PTR MINERALS LTD — Interim / Quarterly Report 2006

Apr 27, 2006

Petratherm Ltd

105 Tusmore Ave, Tusmore 5065, South Australia Tel: +61 8 8304 8200 Fax: +61 8 8304 8201 Website www.petratherm.com.au Email admin@petratherm.com.au A.C.N. 106 806 884

Report for the Quarter Ending 31 March 2006

SUMMARY

CORPORATE

• An independent economic and engineering feasibility study for the Paralana $\bullet$ Geothermal Site is scheduled for completion by July 2006.
• A Managing Director to be appointed to guide progress towards "green" energy.
• $1.97 Million raised in February.
• Geothermal exploration joint venture opportunities discussed with third parties.

OPERATIONS

• Extension of Paralana-1B to at least 1500 metres depth is to begin in early May 2006.
• Production well design and rig procurement at Paralana is underway.
• A review of geothermal opportunities elsewhere in Australia and overseas commenced.

CORPORATE ACTIVITIES

Following the success of the initial geothermal test well drilled in September 2005 at Paralana, Ultra-Systems Technology has been employed to undertake a pre-feasibility study. The study will look at grid connection, plant design, power size development, and engineering aspects of the underground heat exchanger (i.e. the fluid circulation cell) in order to develop a comprehensive economic assessment.

The Company will employ a managing director with strong experience and understanding of the electricity market. It is anticipated this position will be filled shortly. In the meantime, the Company has continued advanced discussions with a number of third parties regarding potential joint venture opportunities for Paralana.

In February the Company successfully placed 5.25 million ordinary shares at 28 cents per share, raising $1,470,000 through Taylor Collison Ltd and Lands Kirwan Tong Stockbrokers Pty Ltd. In addition Minotaur Exploration Ltd exercised $500,000 of its options in Petratherm. The Company is now in a strong cash position with $3,122,000 in the bank as of $31st$ March 2006.

OPERATIONS

Paralana Project (GEL's 156, 178, 180)

Drill Campaign

Preparations to extend the Paralana geothermal well (Paralana-1B) to a minium depth of 1500 metres have been finalised with the contracted drill rig now scheduled to begin drilling in early May 2006.

Drilling data will establish thermal gradients and rock properties at intermediate depths, in order to confirm the model of temperatures in excess of 200°C at depths of 3.5 kilometres; a benchmark identified by the Company for economically viable electricity generation under current market conditions.

Heated waters in excess of $100^{\circ}$ C may be intersected in the next phase of drilling. requiring the well design and safety aspects of the drill program to be carefully assessed. On completion, the well will be cased and suspended as a potential seismic observation well during fracture stimulation of the deep heat reservoir, should such occur.

Figure 1 Callabonna and Paralana Project Areas.

The next stage of the Paralana Project would involve the drilling of two deep wells to establish the modelled thermal resource and provide input to a feasibility study for the production of base-load electricity generation. It is anticipated that a decision to proceed to this stage will be taken in the second half of 2006.

Phase-1 of the Paralana drill program recorded a geothermal gradient in the order of $81.5^{\circ}$ C per kilometre, which is believed to be amongst the highest reported shallow temperature gradients recorded in Australia. The site is also well located 130 kilometres from the main grid infrastructure, and only 11 kilometres to the existing Beverley Uranium Mine.

Paralana Geothermal Production Well - Progress Update

The Company has begun well engineering studies to drill its first production well at Paralana. Several large rigs in the region are capable of drilling the planned well of approximately 3.5 kilometres depth and negotiations are underway to secure one of these rigs.

Historical seismic and drill data along with rock stress analysis captured from the first phase of drilling indicate the well should not present any unusual technical challenges. The chances of an over pressured sequence and/or the presence of hydrocarbons is deemed extremely un-likely and assessment of likely formation stability is excellent. For this reason drilling costs should be at a minium, directly comparable to standard oil well costs of around $3,000,000 to $4,000,000 for a well of 3.5 kilometres depth.

