PTR MINERALS LTD — Interim / Quarterly Report 2010

Mar 16, 2010

Petratherm Ltd

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Contents [to | Half | Year | Report |

Directors'⊪Report ………………………………………………………………………………………………
AuditorislindependencelDeclaration
Consolidated Statement Tof Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes lin Equity
Consolidated Statement TofiCash Flows
NoteslitolithellFinanciallStatements
SUMMARY OF ISIGNIFICANT LACCOUNTING POLICIES$\mathbb{R}$
SEGMENT INFORMATION$\Box$
ISSUEDICAPITAL$\mathbb{R}$
SHARE BASED PAYMENTS$\mathbb{R}$
SUBSEQUENTIEVENTS$\sqrt{2}$
CONTINGENT LIABILITIES$\mathbb{R}$
GOING CONCERN BASIS OF ACCOUNTING $\mathbb{I}$ $\mathbb{I}$ $\mathbb{R}$
Directors'lDeclaration
Independent Auditor's Review Report

Directors'[Report] $\mathsf{I}$

ThelldirectorslloflPetrathermlLtdlllPetrathermlllsubmitlltheirllreportlforlthelhalfllyearlendedll ll December[11] 1111

Thellnamesloflthellcompany'slidirectorslinllofficellduringlithellhalfllvearllandlluntillithelldatelloflthisl reportllarellasllbelowllDirectorsllwerellinllofficellforllthisllentirellperiodllunlessllotherwisellstatedll

DereklCarterllChairmanlll TerrylKallisIIIIManaginglDirectorIII RichardlBonythonl RichardIHillisII SimonlOLoughlinl $\mathbb{I}$

ReviewloflOperationsl

SUMMARY11

$\Box$

Duringlithellsixllmonthslitoll II IDecemberIII II III IIIPetrathermlachievedlseverallsignificantlgoalsIII drilling[al]deep[well[at]the[company's[flagship[Paralana[geothermal]energy]project[[awarding] oflallFederallGovernmentllgrantlllandlnegotiatingllanllimportantllMemorandumlloflUnderstandingl with lone lof lEurope's llarges t lutility lcompanies LEne I lito ladvance lits Spanish lorojects II

InDecemberIII IIIIIIPetrathermlandlourliointliventurelipartnersliBeachlEnergylLtdIIformerlyl BeachlPetroleumlllandlTRUenergvlGeothermallPtvlLtdllcompletedlthelParalanall Ideepl iniectorlwellltollaldepthloflll lll ll millTemperaturelmeasurementslwereltakenlinllFebruaryll ll ll ll andMbasedlonltemperaturelloggingldatallithelextrapolatedlParalanaM litemperaturellatM M 0 0 0 metreslislbetweenlilloClandlilloCllexceedinglithellllooCltargetedlforleconomicl developmentIII

In November II I I II lithelioint Iventurel project Iwas Irecognised Iby Ibeing I awarded Ia II I II II Imillion I RenewablellEnergyllDemonstrationllProgramllREDPlllgrantllbylthellFederallGovernmentllThisll funding[will][go]toward[building[a]] [] MW[|zerol|emission][]geothermal|[energy][powerl]generation] projectlatllParalanalfollowinglproofloflconceptll

ToldatellithellParalanalprojectlhaslreceivedli l ill ImillionlunderlithelCommonwealthl Government's IGeothermal IDrilling IProgram IIIGDP IIItoward Ithe Icost Iof Ithe IParalana III Iwell IIIAI further[1] [] I] [million[in]GDP[crant[monies][is][available][for[]the[]Paralana]] [well[1]

PetrathermlinitiatedlanlinnovativellsolarlithermallitechnologyllprojectlcalledllHeliotherml IformerlyIreferredItolasIGeoSolarIIIIInIDecemberII | | | | IIthisIprojectIwasIofferedIaII | | | | | | | | | | grantlunderlithelSouthlAustralianlPremier'slSciencelandlResearchlFundlIThelHeliotherml projectlaimsltolreducelthelcostloflsolarlthermalltechnologylbylintegratinglsolarlthermalll qeothermallandlcombustionlitechnologiesll

AtlithellendloflithellperiodlithelCompanylheIdII | III | ImillionlinlcashIII $\Box$

CORPORATE HIGHLIGHTS III

$\Box$

ThelParalanalJointlVenturelwaslawardedlall || || || || || || || || || || || || | Government'sll I I I I Imillion Renewable Energy I Demonstration I Program III

Thislgrantliwilllcontributelitolithelicostloflbuildinglall || MWlcommercialldemonstrationllprojectlatl ParalanallsubsequentltoltheliproofloflconceptlstagellcurrentlylunderwaylatlParalanall

ThellongerlitermlaimlforlithellParalanallprojectlislitolideveloplAustralia'slfirstllargelscalellll l l l plus[]MW][]base]]load[]qeothermal[]power[]station[]to[]deliver[]zero[]emission[]electricity[]to[]the NationallElectricitylMarketll

$\Box$

Furtherldrillinglgrantlfundsll

PetrathermllonlbehalflloflthellParalanalUointlIVenturellUVIIIProjectlwaslsuccessfullwithlitsl application[lunder]the]Commonwealth]Government's[] [] [] [] million]Geothermal[Drilling]Program[] IGDPIllandlhaslireceivedIl I III ImillionloflithelmaximumlarantlamountlofIl I ImillionIITheIGDPI provideslforll ll lupfrontlfundingllPetratherm'slsharelbeingll ll lorll ll ll ll ll ll ll ll ll ll ll ll ll

PetrathermlcontinuedlitslleadershiplwithinlithelgeothermallenergylindustrylwithlitslManagingl DirectorlTerrylKallisllreappointedlChairmanloflthelAustralianlGeothermallEnergylAssociationl [IAGEA][landl]its]|representative[ltol]the[Stakeholder][Committee|lof|lthe[Australian][Energy[Market] Commission'slreviewloflEnergylmarketslinllightloflClimatelChangelPolicieslIII

