PTR MINERALS LTD — Investor Presentation 2008

Sep 9, 2008

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PETRATHERM LIMITED ABN 17 106 806 884

Company Update & Overview Presentation

Petratherm’s Managing Director, Mr. Terry Kallis, will present in Sydney on Thursday 11 September to the “Renewables / Future Energy – Meeting of Minds 2008 Forum” sponsored by ABN AMRO.

The Forum will enable eight selected high profile renewable energy companies to meet with over a dozen of the largest institutional investors over three hours to discuss the prospects of their companies and the renewables sector generally.

The three key messages from the Company’s presentation (attached) are as follows:

• Petratherm has developed an international and balanced portfolio of quality geothermal energy projects in Australia, Spain and soon to be developed in China.

• The Paralana Geothermal Energy JV Project is expected to be commercially viable at all stages and is considered the best Australian geothermal energy project.

10 September 2008

ASX Code: PTR

ABN 17 106 806 884

105 Greenhill Road Unley 5061 South Australia

• The Madrid District Heating project exhibits excellent prospects for high internal rates of return with revenues as early as mid 2010.

Yours faithfully

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Terry Kallis Managing Director

Tel: +61 8 8274 5000 Fax: +61 8 8272 8141

MEDIA CONTACT:

W : www.petratherm.com.au E : admin@petratherm.com.au

Terry Kallis Petratherm Ltd 08 8274 5000 Kevin Skinner Field Public Relations 08 8234 9555 / 0414 822 631

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Company Update & Overview Presentation

September 2008

Managing Director Terry Kallis

Disclaimer

This presentation has been prepared by Petratherm Limited (Petratherm). The information contained in this presentation is a professional opinion only and is given in good faith.

Certain information in this document has been derived from third parties and though Petratherm has no reason to believe that it is not accurate, reliable or complete, it may not have been independently audited or verified by Petratherm.

Any forward‐looking statements included in this document involve subjective judgment and analysis and are subject to uncertainties, risks and contingencies, many of which are outside the control of, and maybe unknown to, Petratherm. In particular, they speak only as of the date of this document, they assume the success of Petratherm’s strategies and they are subject to significant regulatory, business, competitive and economic uncertainties and risks. Actual future events may vary materially from the forward looking statements and the assumptions on which the forward looking statements are based. Recipients of this document (“Recipients”) are cautioned not to place undue reliance on such forward‐looking statements.

Petratherm makes no representation or warranty as to the accuracy, reliability or completeness of information in this document and does not take responsibility for updating any information or correcting any error or omission which may become apparent after this document has been issued. To the extent permitted by law, Petratherm and its officers, employees, related bodies corporate and agents (“Agents”) disclaim all liability, direct, indirect or consequential (and whether or not arising out of the negligence, default or lack of care of Petratherm and/or any of its Agents) for any loss or damage suffered by a Recipient or other persons arising out of, or in connection with, any use or reliance on this presentation or information.

All amounts in Australian dollars (AUD) unless stated otherwise.

Corporate Overview

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China – Exclusive
Madrid &
exploration
Barcelona ‐ Direct
agreement
heat, EGS and
hydrothermal
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Tenerife & Gran Canaria – Volcanic South Australia – geothermal Paralana, Callabonna and Renmark

Key Statistics

• Current shares on issue – 57.9m (plus 13.77 m options)

• Market capitalization ‐ $35m (at share price of $0.60)

• Cash ‐ $4.5m

• Major shareholder ‐ Minotaur Exploration (34%)

Projects

• 11 projects spanning South Australia, Spain and China – EGS, conventional and direct heat

• Flagship project – Paralana

• Exciting growth projects :

• Direct heat, conventional and EGS geothermal projects covering Madrid, Barcelona and the Gran Canaries

• Exclusive government supported exploration agreement in China

Joint Venture Partners

• Beach Petroleum (up to 36% for $30m)

• TRU Energy (up to 30% for $57m)

Business Model

Leverage off core competencies (project identification and proof of concept)

• Use Petratherm’s geothermal expertise and unique Exploration Model to identify economically viable geothermal prospects ready for drilling.

