PTR MINERALS LTD — Interim / Quarterly Report 2005

Oct 28, 2004

PETRATHERM LTD

A.C.N. 106 806 884 247 Greenhill Road, Dulwich 5065 ph (08) 8366 6055 fax (08) 8366 6056

REPORT FOR THE QUARTER ENDING 30 SEPTEMBER 2004

Email: admin@petratherm.com.au Website: www.petratherm.com.au

HIGHLIGHTS

1. CORPORATE

• The Company successfully listed on the ASX on 27 July raising $4,000,000.
• The Company held $3,330,000 cash reserves at 30 September 2004. ٠
• Application for a R&D Start Grant of $3,067,000 was lodged.

2. EXPLORATION

• Two new geothermal exploration licences were granted to the ٠ Company.
• A senior geologist, Dr Betina Bendall, was recruited.
• Field work commenced on Paralana and Callabonna tenements designed to aid drill site selection.
• Drilling of the first shallow (600-800 metres) geothermal test well $\bullet$ will occur in the next quarter.

REVIEW OF OPERATIONS

CORPORATE

On 27 July, the Company successfully raised $4 million and listed on the ASX. These funds will be used to develop the Company's hot rock, geothermal targets with the Company moving towards drilling its first shallow exploratory well during the next Ouarter.

Following discussions with the Australian Government's AusIndustry Office, a formal application for an R&D Start grant of $3 million was filed. The reduction in the application amount to that originally specified in the prospectus reflects the initial, firm expenditure commitment to Stages 1 to 3 of the project evaluation program.

It is the intention that further R&D funds will be sought under a separate application for the later stages of the project once the project has matured to a higher level of detail and specification than is currently available. The result of this application is expected in the next quarter.

Cash

The Company held $3,330,000 in cash at the end of the Quarter.

EXPLORATION

Geothermal Licences

The Company was awarded two new geothermal licences GEL 178 and GEL 180. They adjoin the Paralana (GEL 156) tenement (Figure 1) and cover a region identified by historical seismic data of significantly increased sedimentary cover, up to 3 kilometres thick, informally termed the Poontana Basin. It is postulated the same high-heat producing granites at Mt Painter, 20 kilometres to the west, may underlie this basin. The combination of a potential heat source and insulator to retain the heat make this area an attractive target for hot rock exploration.

A further licence still pending award (GELA 179) is adjacent to the Callabonna licence.

Field Operations

Detailed gravity surveys aimed at delineating the preferred site for shallow test wells was completed on the Paralana (GEL 156) and Callabonna (GEL157) tenements. Interpretation of this data has been used to model the extent and nature of potential hot rock resources at each of the project areas. Re-processing and interpretation of historical seismic data has also been incorporated in this study to aid modelling of the cover (insulator) sequence.

As a result of the work now in progress, one of these areas will be drill tested during the next Quarter.

Staff

The company has recruited senior geologist, Dr Betina Bendall. Dr Bendall is an expert in petrology and geochemistry which has applications in modelling heat production and fluid flow. She has extensive field experience and project management expertise.

Figure 1 New Geothermal Licence Areas (GEL's 178 and 180) and extent of favourable Poontana Basin.

Rule 5.3

Appendix 5B

Mining Exploration Entity Quarterly Report Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98.

Name of Entity

PETRATHERM LTD

ACN or ARBN

106 806 884

Quarter Ended ("Current Quarter")30TH SEPTEMBER 2004

Consolidated Statement of Cash Flows

			Current Quarter	Year to Date (3)
	Cash Flows Related to Operating Activities			months)
			$A'000	$A'000
1.1	Receipts from product sales and related debtors
1.2	Payments for	(a) exploration and evaluation	(5)	(5)
	(b) development
	(c) production
	(d) administration		(120)	(120)
1.3	Dividends received
1.4	Interest and other items of a similar nature received		40	40
1.51.6	Interest and other costs of finance paid
1.7	Income taxes paidOther (Joint Venture Repayments)
	Net Operating Cash Flows		(85)	(85)
	Cash Flows Related to Investing Activities
1.8	Payment for purchases of:	(a)prospects
		(b) equity investments
		(c) other fixed assets	(9)	(9)
1.9	Proceeds from sale of:	(a)prospects
		(b) equity investments
		(c)other fixed assets
1.10	Loans to other entities
1.111.12	Loans from other entities (net)		(102)	(102)
	Other (provide details if material)
	Net Investing Cash Flows		(111)	(111)
1.13	Total operating and investing cash flows (carriedforward)		(196)	(196)