AGEAllcommissionedlanllindependentllreportllbylleadingllenergylleconomicsllfirmllMcLennanll MagasaniklAssociateslIIMMAlllIthelcompanylthatlladvisedlithelFederallGovernmentlonlithel designloflthelCarbonllPollutionllReductionllschemellandllRenewablelEnergyllTargetlll

Thellreportllstudiedllthellcostllbenefitllofllconnectingllanllelectricitylltransmissionllinellfroml InnaminckallnearlMoomballinllnorthernllSouthlAustraliallviallOlympiclDamlltolDavenportllnearll PortllAugustalHtakinglinlthellgeothermallenergyllprojectslloflGeodynamicsllLtdlinlthelCooperll BasinlandlPetrathermlinllthelArrowielBasinlinlithelInorthernlFlinderslRangeslIII

The Imajor If inding Iof Ithe IMM A Ireport I was Ithat I investing II I II million Iin I power II transmission I would||create||savings||of||| || || || || || || || || || || ||| ||| ||| ||| ||| || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || || | customersloflthelNationallElectricitylMarketlfroml1 0 0 0 ltol1 0 0 0 10 0

$\Box$ OPERATIONS HIGHLIGHTS

$\Box$

Paralana

DrillinglofthelfirstldeeplinjectionlwelllParalanall lwaslfinishedlduringlDecemberll l l l tolal depthloffl | | | | | | | | | | | | | | | | | |

In Tebruary II II II II temperature II oas Iwere Itaken lover Ithe II ower Icased Ihole II more Ithan II II I weekslafterlicirculationloflitheliwelliceasedillallowinglenoughlitimeliforlithelibottomlisectionloflitheli well[tollbelcloseltolthermallequilibriuml]

ThelitemperaturellatIII II II II ImetreslusinglalcontinuousllogginglitoollwasImeasuredlatIII II °CII whilstllallseparatellmaximumlitemperaturellogginglitoollmeasuredllalltemperaturellofll I I °Cllatllal depth lof III III II Imetres III

ThelParalanalD litemperaturellextrapolated hold 00 00 Imetres lis between 00 0 0 ° Cland 00 0 0 ° C 00 10 0 ° C 00 10 0 ° C 00 10 0 ° C 00 10 0 ° C 00 10 0 ° C 00 10 0 ° C 00 10 0 0 10 0 1 This Isianificantly lexceeds Ithe Iminimum Itemperature Iof II I °C Itaraeted If or Ithe Ieconomic I developmentloflthelParalanalresourcell

Thellforwardllplanllislltollcreatellallmultillzonellfracturingllprogramlltollcreatellanllundergroundllheatll exchangelreservoirllDrillingloflalsecondldeeplgeothermallwellllParalanall llislplannedlinlithel finallguarterlofll | | | | | | | | | | | | | | | | | | Petrathermlaimsltolbuildlalpilotlpowerlplantlonlsitelll

ThellfinallinstallationloflalbassivelseismiclarravlwaslcompletedlduringlithelithirdlquarterllThisl arraylhaslcapturedlnaturallbackgroundlseismiclinformationlandlwilllbelusedltolrecordlthel locationloflmicrollseismicleventsliduringlrocklifracturingliforlithellundergroundliheatlexchangerll

Spain

In March II II II II Petratherm lannounced lithelsigning loft al Memorandum loft Understanding I [IMOUI][with]Enel]Green[Power[|tol]jointly[lassess][and][develop[|its][electricity[]producing] qeothermallbrojectslinlSpainlandlitolexpandlitslorojectloortfoliolacrosslithellberianlPeninsulall

EnelDGreenDPowerDtheDrenewableDenergyDsubsidiaryDofDtheDEnelDGroupDisDaDworldDleaderDinD geothermallpowerlgenerationlwithllaboutlll I II IMWIoflcapacitylloperatingllandlhasllallprojectll developmentllportfoliollofllmorellthanlll I I MWIII

ThellMoUllprovideslforlthelfollowinglarrangementsll

• CooperativeldevelopmentloflelectricitylproducinglprojectslonlthellberianlPeninsulal andlthelCanaryllslandslll
• Directlandlexternallexplorationlcostsltolbelsharedlonlall | || || || || basislwith||Speciall $\bullet$ PurposelVehicleslISPVslltoltakelforwardlprojectslthroughldevelopmentlphaseslwithl eachlprojectltolbelnegotiatedlafterlsufficientlexplorationlworklislcompletedll
• Formationloflaltechnicallcommitteellcomprisinglrepresentativesloflbothlpartiesltol overseelthelexplorationlandldevelopmentlprogramllandl
• InlrelationltolthelmoreladvancedlTenerifelprojectllEnellGreenlPowerlItoll
  • o Contributell || || || || || || || || || || || || |
  • o Fundlithelifrstildeepliproductionliwellinilreturnliforlalmajorityllequitylistakelinlitheli projectll

Tenerifell

SinclairllKnightlMerzllhaslbeenllassistingllPetrathermlinllthellsearchliforllallhotlifluidlireservoirllonl thellvolcaniclislandloflTenerifellandlislanalysinglscientificldatallincludingldatallfromlalrecentl extensivelimagnetolitelluriclisurvevliltollocatellaliprospectivelisiteliforlialideepilproductionliwellill PetrathermlEspañalhaslthreelGeothermallExplorationlLicensesllGELslllonlTenerifellthel largestlloflthelCanaryllslandslinlthislSpanishlarchipelagollofflthelwestlcoastlloflNorthlAfricalIII

GeoMadridDistrictHeatingProject

WorklislcontinuinglunderlithelicooperativellagreementllPetrathermllenteredlintolwithlithel SpanishllFederallandllMadridllRegionalllgovernmentslltollprogresslalll MWlMadridllGeothermall DistrictlHeatingllGDHllprojectll

