to the cost of drilling the hole. The hole was drilled to 780m using a standard minerals drilling rig and temperature measurements were taken in a continuous log to the bottom of the hole.

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The result confirms the validity of Torrens Energy’s innovative exploration methodology, and represents a major advancement in the search for Hot Rocks in the heart of infrastructure.

For the first time the true nature of the South Australian Heat Flow Anomaly will be tested by Torrens’ innovative 3D-TFM methodology, matched by a $3m Australian Government REDI Grant, for a total of $6m (ASX Announcement 27 August 2007).

Figure 1. The locations of the first two heat flow data points. Edeowie 1 was drilled by the SA Government in 1981, while Torrens 1 was drilled this year by a mineral exploration company

EDEOWIE 1 HEAT FLOW RESULT

In addition, Torrens Energy successfully reopened Edeowie 1, a petroleum well drilled originally by the South Australian Government in 1981, to a depth of 983m. The drillhole was originally logged by South Australian Government staff with a continuous downhole temperature log (ASX Announcement 30 April 2007).

Torrens Energy reopened the hole to 635m and repeated the temperature logging to confirm the results from 1981. Newly logged temperatures were found to be lower than those originally recorded, leading the Company to issue a revised heat flow measurement of 77mW/m[2] , 25% less than that which was originally measured by the South Australian Government.

Although below target, the result remains higher than the global average heat flow of 65mW/m[2] , and only 15% below the Company’s stated heat flow target of 90mW/m[2] .

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DRILLING CONTINUES

The Company has now commenced drilling seven additional hot rock exploration drillholes over some 2000km[2] in its wholly-owned Torrens Project Area (Figure 1), and looks forward to assessing the hot rock potential of its highly prospective and centrally-located Geothermal Exploration Licence (GEL) portfolio.

Work is being carried out by two drilling rigs, one drilling “pre-collars” through unconsolidated ground, while the other core “tails” to enable accurate heat flow measurements to be made at depths ranging around 500-600m.

Chris Matthews is looking optimistically to the remainder of the drilling programme and said: “Further heat flow results are expected in the first quarter of 2008 as Torrens Energy seeks to define a hot rock province in close proximity to South Australia’s existing power infrastructure” he said.

For further information please contact Chris Matthews Chief Executive Officer Torrens Energy Ltd Level 1, 25 Unley Road, Parkside, South Australia 5063 P 61 8 8373 1822 E chris.matthews@torrensenergy.com

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