Focus on projects that exhibit all of the necessary ingredients to be commercially viable

• Discussed later in more detail on slide 8.

• Geography ‐ build a manageable international portfolio .

Appropriately diversify

• Gain exposure to countries with comparatively high electricity prices and favourable regimes for renewable energy.

• Technology and market ‐ build a balanced portfolio .

• Conventional geothermal through to hot rocks, as well as hot water (direct use).

Develop partnerships with financially and technically strong industry participants

• Secure the funding and external expertise required to commercialise projects.

• Leverage off partnerships to pursue other opportunities where possible and use experience gained from partners to advance Petratherm along the knowledge curve.

• Recognise that diversifying risk and securing resources can add real value.

Secure free carry arrangements where appropriate

• Assess the balance between the benefits of introducing partners with the value impact of diluting project interests.

• Whilst project ownership/control is not essential at all projects, the intention is to maintain control at several projects in the portfolio.

Why Petratherm is a Standout

Quality portfolio of projects

• High quality resource.

• � � Market focussed (proximity, competitive, product)

• Location/Regulatory Environment.

• Value in Paralana recognised by industry experts.

Value

• � In Petratherm’s view, even more value exists in overseas portfolio (not currently understood by market).

• Value not yet appreciated by the market.

Diversification

• [�] Growing international portfolio covering the entire geothermal spectrum.

Expertise

• Petratherm – geological, renewable energy experience, exploration, project development, commercial

• �

• Beach Petroleum – subsurface, well design, drilling

• TRU Energy – generation, transmission, sales

Flagship project expected to be fully funded

• [�] Paralana expected to be fully funded through to 30MW. Project finance thereafter.

Substantial upside – 100% ownership

• EGS, direct heat and conventional projects in Madrid, Barcelona, Tenerife and Gran Canaria.

• �

• Exclusive exploration agreement in China.

• Further underexplored tenements in Spain.

Endorsement by leading industry participants

�

• Substantial commitments by Beach Petroleum and TRU Energy.

• $50m election commitment from previous Federal Government.

Petratherm’s Achievements

• Petratherm has demonstrated its ability to deliver on its objectives.

• The achievements over the past two years have created the platform for substantial activity and value creation over the coming 12 months.

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Secured
Beach Petroleum Geothermal Spanish media conventional $50m Coalition Positive Madrid $57m TRUenergy
Farm‐In to Project in group acquired geothermal election district heating ‘Farm‐In’ to
Paralana Barcelona stake in project on Gran commitment to pre‐feasibility Paralana
Petratherm Petratherm assessment
Canaria
30 Jan 07 20 Feb 07 28 Feb 07 4 Jun 07 18 Jun 07 20 Jun 07 8 Oct 07 1 Nov 07 20 Nov 07 29 Nov 07 14 May 08 10 Jul 08 4 Aug 08 3 Sep 08
Secured
Paralana Project Exclusive Madrid district
$5m Federal conventional Petratherm Drilling rig
moved to well agreement with heating
Grant Offer for geothermal announced drill secured for
Paralana design & rig project on Chinese Gov. rig plan Feasibility Study Paralana
selection institutions commences
Tenerife
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Project Pipeline / News Flow

• Petratherm has an exciting project pipeline.

• Many key milestones to be achieved over the next 18 months.

• Groundwork at Paralana complete – all systems go.

• Madrid hot water project not far behind.

• Strong news flow.

Strong news flow.
	2009	2010
Paralana
Drilling Paralana 2
Confirm Temperature Paralana 2
Complete Fracture Testing
Order plant
Drilling Paralana 3
Plant Construction
Plant Commissioning
Madrid Hot Water
Final Feasibility Study
Commit to well
Heat Sales Agreement with University & Madrid Gov
Financing Agreement signed for Post drilling capex
Drilling
Construction
Commissioning begins

… Necessary Ingredients

… to successfully take a geothermal project to market

• Permitting

• Land access.