Petratherm's[]Madrid[]GDH[]project[]has[]been[]highlighted[]as[]one[]of[]six[]renewable[]energy[] projectsloflinterestlwithinlthellMadridlRegionallGovernment'slRenewablelEnergylClusterllI whichlislseekingltoladvancelrenewablelenergylprojectslinlthelMadridlregionll

ThellCooperativelAgreementllprovideslforllallCommitteellcomprisedllofllrepresentativesllofll PetrathermlandlithelitwollSpanishligovernmentslitollexpeditelitheliremaininglistepsloflitheliprojectil thatlarelirequiredltollachievelfinanciallclosell

Heliotherm

PetrathermllhasladdedlanlinnovativellsolarlithermalltechnologyllprojectllIHeliothermltolitsl project@portfolio@In@December@@@@@Muthis@@@@@project@under@its@ earlierlInamelGeoSolarlIlwaslofferedlall || || || || || || || || || || || || | SciencellandlResearchlFundll

ThellHeliothermllproject'slfocuslisltolreducelthelcapitallcostsloflsolarlthermalltechnologylbyl upltoll II IbylintegratinglsolarlthermalligeothermallandlcombustionlitechnologiesIIIPetratherml haslanlagreementlwithlithellUniversitylloflAdelaidellforllanllexclusivellrightlitollthelluselloflithell intellectuallpropertyllgeneratedlfromlithellHeliothermllresearchllandlldevelopmentlllIThell HeliothermlprojectlislbeinglledlbylProfessorlGrahamlIGuslllNathanlfromlthelUniversitylofl Adelaide's[lhighlyl]regarded[Centrel]forl]EnergylTechnologyll

ThellCompanyllwilllapplyllforllfurtherllgrantllmonieslinlthellcomingllmonthslllavailablelthroughl bothlStatellandlFederallprogramslltollassistlinlithellfundinglofltheltechnologylldevelopmentll

Chinal

PetrathermllhostedlallhighlilevellChineselldelegationllduringlOctoberll l l l l laslitheligroupl pursuedlifurtherliresearchlintolidevelopingligeothermallenergylinliChinallTheligrouplilincludingli thellVicelDirectorloflthelChinalInstituteloflGeoEnvironmentlMonitoringlIthelChairmanloflthell GeothermallChinalEnergylSocietyllandlthelDirectorloflthelFujianlSouthernllnstitutellofl GeothermallandlMinerallSpringllIhaslbeenlworkinglwithlPetrathermlthroughlalcooperativel agreementll

DuringlthelivisitltollAustraliallitheligrouplidiscussedlithelinextlistepslinliprogressinglEngineeredl GeothermallSystemslandlPetratherm'slinvolvementlinlfuturellprojectsll

PetrathermlhaslcompletedlitslEngineeredlGeothermallProjectlProspectivitylassessmentlforl ChinalllwhichliformedlithelbasislofilanllAsiallPacificlpartnershiplgrantllawardedlbylithellAustralianll FederallGovernmentllThislworklidentifiedlseverallnewlprospectivelgeothermallsiteslforl electricityllgenerationIII

$\begin{bmatrix} 1 \ 2 \end{bmatrix}$

Auditor's lindependence declaration

Thellauditor'slindependencelldeclarationlislsetlloutllonllpagell llandlformsllpartlloflthelldirectors'll reportliforlithelihalfliyearlendedlil il IDecemberill il II II II $\begin{bmatrix} 1 \ 2 \end{bmatrix}$

Signedlinlaccordancelwithlalresolutionloflthelboardlofldirectorsll $\begin{bmatrix} 1 \ 2 \end{bmatrix}$

Y Kill

$\mathbb{I}$

MrlTerrylKallisl ManaginglDirectorl $\mathbb{I}$ II MarchII III

Level m mIII IGreenhill RdlWayville SAI11111GPOIBoxIIIIIIAdelaide SAI11111Л$T$ mn mnnnnnnnnnnF0000000000000Elinfo@gtsalcomlaulWilwwwilgrantthorntonllcomilaul

$\overline{a}$

AUDITOR'S INDEPENDENCE DECLARATION TO THE DIRECTORS OF PETRATHERM LTD

$\Box$

$\Box$

$\Box$ $\Box$ $\Box$

In accordance with the requirements of section III I C of the Corporations Act III III as lead auditorIorItheTeviewOfPetrathermLtdTorItheThalfTyear@ndedIIIDecemberIIIIIIIIIIIII declare that I to the best of my knowledge and belief I there have been III

• nolcontraventions of the auditor Independence requirements of the Corporations Act a THE Felation folthe Feview Land
• $\mathbf{b}$ no contraventions of any applicable code of professional conduct in relation to the review□

GRANTTHORNTONIII SouthAustralianPartnership Chartered Accountants $\Box$ $\Box$ Г $\Box$ JIHumphrey Partner $\Box$ $\Box$ Signed at Adelaide on this The day of March $\Box$

Grant/Thornton/South/Australian/Partnership/ABN/0000000000000

allsubsidiaryllorltrelatedllentitylloflGrantlThorntonlAustralialLtdlABN00000000000000

Grant/Thornton/Australia/Limited/is/a/member/firm/within/Grant/Thornton/InternationalLLtd/Grant/Thornton/International/Ltd/and/the/member/firms/are/not/a/worldwide/partnership/I/Grant/Thornton/Australia/Limited/I/together/ with@itslsubsidiaries@and@related@entities@delivers@itslservices@independently@in@Australia@

LiabilityllimitedlbyllallschemellapprovedllunderllProfessionallStandardslLegislation

