PTR MINERALS LTD — Investor Presentation 2008

Feb 19, 2008

therm petra

Solar Cities Congress 2008, Adelaide, S.A. Geothermal Energy in Australia – an Overview

Presented by: Terry Kallis Managing Director Petratherm Limited 20 February 2008

Presentation Outline

• Geothermal Energy Policy in Australia

• Engineered Geothermal Systems and Energy Cost Comparisons

• Geothermal Energy and Electricity Markets

• South Australian Projects

• Geothermal Energy Project Economics

• Key Challenges for EGS Projects

Renewable Energy Policy & Geothermal

• Federal Labor Government Clean Energy Plan to ratify Kyoto, Emissions Trading by 2010, 20% Renewable Energy target by 2020, $500 M Renewable Energy Fund including a $50 M drilling initiative fund

• The Australian Geothermal Energy Group (AGEG) – South Australian Government initiative, developers/companies, academic/research institutions and government departments federal/state – collaborative work

• The Australian Geothermal Energy Association (AGEA) – developers/companies and service companies – Policy and Advocacy notably to governments.

Engineered or Enhanced Geothermal Systems

==> picture [545 x 409] intentionally omitted <==

Heat Exchanger Within Insulator (HEWI) Model

EGS - engineered geothermal system i.e. underground heat exchanger

• Higher Permeability

• Chemically Stable

• No Potential Radon build up

• Lower Risk

• = Cheaper Power !

==> picture [366 x 358] intentionally omitted <==

Geothermal Energy Cost Comparison

1600 Brown Coal PF 420MW (CF85%) Electricity Supply Industry Planning Council Brown Coal PF 420MW (CF85%) + GS 1400 • 6.8% Australia’s base-load from hot rocks Black Coal PF 420MW (CF85%) Black Coal PF 420MW (CF85%) + GS by 2030 1200 • “significant potential impact” Black Coal Supercritical 860MW (CF85%) Brown Coal Gas Combined Cycle 130MW (CF65%) 1000 Gas Combined Cycle 250MW (CF65%) Black Coal 800 Gas Comb’d Cycle 250MW (CF65%) + GS Black Coal Gas Combined Cycle 400MW (CF60%) 600 Wind 90 MW (CF35%) Geothermal is: Gas Geothermal 550 MW (CF70%) 400 • Nuclear CANDU 6 1450 MW (CF 85%) CHEAP • Brown Coal + CO2 capture LARGE SCALE Black Coal + CO2 capture 200 • BASE LOAD Gas + CO2 capture Geothermal Wind 0 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 AUS Generation Cost AUS$/MWhr

Geothermal Energy and Electricity Markets

Australia

• Australia has the ideal conditions for EGS – high heat producing granites and a continent that is under compression

• Geothermal Energy potential is vast and could meet Australia’s electricity needs for many centuries. The Paralana thermal resource potential alone is estimated at 13,000 MW

• ESAA estimates that 8% (around 3500 MW) of national demand could be met by 2030. Geothermal Energy Industry formulating a bold, yet realistic Vision with objectives for 2010, 2020 and 2030.

• The interconnected NEM in Australia is projected to require 5,000 MW of new capacity over the next 10 years (source: NEMMCO Statement of Opportunities).

SA Geothermal Projects

• Many players – 33 Companies, 10 ASX listed

• 277 GELs mostly in SA – PACE grants

• Very large resources

• Exploiting different geothermal resources mainly Hot Rock but also “Hot Water”

• Potential Hybrid solutions - Solar

==> picture [442 x 463] intentionally omitted <==

----- Start of picture text -----

South Australian heat flow
anomaly
Pacific Hydro
Habanero 1,2
Geodynamics
Eden
Eden
Geodynamics Osiris
Proactive
Eden
Petratherm Yerila 1
Proactive
Petratherm
Blanche 1
Green Rock Eden
Paralana 1B
Proactive
Torrens
Regional power grid
Geothermal
Green Rock
Eden
Torrens
200 km Petratherm
Geothermal
Heat Flow 1,3,4 Osiris
Sedimentary basin (thermal blanket) Scopenergy
----- End of picture text -----

Geothermal Energy Project Economics

• Temperature (differential, quality and type of resource) • Drilling Costs (depth, size, geological formation, availability) • Energy Flow Rates (volume, pressure, energy transfer) • Plant Capital Costs and related efficiencies • Connection and Access to markets • Operating Costs