1.13	Total operating and investing cash flows (broughtforward)	(196)	(196)
	Cash Flows Related to Financing Activities
1.14	Proceeds from issues of shares, options, etc.	4,000	4,000
1.15	Proceeds from sale of forfeited shares
1.16	Proceeds from borrowings
1.17	Repayment of borrowings
1.18	Dividends paid
1.19	Other (Share issue expenses)	(474)	(474)
	Net Financing Cash Flows	3,526	3,526
	Net Increase (Decrease) in Cash Held	3,330	3,330
1.20	Cash at beginning of quarter/year to date	0	0
1.21	Exchange rate adjustments to 1.20
1.22	Cash at End of Quarter	3.330	3.330

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

		Current Quarter$A'000
1.23	Aggregate amount of payments to the parties included in item 1.2	18
1.24	Aggregate amount of loans to the parties included in item 1.10	-

$1.25$ Explanation necessary for an understanding of the transactions Represents payments of salaries and directors fees and superannuation

Non-Cash Financing and Investing Activities

• $2.1$ Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows $\overline{\text{Nil}}$
• $2.2^{\circ}$ Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

$\overline{\text{Nil}}$

Financing Facilities AvailableAdd notes as necessary for an understanding of the position.

		Amount Available$A'000	Amount Used$A'000
3.1	Loan facilities	-
3.2	Credit standby arrangements		-

Estimated Cash Outflows for Next Quarter

		$A'000
4.1	Exploration and evaluation	328
4.2	Development
	Total	328

Reconciliation of Cash

Reconciliation of cash at the end of the quarter (as shown inthe consolidated statement of cash flows) to the relateditems in the accounts is as follows.		Current Quarter$A'000	Previous Quarter$A'000
5.1	Cash on hand and at bank	3,335	3,335
5.2	Deposits at call
5.3	Bank overdraft	(5)	(5)
5.4	Other (provide details)
	Total: Cash at End of Quarter (item 1.22)	3,330	3,330

Changes in Interests in Mining Tenements

		TenementReference	Nature ofInterest(see note2)	Interest atBeginning ofQuarter	Interest atEnd ofQuarter
6.1	Interests in mining tenementsrelinquished, reduced or lapsed
6.2	Interests in mining tenementsacquired or increased	GEL 156GEL 157GEL 158GEL 178GEL 180	AcquiredAcquiredAcquiredAcquiredAcquired	$0%$$0%$$0%$$0%$$0%$	$100%$100%100%100%100%

Issued and Quoted Securities at End of Current Quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates.

		Total Number	Number Quoted	Issue Price perSecurity (seenote $3)$ (cents)	Amount paid-up perSecurity (seenote $3)$ (cents)
7.1	Preference +securities(description)
7.2	Changes during quarter(a) Increases throughissues(b) Decreases throughreturns of capital, buy-backs, redemptions
7.3	+ Ordinary Securities	35,000,001	20,000,000
7.4	Changes during quarter(a) Increases throughissues(b) Decreases throughreturns of capital, buy-backs, redemptions	35,000,001	20,000,000
7.5	$^+$ Convertible DebtSecurities (description)
7.6	Changes during quarter(a) Increases throughissues(b) Decreases throughsecurities matured,converted
7.7	Options (description andconversion factor)	7,500,0002,600,0002,000,000650,00040,000		Exercise Price20 cents20 cents20 cents20 cents32 cents	Expiry Date24/03/0904/04/0926/07/0927/07/0923/09/09
7.8	Issued during quarter	7,500,0002,600,0002,000,000650,00040,000		Exercise Price20 cents20 cents20 cents20 cents32 cents	Expiry Date24/03/0904/04/0926/07/0927/07/0923/09/09
7.9	Exercised during quarter
7.10	Expired during quarter
7.11	Debentures(totals only)
7.12	Unsecured Notes (totalsonly)

Compliance Statement

$\mathbf{1}$ This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Law or other standards acceptable to ASX (see note 4).

$\overline{2}$ This statement does / does not* (delete one) give a true and fair view of the matters disclosed.

Sign here: Date: ............................. ....................................... (Secretary)

Print name: DONALD STEPHENS

Notes

$\mathbf{1}$ The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

$\overline{2}$ The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items $6.1$ and $6.2$ .

3 Issued and quoted securities The issue price and amount paid up is not required in item 7.1 and 7.3 for fully paid securities.

$\overline{4}$ The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

1. Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

$- - - - - -$