OuriRefilHiMDMWORD\FOREVER\IAR\INDEPENDENCEIDECLARATIONS\IIIII\PETRATHERMILIMITED_DECIIIIIDOCi

Consolidated Statement Tof Comprehensive Income

		ConsolidatedHalf-year ended
		31 Dec 2009	31 Dec 2008
	Note	$	$
RevenueImpairment of exploration assetsEmployee benefits expenseDepreciation expenseOther expenses		186,845(74,006)(1,000,261)(28, 310)(1,075,940)	740,032(1,044,648)(656, 414)(22, 633)(979, 459)
Loss before income tax expense		(1,991,672)	(1,963,122)
Income tax expense		(1, 877)	(360)
Profit/(Loss) from continuing operations		(1,993,549)	(1,963,482)
Loss for the period		(1,993,549)	(1,963,482)
Other comprehensive incomeExchange differences arising on translation of
foreign operations		(204, 342)	179,626
Total comprehensive income for the period		(2, 197, 891)	(1,783,856)
Total comprehensive income attributable to:Members of the parent entityNon-controlling interest		(2, 197, 891)(2, 197, 891)	(1,783,856)(1,783,856)
Earnings per share from continuing operationsBasic earnings per shareDiluted earnings per share		Cents(2.12)(2.12)	Cents(3.39)(3.39)

Thelconsolidatedlstatementloflcomprehensivelincomelisltolbelreadlinlconjunctionlwithlthelnotesltolthel consolidatedlinterimlfinanciallreportll $\mathbb I$

Consolidated Statement of Financial Position

ASIATIO ODECEMBERIO OO O

$[] \centering \includegraphics[width=0.47\textwidth]{images/TransY_1.png} \caption{The first two different values of $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $100$ K, $10$		Consolidated
		31 December2009	30 June2009
	Note	$	$
CURRENT ASSETSCash and cash equivalents		2,327,039	13,002,052
Trade and other receivablesOther current assets		2,031,45152,628	2,317,69959,944
TOTAL CURRENT ASSETS		4,411,118	15,379,695
NON-CURRENT ASSETSProperty, plant and equipmentExploration and evaluation assets		201,97914,469,289	191,3565,549,372
TOTAL NON-CURRENT ASSETS		14,671,268	5,740,728
TOTAL ASSETS		19,082,386	21,120,423
CURRENT LIABILITIESTrade and other payablesDeferred incomeShort-term borrowingsShort-term provisions		1,755,3706,032102,547	4,522,141683,6116,03288,840
TOTAL CURRENT LIABILITIES		1,863,949	5,300,624
NON-CURRENT LIABILITIESLong-term borrowingsLong-term provisionsDeferred government grants		30,54274,6802,898,000	33,78374,133
TOTAL NON-CURRENT LIABILITIES		3,003,222	107,916
TOTAL LIABILITIES		4,867,171	5,408,540
NET ASSETS		14,215,215	15,711,883
EQUITYIssued capitalReservesRetained earningsParent entity interestNon-controlling interest	3	23,505,429412,940(9,703,154)14,215,215	23,048,738628,851(7,965,706)15,711,883
TOTAL EQUITY		14,215,215	15,711,883

Thelconsolidatedlstatementloflfinanciallpositionlisltolbelreadlinlconjunctionlwithlthelnotesltolthelconsolidatedl interimlfinanciallreportll

$\mathbb I$ $\begin{smallmatrix} 0 & 0 & 0 \end{smallmatrix}$

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ConsolidatedlStatementloflChangeslinlEquityll FORITHEINALFIYEARIENDEDIII IIDECEMBERIII II II $\begin{array}{c} \n\end{array}$

				Consolidated
				Foreign
	Issued		Share	Currency
	Capital	Retained	Option	translation	Minority
	Ordinary	Earnings	Reserve	Reserve	Interest	Total
	မာNote	မာ	မာ	မာ	s,	မာ
Balance at 1 July 2008	14,228,516	(4, 877, 186)	587,735	(7, 419)		9,931,646
Total comprehensive income for the period		(1,963,482)		179,626		(1, 783, 856)
Issue of shares upon exercise of employee options	28,800					28,800
Issue of share options under employee share option plan			224,446			224,446
Transfer from employee equity-settled benefits reserve	5,540		(5,540)
Transaction costs (net of tax)	(840)					(840)
Balance at 31 December 2008	14,262,016	(6, 840, 668)	806,641	172,207		8,400,196
Balance at 1 July 2009	23,048,738	(7,965,706)	814,149	(185, 298)		15,711,883
Total comprehensive income for the period		(1,993,549)		(204, 342)		(2, 197, 891)
Exercise of options at various dates	459,600					459,600
Issue of share options under employee share option plan			246,002			246,002
Transfer from employee equity-settled benefits reserve
upon exercise of vested options	1,470		(1,470)
reserveTransfer from employee equity-settled benefits
upon cancellation of vested options			256,101 (256,101)
Transaction costs (net of tax)	(4,379)					(4, 379)
Balance at 31 December 2009	23,505,429	(9,703,154)	802,580	(389, 640)		14,215,215

$\Gamma$ helconsolidatedlstatementloflchangeslinlequitylisltolbelreadlinlconjunctionlwithlthelnotesltolthelconsolidatedlinterimlfinanciallreportll[]

Consolidated Statement of Cash Flows

FOR THE THALF TEAR ENDED TO DECEMBER TO THE

	Consolidated
	Half yearended	Half yearended
Note	31 Dec 2009$	31 Dec 2008$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customersPayments to suppliers and employeesInterest received	19,801(1, 243, 446)167,044	929(1,089,507)115,439
Receipt of Research & Development tax concession		256,472
NET CASH PROVIDED BY/(USED IN) OPERATINGACTIVITIES	(1,056,601)	(716, 667)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipmentGovernment exploration related grantsJoint venture receiptsPayments for exploration activities	(49,000)5,297,5834,609,000(19, 956, 182)	(57, 849)543,4592,551,975(3,511,517)
NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES	(10,098,599)	(473, 932)
CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of sharesTransaction costs of issue of sharesPayment of finance lease liabilitiesProceeds from borrowings	459,600(6, 256)(3,000)36,574	28,800(840)
NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES	486,918	27,960
Net increase/(decrease) in cash and cashequivalentsNet foreign exchange differencesCash at the beginning of the period	(10,668,282)(6, 731)13,002,052	(1, 162, 639)(38, 215)4,587,015
CASH AT THE END OF THE PERIOD	2,327,039	3,386,161