• • Government support and incentives.

• • Carbon trading schemes.

• Support from financially strong JV partner(s).

• • Government funding support.

• Access to market.

• • Above and below ground for various end products. • Proximity.

• • Project management • Price. capability. • Competition.

• • Geological, scientific and • Alternative supply commercial. options.

• Marketing and sales.

• Identification.

• Exploitation.

Paralana Project - Overview

• Has the unique ingredients to be commercially viable at all Stages!

• Temperature and flow rate.

• Very close to market for initial plant

• (7.5MW).

  • Off grid market ~ Heathgate Resources’ Beverley Uranium Mine (10km) and Four Mile.

• Subsurface and above surface expertise .

• Potentially fully funded to initial commercial scale plant.

• Endorsement from major industry participants.

• $5M Federal REDI Grant.

• Ability to scale‐up in commercially viable increments (7.5, 30, 260 and 520 MW) reduces risk!

• Next step is drilling 4 km HEWI wells.

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– Paralana Project Value Considerations

Key Project Parameters

			Petratherm
Parameter		Units	Assumption
Temperature		ºC	200
Depth		km	3.6
Flow		lps	75
Net Output	per well	MW/well	3.8
Total Capex	(for 30MW)	$m	190
Price		$/MWh	125
Capacity ‐ Stage 1 (2011)		MW	7.5
Capacity ‐ Stage 2 (2013)		MW	30

t– Value Con	side	side	side	rati	rati	on	s
Comparison With Other	Companies’			Projects
Key Project Parameters	GDY	PTR	PAX		TEY	GRK	KEN
Market capitalization (A$m @ 4/9/08)	363	34	22		19	14	6
High heat flow (>110 mW/m2)	�	�		�	�	�	�
Intermediate drilling @ heat flow temperature confirmation	�	�		�	�	�	�
Deep drilling (for proof of concept)*	�	�		�	�	�	�
Proof of flow at commercial rates	�	�		�	�	�	�
Local connection (<20km) for initial expansion (>5 MW)	�	�		�	�	�	�
Local connection paying off grid pricing	�	�		�	�	�	�
JV Partners with deep drilling experience	�	�		�	�	�	�
Funding to initial commercial scale	?	�		�	�	�	�

•PTR and PAX have announced they will commence drilling in 2009.

TRU Energy Agreement

• •Note – based on ASX releases and related to primary projects

How Should Paralana Be Valued?

• TRUenergy Farmin (Aug 2008) for up to $57M for 30%

• $3M first well and stimulation.

• $3M second well and stimulation – earns 10%.

• After HEWI, have an Option to earn a further 5% for $7M.

• After 7.5 MW pilot plant ‐ Option to earn a further 15% for $44M.

• The final payment for TRU to acquire 15% implies a value of $293m for Paralana (100%).

  • ~$100m for Petratherm’s share of Paralana (assuming Beach Petroleum also exercises).

  • Petratherm’s share of project costs to this point are fully funded (based on expected capital).

• Given Petratherm also has an advanced direct heating project in Madrid, other exciting direct heating, EGS and conventional geothermal projects in Spain, and an exclusive exploration agreement in China, why is Petratherm’s market capitalization only $35m?

• Plus equity share of project costs at every stage.

– Madrid District Heating Resource

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Recent Well Assessment
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• Three 2000m wells have been drilled, defining an area of at least 50km[2] , around 80[o] C fluid at 200 m[3] /hr at ~ 1500‐2000m depth.

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• Geomadrid Prefeasibility Study indicates – doublets Producing 8MWt with an annual production in excess of 45,000MWh (thermal).

• Strong government support for renewables and energy efficiency (particularly buildings) at all levels of government.

• Potential for multiple projects from the geothermal resource.

• Geomadrid is only the first application.

• Expected to be an economic project with attractive returns!