Paralana Power Plant Development - Update

As part of the Paralana economic feasibility study the Company has been investigating the optimum development path. Paralana is favourably located just 11 kilometres from the Beverley Uranium Mine, 40 kilometres from the off-grid Arkaroola Tourist Village and 80 kilometres from 33 KV grid connection at Nepabunna. Studies to see how to best service these local markets are being undertaken.

Figure 2 A possible power development plan for Paralana and transmission grid nodes.

The Paralana resource is potentially very large. Simple energy calculations based on thermal models indicate the resource could support up to 13,000 MWe of power output over a twenty year period if fully utilized. The Olympic Dam expansion is scheduled to require over 400 MWe of power. To supply this demand a high voltage line to Olympic Dam from Paralana via the Leigh Creek power node could be constructed (see fig 2).

Callabonna Project (GEL's 157,179)

A highly encouraging temperature gradient of $68^{\circ}$ C per kilometre was returned from the Phase-1 geothermal drill program at Callabonna in September 2005. This result also falls within the Company's target expectations to produce economically viable base-load electricity. A Magneto-telluric test survey across the potential resource is planned midyear. The survey will accurately map the top of the granite heat engine below the subsurface insulator as an aid for later potential drill testing.

Queensland

Petratherm has placed a tender to undertake a review of the electricity demand and network infrastructure for Queensland. This report will also investigate the economics behind small scale, off-grid conventional geothermal opportunities.

Victoria

The State of Victoria has been divided up into 10,000km2 blocks, with licence tenders opening on the $14th$ April. Tenders close 11 October 2006 and prospectivity assessment is currently underway.

Europe

Petratherm was invited to participate in talks with BRGM in France. The meetings included a visit to the Soutlz Hot Rock test site. Talks were also held with representatives from the Swiss Deep Heat mining project in Basel, Switzerland.

For further information contact: Peter Reid, CEO Email: admin@petratherm.com.au Website: www.petratherm.com.au

APPENDIX 5B Mining exploration entity quarterly report

		PETRATHERM LTD
				Quarter ended
	ABN 17 106 806 884			31 March 2006
	Consolidated statement of cash flows
				Current quarter	Year to date
	Cash flows related to operating activities				(9 months)
				$A'000	$A'000
	1.1 Receipts from product sales and related debtors
	1.2 Payments for		(a) exploration and evaluation	(44)	(1,096)
		(b) development
		(c) production
		(d) administration		(162)	(443)
	1.3 Dividends received
	1.4 Interest and other items of a similar nature received			21	75
	1.5 Interest and other costs of finance paid
	1.6 Income taxes paid
1.7 Other - PACE Funds Received				54
	1.7 Other - Rebates
	Net Operating Cash Flows			(185)	(1, 410)
	Cash flows related to investing activities
	1.8 Payment for purchases of:		(a) prospects
			(b) equity investments
			(c) other fixed assets	(17)	(22)
	1.9 Proceeds from sale of:		(a) prospects
			(b) equity investments
			(c) other fixed assets		1
	1.10 Loans to other entities				(9)
	1.11 Loans repaid by other entities
	1.12 Other (provide details if material)
	Net Investing cash flows			(16)	(30)
	1.13 Total operating and investing cash flows
	(carried forward)			(201)	(1,440)

	1.13 Total operating and investing cash flows
	(brought forward)(201)		(1,440)
	Cash flows related to financing activities
	1.14 Proceeds from issues of shares, options, etc	1,970		1,970
	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 costs)		(78)	(78)
	Net financing cash flows1,892			1,892
	Net increase (decrease) in cash held	1,691		452
	1.20 Cash at beginning of quarter / year to date	1,431		2,670
	1.21 Exchange rate adjustments to item 1.20
	1.22 Cash at end of quarter		3,122	3,122
	Payments to directors of the entity and associates of the directors
	Payments to related entities of the entity and associates of therelated entities			Current quarter $A'000
	1.23 Aggregate amount of payments to the parties included in item 1.2			35
	1.24 Aggregate amount of loans to the parties included in item 1.10
	1.25 Explanation necessary for an understanding of the transactions
	Directors' fees and superannuation for the Quarter
Non-cash financing and investing activities
2.1	Details of financing and investing transactions which have had a material effect on consolidatedassets and liabilities but did not involve cash flows
	Nil

3

2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

	Nil
Financing facilities available		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

Estimated cash outflows for next quarter	$A'000
4.1 Exploration and evaluation	490
4.2 Development
Total	490

Reconciliation of cash

L.