NoteslitolithellFinanciallStatementsl FOR THE THALF TYEAR TENDED TO TO ECEMBER TO THE

MO SUMMARY OF ISIGNIFICANT ACCOUNTING POLICIES IN

all Reportinglentityll

PetrathermllLtdlllthell"Company"lllisllallcompanylldomiciledlinllAustraliallIThellconsolidatedl interiml financiall reportl ofl thel Companyl asl atl andl forl thel sixl monthsl endedl III Decemberll | | | | | || || || || || || || || || Π

ThelconsolidatedlannuallfinanciallreportlloflthelGroupllasllatlandlforlthellyearlendedll ll Junell | | | | | | | | | | | | | | | | | |

$\mathbb{I}$

$h$ Statementloflcompliancell

Thellconsolidatedlinterimlifinanciallireportlislallgenerallpurposelifinanciallireportliwhichlihasli been reported in accordance with Australian Accounting Standards including AASB IIIIIII InterimI FinancialI ReportingI andI theI CorporationsI ActI IIIIIIII ComplianceI withI Australian II Accounting II Standards I ensures I that I the I financiall statements I and I notes I complylwithllnternationallFinanciallReportinglStandardsll

$\overline{\mathbb{I}}$

Thellconsolidatedlinterimllfinanciallreportlldoeslnotlincludellallloflithellinformationllrequiredl for all full annuall financial report and should be read in conjunction with the lannual financiallreportloflthelGrouplaslatlandlforlthelyearlendedlll ll Junell III ltogetherlwithl anvloubliclannouncementslmadelduringlithelhalflyearll

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Significantlaccounting policies $\mathbf{C}$

Apartllfromllthellchangeslinllaccountingllpolicyllnotedllbelowlllthellaccountingllpoliciesllandl methodsloflcomputationlarellthellsamellasllthoselladoptedlinllthellconsolidatedlfinanciall reportlaslatlandlforlthelyearlendedll I IJunell I I II II m

ThellGrouplhasladoptedlallloflthelnewlandlrevisedlStandardslandlInterpretationslissuedl byll thell Australian II Accounting I Standards II Board II Ithell AASBIII that I are I relevant I to I theirl operationslandleffectivelforlthelcurrentlreportinglperiodll

m

NewlandlrevisedlStandardslandlinterpretationsleffectivelforlthelcurrentlreportinglperiodl thatlarelirelevantlitolithelGrouplincludell

m

• $\bullet$ AASBIII IOperating ISegments II
• AASBI II IPresentation lof Financial Statements II

AASBIII IIOperating ISeaments II

AASBIII IIreplaced AASBIII III Segment Reporting Iupon Iits leffective Idate III Information I regarding[Ithe][operating][segments][of][the][Group][is][presented][in][Note][][]][The][amounts][ reportedl forl thell priorl periodl havel beenl restatedl tol conforml toll thell requirementsl ofl AASBII III

$\mathbb{I}$

AASBII II IPresentation Iof IF in ancial IStatements I

Thell revised Standard I separates owner and nonlowner changes in equity The statementloflchangeslinlequitylincludeslonlyldetailslofltransactionslwithlownersllwithl nonllownerllchangeslinllequityllpresentedlinllallreconciliationlloflleachllcomponentllofllequityll andl includedl inl thel newl statementl ofl comprehensivel incomell Thel statementl ofl comprehensivelincomelpresentslalllitemsloflrecognisedlincomelandlexpenselleitherlinl onellsinglellstatementllorllinlltwolllinkedlstatementslllThelGroupllhasllelectedlltollpresentll onellstatementll

NoteslitolithellFinanciallStatementsl FOR THE THALF TEAR TENDED TO DECEMBER TO THE

$\mathbf{d}$ Significant accounting judgements and the yestimates

Thellpreparationllofllinterimllfinanciallreportslirequireslmanagementlltollmakelljudgementslll estimates and assumptions that affect the application of accounting to licies and the the reportedlamountsloflassetsllliabilitiesllincomelandlexpensellllActuallresultslmaylldifferl fromlthesellestimatesll

Exceptlaslidescribedlibelowllinlipreparinglithislinterimlireportllithelisignificantliudgementsl madellbylmanagementlinllapplyinglithellGroup'sllaccountingllpoliciesllandlithellkeylsourcesll ofl estimation luncertainty lwerell the lsame las I those I that I applied I to I the l consolidated I financiallreportlforlthelyearlendedll I IJunell I I II $\mathsf{\Pi}$

InlithellhalflyearlendedlllllDecemberllllllllmanagementlreassessedlitslestimateslinl respectlofl

Π

$\mathsf{I}$

Carrying Ivalue lof lexploration lexpenditure l

Thell Groupli performed lall detailed lireview lof lits lexploration litenements lat liperiod lend lto l determinel whetherl thell relatedl expenditurel shouldl continuedl toll bell capitalisedl underl AASBIII 'ExplorationII forII andII EvaluationII ofII MineralII Resources'II orII writtenII offII toII theII statementl of l comprehensivel incomell I AsI all result of this review II management has I determinedlthatll || || || || || || || || || || || || | $\mathsf{r}$

