HIGH PEAK ROYALTIES LIMITED — Capital/Financing Update 2011

Sep 26, 2011

ASX ANNOUNCEMENT 27 September, 2011

==> picture [168 x 38] intentionally omitted <==

---

Letter to Shareholders

---

HIGHLIGHTS

• Rights Issue completed for $900,000, working capital bolstered to $3.7m

• Geothermal requirements deferred, new geothermal subsidiary company created

• Future government funding initiatives look promising, carbon policy still uncertain

• Consideration given to non-geothermal opportunities in the broader energy sector

Dear Shareholder

Last week Torrens Energy successfully completed its Rights Issue which has netted approximately $900,000 for the Company. It was very gratifying to see such strong internal support through the Issue in which we saw more than 60% acceptance from shareholders, and a substantial shortfall allocation to board members of Torrens Energy who subunderwrote approximately 40% if the Issue.

Cash reserves have been brought up to approximately $3.7m giving the Company a strong financial base in what can be described equally as times of uncertainty and opportunity. The proportionally large uptake on the rights issue represents a strong show of hands for our Company, and signals to the board of Torrens Energy that our shareholders are prepared to continue to support our direction.

It’s been a salutary year, not only for Torrens Energy, but for the Australian geothermal industry in general. The lack of investor confidence that emerged last year has played out as expected, through this year. It remains true that after nearly a decade of investment, technological innovation and enduring persistence, we still do not have demonstrable proofof-concept project in Australia – a fact that is not lost on the investors.

Consequently Torrens Energy announced in April 2011 that it would wind down geothermal operations to preserve precious working capital, and give consideration to non-geothermal opportunities in the broader resource sector. To that end Torrens Energy has successfully negotiated the renewal, consolidation and deferral of geothermal expenditure requirements including deep drilling, assuring that the Company’s licences continue in good standing.

As part of this renewal process the Company’s geothermal land holdings will be transferred into the newly established subsidiary, Torrens Energy South Australia Pty Ltd (TESA), allowing the Company more latitude to focus its efforts elsewhere whilst at the same time preserving its interests in the outstanding geothermal prospects it has built up over the last 6 years.

Investor confidence in geothermal may however, be partly restored through a surge of new interest and funding initiatives from Canberra - the Governments new Australian Renewable Energy Agency (ARENA) has set aside over $200m or 45% of its renewables funding, for geothermal support. In addition there has been a loosening of the funding rules with Government softening its position on the unsuccessful 50:50 “matched funding model”, to a consideration of what the market will bear.

TORRENS ENERGY LIMITED ABN 79 118 065 704 RENEWABLE SUSTAINABLE GEOTHERMAL ENERGY A: 338 Hay Street Subiaco WA 6008 PO Box 1505 Subiaco WA 6904 T: +61 8 6380 1003 F: +61 8 6380 1026 W: www.torrensenergy.com

Torrens Energy will continue to monitor these programs closely, but must also be realistic about lead times of delivery under these funded schemes; with uncertainty still surrounding the Governments proposed carbon scheme, we must continue to give consideration to nongeothermal opportunities in the broader energy sector.

It is a tribute to Australian perspicacity in the resource sector that there is no shortage of promising new energy projects around the globe seeking funding and a corporate home. Indeed Torrens Energy has reviewed many such projects in 2011, however the search continues for a project of sufficient quality to chart a new direction for the Company.

Torrens Energy has remained a solid investment proposition by reducing its costs, reducing its commitments and bolstering its cash reserves. The Company’s primary geothermal assets are being recast into a more nimble corporate form, and a fully committed cost reduction effort consolidating all operations to our modest Perth premises has been completed.

These are challenging times for investors and management alike, in determining the best possible future path. Change however is inevitable, and your board of directors remains committed, compact and well equipped to see the Company through its transition to diversification.

Torrens Energy thanks you for your continued support.

For more information please contact:

==> picture [113 x 57] intentionally omitted <==

John Canaris Managing Director Torrens Energy Limited

==> picture [138 x 67] intentionally omitted <==

Dr Dennis Gee Chairman Torrens Energy Limited

TORRENS ENERGY LIMITED ABN 79 118 065 704 RENEWABLE SUSTAINABLE GEOTHERMAL ENERGY A: 338 Hay Street Subiaco WA 6008 PO Box 1505 Subiaco WA 6904 T: +61 8 6380 1003 F: +61 8 6380 1026 W: www.torrensenergy.com