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Madrid Geothermal Projects

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Geomadrid Economics

Key Project Parameters[(1)]

		Petratherm
Parameter	Units	Assumption
Temperature	ºC	75
Depth	km	2
Flow	m3/hour	200
Annual production	MWh/annum	45,000
Drilling Capex	$€	4.8
Plant Capex	$€	1.8
Transmission Capex	$€	3.1
Total Capex	$€	9.7
Price	€/MWh	45
Capacity (2010)	MW	8
IRR (ungeared/geared)	%	13%/19%(2)

(1) Based on the pre‐feasibility report (by GPC‐IP) and the well assessment report.

• (2) Based on one additional production well.

There is significant potential for further upside in the Geo‐Madrid project through the following opportunities;

• Increased demand with the development of two new building complexes – expanding the annual production and sales to 54,000 MWh from the doublet system;

• Reduction in per MWh reticulation costs with larger demand and no retro‐fitting costs for new buildings;

• Increased sale price per MWh due to the increased cost of alternate heating sources – potential to double sale price of heat output; and

• Potential for energy efficiency subsidies associated with improved energy use in buildings

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AUTONOMOUS UNIVERSITY
CAMPUS
GEOMADRID
WELLS
HOSPITAL COMPLEX
REGIONAL
GOVERMENT
BUILDINGS
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Other Projects

Canary Islands - Tenerife and Gran Canaria

China

• Exclusive exploration agreement with four Chinese government institutions.

• Active volcanic terrain.

• Tenerife & Gran Canaria contain 85% of the energy demand.

• Large market for clean electricity.

• Underexplored.

• Tenerife Population ~ 1 Million; load > 800 MW; Off‐grid – (Diesel & Wind).

• MT data consistent with magma chamber at 3‐4 km below surface.

• Recent analysis by ITER indicates presence of a hydrothermal system with 250‐350 ºC and 30‐40 bars pressure.

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Bottom hole gradient
94 [o] C/Km
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Source: Hu Shengbiao, He Lijuan and Wang Jiyang. 2000.

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Thank You

petra therm

105‐106 Greenhill Rd, Unley, South Australia, 5061 Tel: +61 8 8274 5000 ASX code: PTR www.petratherm.com.au

Paralana Project Joint Venture

� Beach Petroleum Farmin (Jan 2007) for up to $30M for 36%

• $5M first well and stimulation

• $5M second well and stimulation – earns 21%

• After HEWI ‐ Option to earn a further 15% for $20M

• Plus equity share of project costs at every stage

� TRUenergy Farmin (Aug 2008) for up to $57M for 30%

• $3M first well and stimulation

• $3M second well and stimulation – earns 10%

• After HEWI, have an Option to earn a further 5% for $7M

• After 7.5 MW pilot plant ‐ Option to earn a further 15% for $44M

• Plus equity share of project costs at every stage

Beach Petroleum, TRUenergy and Petratherm have complementary sets of skills and represent a formidable collaboration for the Paralana Project

Project Costs and Wind Comparison

• Stage 1 ‐ HEWI model $25M to $30M

• Stage 2 ‐ 7.5 MW pilot plant – add’nl $40M to $45M

• Stage 3 ‐ 30 MW demo. plant –add’nl $125M to $130M

• Total 30 MW Project estimate* around $190M to $200M

• (*total current cost estimates and includes all transmission/substation costs)

• Paralana Project cost per MW of installed capacity is around $6M for a 30 MW base‐load project operating 24/7 – capacity factor of around 95% would produce about 250 GWh annually

• Wind Project cost per MW of installed capacity is around $2M for a project size of greater than 30 MW and typically only operates for 1/3[rd] of the time – capacity factor of 33% and producing around 87 GWh annually

• For a comparable annual output of 250 GWh the wind farm would need to be almost 90 MW (3 times larger than Paralana 30 MW) and hence overall capital costs to produce would very similar at around $180M

• Off grid pricing for Paralana enhances the overall project economics.