	Reconciliation of cash at the end of the quarter (asshown in the consolidated statement of cash flows) tothe related items in the accounts is as follows.	Current quarter$A'000	Previous quarter$A'000
5.1.	Cash on hand and at bank	909	427
	5.2 Deposits at call	2.213	1.004
	5.3 Bank overdraft
5.4	Other (provide details) - 30 and 60 day term deposits
	Total: cash at end of quarter (item 1.22)	3,122	1.431

Changes in interests in mining tenements

Tenement	Nature of interest		Interest at Interest at
reference		beginning	end of
	(note 2)	of quarter	quarter

• 6.1 Interests in mining tenements relinquished, reduced or lapsed
• 6.2 Interests in mining tenements acquired or increased

Issued and quoted securities at end of current quarter

		Total number	Numberquoted	Issue price persecurity (cents)	Amount paid upper security (cents)
7.1	Preference securities
	(description)
7.2	Changes during quarter
	(a) Increases through
	ÍSSUeS(b) Decreases through
	returns of capital, buy-
	backs, redemptions
	7.3 Ordinary securities	43,375,001	25,250,000	Fully Paid	Fully Paid
7.4	Changes during quarter	8,375,000	5,250,000
	(a) Increases throughíssues			Fully Paid	Fully Paid
	(b) Decreases through
	returns of capital, buy-
	backs
7.5	Convertible debt
	securities
	(description)7.6 Changes during quarter
	(a) Increases through
	ÍSSUes
	(b) Decreases through
	securities matured,
	converted
7.7	Options			Excise Price	Expiry Date
	(description and	5,000,000		20 cents each	24/03/2009
	conversion factor)	2,600,000		20 cents each	4/04/2009
		2,000,000		20 cents each	26/07/2009
		650,000		20 cents each	27/07/2009
		40,000		32 cents each	23/09/2009
		50,000		32 cents each	15/12/2009
		30,000		40 cents each	31/12/2010
		40,000		40 cents each	5/02/2011
	7.8 Issued during quarter	30,000		40 cents each	31/12/2010
		40,000		40 cents each	5/02/2011
	7.9 Exercised during quarter	2,500,000		20 cents each	24/03/2009

	ັ
7.10 Cancelled during quarter
7.11 Debentures(totals only)
7.12 Unsecured notes(totals only)

Compliance statement

• 1.0 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).
• 2.0 This statement does give a true and fair view of the matters disclosed.

Sign here:................................... Company Secretary

DONALD STEPHENS

Print name: .......................................

Notes

1.0	The quarterly report provides a basis for informing the market how the entity'sactivities have been financed for the past quarter and the effect on its cashposition. An entity wanting to disclose additional information is encouraged todo so, in a note or notes attached to this report.
2.0	The "Nature of interest" (items 6.1 and 6.2) includes options in respect ofinterests in mining tenements acquired, exercised or lapsed during the reportingperiod. If the entity is involved in a joint venture agreement and there areconditions precedent which will change its percentage interest in a miningtenement, it should disclose the change of percentage interest and conditionsprecedent in the list required for items 6.1 and 6.2.
3.0	Issued and quoted securities The issue price and amount paid up is not requiredin items 7.1 and 7.3 for fully paid securities.
4.0	The definitions in, and provisions of, AASB 1022: Accounting for ExtractiveIndustries and AASB 1026: Statement of Cash Flows apply to this report.
5.0	Accounting Standards ASX will accept, for example, the use of InternationalAccounting Standards for foreign entities. If the standards used do not address atopic, the Australian standard on that topic (if any) must be complied with.