$\mathsf{\Pi}$

IN SEGMENTINFORMATIONI

ThelGrouplhasladoptedlAASBIII | Operating/Segments/andlAASBIII | 1 | 1 | 1 | 1 | 4 | 0 | 1 | 1 | 1 | 1 | 1 | 1 AustralianlAccountinglStandardslarisinglfromlAASBII fwithleffectlfromll [Uulyl] [1] [1] [1] AASBI Il requires loperating lisegments litelle lidentified lon lithe libasis lof linternal reports labout l componentsloflthelGrouplthatlarelregularlyllreviewedlbylthelchiefloperatingldecisionl makerlinllorderlitollallocatellresourceslitolithellseqmentsllandlitollassesslitsllperformancellIInl contrastllithelipredecessorlStandardllAASBII I II SegmentlReportingll/requiredlanlentityltol identifyltwollsetslofllsegmentslllbusinessllandllgeographicalllllusingllallriskllrewardsll approachllwithlithellentity'sli'systemloflinternallfinanciallreportinglitoli'keylmanagementll personnel'llservingllonlyllasllthellstartingllpointllforllthellidentificationllofllsuchllsegmentslllAsllall resultIIfollowinglitheliadoptionlofIAASBII IIthelidentificationlofIthelGroup'slreportablel seamentslhaslichangedli

$\mathbb{I}$

Segmentlinformationllreportedlexternallyllwasllanalysedllonllthellbasislloflthellbusinessll segmentslencounteredlbyllPetrathermllnamelyllExplorationlinlbothlAustralialandlSpainlll HoweverllinformationlireportedlitolithellCompany'slManaginglDirectorlforlithellpurposeslofl resources[lallocation[land] lassessment[lof] berformance[lis] more[specifically] focused [lon [lthe areaslinlwhichlthelGrouplislexploringlinlAustralialandlSpainllaslwelllaslthelCompany'sl ParalanalProjectllThelGroup'slreportablelsegmentslunderlAASBII larelthereforelasl follows

$\mathbb{I}$

• ExplorationlactivitiesllilAustraliallexcludinglithellParalanallProjectllill $\bullet$
• ExplorationlactivitiesIIISpainIIandI $\bullet$
• ExplorationlactivitiesIIIParalanalProjectIII $\bullet$

$\mathsf{I}$

InformationliregardinglithesellsegmentslislipresentedlibelowlliAmountslireportedliforlitheliprioril periodlhavelbeenllrestatedltollconformlltollthellrequirementsloflAASBII IIIThellaccountingl policies loft the lnew treportable tsegments tare the tsame tast the Croup's laccounting tholicies III

$\overline{\mathbb{R}}$

NoteslitolithellFinanciallStatementsl FOR THE THALF TEAR TENDED TO DECEMBER TO THE

Thell followingli isli anli analysisli of the Group's revenuel and results by reportable coverating segmentlforlthelperiodslunderlreviewll

	Segment RevenueHalf Year ended		Segment Result
			Half Year ended
	$31 - Dec$	$31 - Dec$	$31 - Dec$	$31 - Dec$
	2009	2008	2009	2008
	$	$	S	$
Continuing Operations
Australia (ex Paralana)			(74,006)	(1,044,648)
Paralana Project	19,801
Spain
	19,801		(74,006)	(1,044,648)
Administration/Corporate	167,044	740,032	(1,889,356)	(895, 841)
Depreciation			(28, 310)	(22, 633)
Consolidated revenue	186,845	740,032
Profit/(Loss) before income tax			(1,991,672)	(1,963,122)
Income tax benefit			(1, 877)	(360)
Profit/(Loss) for period			(1,993,549)	(1,963,482)

Thellrevenuellreportedlabovellrepresentsllrevenuellgeneratedlfromlfinanciallinstitutionsllandl jointliventurelipartnersllThereliwerelinolintersegmentlisalesliduringlitheliperiodll

Segmentllprofitllllosslilrepresentslithellprofitllllosslillearnedlbylleachlisegmentliwithoutllallocationll oflcentralladministrationlcostslldepreciationlandlincomelitaxllexpensellbenefitllThislislithel measurelireportedlitolithelichiefloperatinglidecisionlimakerliforlithelipurposeslofliresourcesl allocationlandlassessmentloflsegmentliperformancelli $\mathbb{I}$

SegmentlAssetsll

Wherelanlassetlislusedlacrosslmultiplelsegmentsllthelassetlislallocatedltolthelsegmentlthatl receives lithelmajority lofleconomic lyaluel from lithelasset Ill nlthelmajority loflinstances Ilsegment l assetslarelclearlyllidentifiablellonlithelbasisloflitheirlnaturellandllphysicalllocationlllThelfollowingl islanlanalysisloflthelGroup'slassetslbylreportableloperatinglsegmentll $\mathbb{I}$

	OpeningBalance	ExplorationExpenditure	Impairment	ClosingBalance
	1/07/2009			31/12/2009
			$	$
Continuing Operations
Australia (ex Paralana)	123,965	68,258	(74,006)	118,217
Paralana Project	3,300,742	8,513,416		11,814,158
Spain	2,124,665	412,249	$\overline{\phantom{0}}$	2,536,914
Total segment assets	5,549,372	8,993,923	(74,006)	14,469,289
Other
Administration/Corporate (i)	15,571,051			4,613,097
	21,120,423			19,082,386

(i) Administration assets largely relate to unallocated cash assets.

NotesltolthelFinanciallStatementsll FOR THE THALF TYEAR TENDED TO DECEMBER TO THE $\overline{\mathbb{R}}$

III ISSUEDICAPITALI

$\mathbb{R}$

	Consolidated
	As at	As at
	31-Dec-09	30-Jun-09
Issued capital
Fully paid ordinary shares	23,505,429	23,048,738
		23,505,429 23,048,738
	2009
	Number	$
Balance at beginning of period		92,213,673 23,048,738
Exercise of options at various dates	2,280,000	459,600
Transaction costs on share issue		(4,379)
Transfer from share option reserve		1,470
Balance at end of financial year	94,493,673	23,505,429

$\mathbb{I}$

II SHAREIBASEDIPAYMENTSI

ThellcompanyllhasllestablishedlithellPetrathermlLtdlEmployeelSharelOptionlIPlanlithatlentitlesl employeesltollreceivellunlistedlloptionslinllthellentityllasllanllincentivell/Thelltermsllandllconditionsl oflthelisharelloptionllplanllarelldisclosedlinllthellconsolidatedlfinancialllreportllasllatllandlforlthell yearlendedli i IJunell I II IIInlithelhalflyearlfurtherligrantlonlisimilarltermslwaslmadeltol PetrathermlLtdlpersonnelll

$\mathbb{I}$

Theltermslandlconditionsloflthelgrantlmadelduringlthelsixlmonthslendedll II IDecemberll IIII aslifollowsll

$\mathbb{I}$

Grant date	Number ofinstruments	Vestingconditions	Contractuallife of options
	1,060,000	On Issue	5 years
Fair value at grant dateShare priceExercise priceExpected volatilityRisk-free interest rate			$$0.21 - $0.25$$$0.37 - $0.41$$0.5074.02%5.23% $\sqrt{ }$

NoteslitolithellFinanciallStatementsl FOR THE THALF TYEAR TENDED TO TO ECEMBER TO THE

MO SUBSEQUENTIEVENTSI

$\mathsf{\Pi}$

$\mathsf{\Pi}$

Temperaturellmeasurementlconfirmslexpectationsl

OnlithellstllMarchlll || || || || || || || || || || || || TRUeneravlGeothermallannouncedlithatlitemperaturellogslhavelbeenlitakenloverlithellowerl casedlholelsectionloflthelParalanall lwellll

Thelitemperaturelmeasuredlatll ill ill imetresiusinglalcontinuousiloggingltoollwasll il i °Cill whilstlallseparatellmaximumlitemperaturellogginglitoollmeasuredlalltemperaturellofll ll i °Clatlall depth of III III III II metres IIII

$\mathbb{I}$

BasedlonlithelitemperaturellogginglidatallithelextrapolatedlParalanall libottomlholelitemperaturel islbetween[1][] °Cland[1][] °Clatlaldepthof[1][1][] Imetres[1]

$\mathbb{I}$ $\mathbb{I}$

PetrathermlEspañalsignslalMemorandumloflUnderstandinglwithlleadinglEuropeanl renewablelenergylcompanyll

$\sqrt{ }$

Petratherm[lLimited[lis[lpleased[lto[ladvise[lthat]]Petratherm[España[has]signed[la[Memorandum] oflUnderstandingIIIMoUIIIwithIIEnellGreenIPowerltolljointlyllassesslandIIdeveloplitslelectricityl producingligeothermallprojectslinllSpainlandltollexpandlitsliprojectliportfoliollacrosslithelliberianl PeninsulallIII

$\Box$

EnellGreenlPowerlIEGPIllthelrenewablelenergylsubsidiaryloflthelEnellGrouplIlislalworldl leaderlinligeothermallbowerligenerationliwithliabout [1] I IMW loflcapacity loperating land lhas lal projectldevelopmentlbortfolioloflmorelthan[1] [1] [IMWI]

Share Purchase Plan

$\overline{\mathsf{n}}$

OnII I IMarchII I I II IIIthelCompanylannouncedlitslintentionltolofferlshareholderslithellabilityltol participatelinlalSharelPurchaselPlanllThelplanlenablesleligiblelshareholdersltolpurchasellupl toll || || || || || || || || || || || || |

$\mathsf{\Pi}$

III CONTINGENTILIABILITIESI

Therellhaslibeenlinolichangelinilcontingentiliabilitieslisincelithellastilreportinglidatelliltilislihoweverli notedlthatlthelGrouplhaslvariouslbanklauaranteesltotaling\000000000000000000000000000000000000 whichlactlaslcollateralloverlitenementslwhichlPetrathermloperatesll

NoteslitolithellFinanciallStatementsl FOR THE THALF TYEAR TENDED TO DECEMBER THE TH $\mathbb{I}$

MACCONGCONCERNMBASISMOFMACCOUNTINGM

$\mathbb{R}$

Thelfinanciallreportlhaslbeenlpreparedlonlthelbasisloflalgoinglconcernll $\mathsf{r}$

ThellcashliflowllprojectionslloflithellGrouplindicatellthatllGrouplislireliantllonlithellcompletionllofllal capitallraisingliforlcontinuedloperationsllThelGrouplwilllbelseekinglitolraisellequitylitolifundl operationsllincludinglexplorationlandlworkinglcapitalll $\mathbb{I}$

Ifladditionallcapitallislnotlobtainedllthelgoinglconcernlbasislmaylnotlbelappropriatellwithlthel resultlithatlitheliGrouplimayllhavelitolirealiselitslassetslandlextinguishlitsliliabilitiesllotherlithanlinl thellordinaryllcourselloflbusinessllandllatllamountslldifferentllfromlthosellstatedlinllthellfinanciall reportIIIINollallowancellforllsuchlcircumstanceslhaslbeenlmadelinlthellhalflyearlfinanciallreportII

Directors'Declaration

$\mathbb{I}$ InlaccordancelwithlalresolutionlofltheldirectorsloflPetrathermllLtdllllstatelthatll $\mathbb{I}$

Inlithellopinionloflithelldirectorsll

$\mathbb{I}$

• Ial thelfinanciallstatementslandlnotesloflthelconsolidatedlentitylarelinlaccordancelwithl the Corporations Act[1] 1 1 Illincluding III
  • Dill givelaltruellandlifairliviewloflthelfinanciallpositionlaslatll DDecemberlDDDDandD thelperformancelforlthelhalflyearlendedlonlthatldateloflthelconsolidatedlentityll $and $\overline{a}$$
  • Iiil complylwith LAccounting IStandard LAASBII I IInterim LF inancial Reporting Land I thellCorporationslRegulationslIIIIIIIIandl

$\mathbb{I}$

[b] therelarelreasonablelgroundsltolbelievelthatlthelcompanylwilllbelableltolpaylitsldebtsl aslandlwhenltheylbecomelduelandlpayablell

$\mathbb{I}$ $\mathbb{I}$

ThislideclarationlislimadellinllaccordancelwithlialiresolutionlioflitheliboardlioflDirectorsll

Y Killi.

$\overline{\mathbb{R}}$

TerrylKallisll ManaginglDirectorl $\mathbb{I}$ OD March11 000

$\overline{a}$

INDEPENDENT AUDITOR'S REVIEW REPORT TO_THE_MEMBERS_OF_PETRATHERM_LTD_

П

$\Box$

$\Box$

$\Box$

$\Box$

We have reviewed the accompanying half year financial report of Petratherm Ltd [Fig. 2] Company" [I] which Comprises [The Consolidated Tinancial statements [being The statement of financial position as at III December III III and the statement of comprehensive Income statement of changes In equity and statement of cash flows for the half year ended on that datellalstatement@flaccounting[policies||lother|selected|explanatory|hotes||and||the directors|| declaration of the consolidated entity Ecomprising both the Company and the entities li controlled at the half year's end or from time to time during the half year III

Directors'TesponsibilityTorTheThalfTyearTinancialTreport

The directors of the Company are responsible for the preparation and fair presentation of the half year financial report in accordance with Australian Accounting Standards Ilincluding the Australian Accounting Interpretations Land the Corporations Act III IIIThis responsibility lincludes lestablishing and maintaining linternal controls relevant fol the preparation and fair presentation of the half year financial report that is free from material misstatementllwhetherIdueItolTraudIorIerrorllselectingIandIapplyingIappropriateIccounting policies and making accounting estimates that are reasonable in the circumstances III

Auditor's responsibility

Our responsibility list to lexpress a conclusion fon the consolidated half year financial report based on our review IIIWe conducted our review in accordance with the Auditing Standard on Review Engagements ASREIIIII Review of Interim and Other Financial Reports Performed by The Independent Auditor of the Entity Lin order to State whether Ton The basis of the procedures described live have become aware of any matter that makes us believe that the financial report is hot in accordance with the Corporations Act III I lincluding giving a true and fair view of the consolidated entity's financial position as at III December III II and its berformance for the half year ended on that date I and complying with Accounting Standard AASB TILL The term Financial Reporting and the Corporations Regulations TILL TIMP

Grant/Thornton/South/Australian/Partnership/ABN/00000000000000000000000000000000000

allsubsidiary/lor/related/lentity/lof/Grant/Thornton/Australia/Ltd/ABN/000000000000

Grant/Thornton/AustraliaLimitedis/a/member/firm/within/Grant/Thornton/InternationalLtd/I/Grant/Thornton/InternationalLLtd/I/Grant/Thornton/InternationalLLtd/I/Grant/Thornton/InternationalLLtd/I/and/the/member/firms/are/not/ withlits/subsidiaries/and/related/entities///delivers/its//services/independently/in/Australia/

LiabilityllimitedlbylallschemellapprovedllunderllProfessionallStandardslLegislation

п

INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF PETRATHERM LTD Cont

Auditor's responsibility Cont

As The auditor of Petratherm Ltd ASRE IIIII requires That we comply with the ethical requirementsTrelevantToTtheTauditTofTtheTannualTinancialTreportIII

A Treview To fia Thalf year financial report consists To finaling enquiries Torimarily To fipersons responsible for financial and accounting matters land applying analytical and other review procedures IIA Teview Is Substantially Less In Scope Than an audit conducted In Accordance with Australian Auditing Standards and consequently does hot enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit III AccordinglyINvedoInotexpressAnAuditopinionIII

Independence

In Conducting our review Twe Complied with the Independence requirements of the Corporations Act IIIIIIIIIIII

Conclusion

Based on our review [[which is not an audit [[we have not become aware of any matter that] makes his believe that the half year financial report of Petratherm Ltd is hot in accordance with the Corporations ActIIIII HincludingIII

• $\overline{a}$ giving a true and fair view of the consolidated entity's financial position as at December TTTand of its performance for the half year ended on that date land
• $\mathbf b$ complying with Accounting Standard AASBIIIIIInterim Financial Reporting and the Corporations Regulations

Significant uncertainty regarding continuation as a going concern

Without qualifying our review conclusion attention is drawn To Note III+ Going Concern Basis of Accounting to the half year financial report IThese conditions Indicate the existence of a material uncertainty which may cast significant doubt about the consolidated entity's abilityToContinue as a going concern II he half year financial report has been prepared on the basis of going concern The consolidated entity will require additional funds for the continued development of their existing projects and working capital III

$\Box$

INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF PETRATHERM LTD Cont

Significant uncertainty regarding continuation as a going concern Cont

The consolidated entity's ability to continue as a going concern is contingent upon successfullyTraisingTadditionalTcapitalIIIfTadditionalTundsTareInotTraisedIItheTgoingTconcern basisImayInotIbeTappropriateIIwithItheTesultIthatItheTonsolidatedTentityImayIhaveItoTealise their assets and extinguish their liabilities lother than in the ordinary course of business and in amounts different from those stated in the half year financial report INo allowance for such circumstances has been made in the half year financial report

GRANTTHORNTONIII SouthAustralianPartnership Chartered Accountants

$\Box$ $\Box$ $\Box$ $\Box$ JIL Humphrey Partner $\Box$ $\Box$

Signed at Adelaide on this The day of March