• Economies of Scale/Production

• Revenue/Product Pricing in a Competitive Market • Regulatory Regime – carbon pricing

• Critical Project Parameters are Revenue (grid/off grid & carbon prices), Capital Costs (drilling, plant, connection) and Thermal Resource (temperature differential, volume and flow)

Network Access & Connection

==> picture [591 x 375] intentionally omitted <==

----- Start of picture text -----

�
�
�
�
�
�
� [= Wind Farm]
�
= Best Wind Resource
therm �
petra
Transmission Data Courtesy of ElectraNet �
----- End of picture text -----

• Transmission Costs

• Transportation losses

• Margin Loss Factor

• System Stability

• Development Approvals, Licensing, Easements and Permits

• Network Capacity at connection point

Challenges for EGS Projects

• Securing a quality site – the three locations – resource, market, permits – optimizing economics in a competitive market – primary project risk reduction

• Confirming the quality of the potential resource – temperature differential, stress regime / permeability.

• Deep drilling of wells – well design, drilling rig availability and costs.

• Establishing long-term circulation between injection and production wells - permeability, fracturing, flow rate.

• Integration of above-ground generation plant with below-ground thermal resource, achieving reliable power plant output – then followed by up scaling of generation capacity.

• Electrical connection (transmission) to the National Electricity Market.

• Water quality, usage, net losses, rights, obligations, accessibility, environmental impacts – short and long term – small and large scale.

Thank You

petra therm ASX Code: PTR www.petratherm.com.au Phone: (08) 8274 5000

==> picture [360 x 473] intentionally omitted <==

Corporate Overview

• Established in 2003 and listed on the ASX in July 2004

• Major shareholder is Minotaur Exploration – 34%

• Around 2600 shareholders

• Shares on Issue - 57,850,000 – Current Price of $ 0.88

• Market Capitalization of $ 50.9 million

• $6.1 M in cash as at end Dec. 2007, $5M grant and up to $ 30 M JV with Beach Petroleum

• “

• • Mission – to explore and develop, emission free, geothermal energy projects that are commercially sustainable ” “ ” –

• • Strategy – shallow hot rocks close to market deeply buried granites (5-6 kms) with good insulating cover (2-3 kms)”

Corporate Overview

• Combined skills and experience of the Board, Management, Partners and Consultants capable of delivering successful geothermal energy projects – from underground resource through to market

• Portfolio of Quality Projects – four in Australia, five in Spain, China under examination – portfolio under expansion – expect 7 to 8 projects in Spain

• Projects include Engineered Geothermal Systems (EGS) and Conventional Projects – products include electricity and direct use heat

• Focus on continually increasing Shareholder Value through a combination of and revenue cost reduction, risk reduction

• optimization

Petratherm’s Exploration Model “Shallow Hot Rocks close to Market"

“Hot Rocks” are EGS , i.e. Engineered Geothermal Systems Prime Cost Drivers

• Temperature Differential

• Drilling Depth

• Flow Rate

• Network Connection

• Generation Plant

==> picture [219 x 256] intentionally omitted <==

Petratherm is seeking to optimize the key drivers to achieve the lowest long run average cost electricity delivered while minimizing project risks.

Heat Exchanger Within Insulator (HEWI) Model

EGS - engineered geothermal system i.e. underground heat exchanger

• Higher Permeability

• Chemically Stable

• No Potential Radon build up

• Lower Risk

• = Cheaper Power !

==> picture [366 x 358] intentionally omitted <==

Petratherm’s SA Projects

==> picture [415 x 444] intentionally omitted <==

Paralana Geothermal Energy JV Project Paralana Key Features

– Excellent thermal resource at shallow depths with stable geological formation - expect good drilling conditions – Close proximity to the “off-grid” Beverley Uranium Mine – $30 M JV with Beach Petroleum and $5 M Federal Grant – A unique and realistic, long term commercialization plan Paralana Recent Matters

• Seismic study & Magneto-telluric survey completed – results pending analysis and interpretation

– Number of well design scenarios and related rig options assessed – for various drill depths and well outputs (MW) – Assessed by previous Federal Government as most commercially advanced geothermal project – election commitment for LETDF grant funds for 30 MW demonstration plant ($50 M)

Petratherm’s Spanish Projects

==> picture [636 x 441] intentionally omitted <==

----- Start of picture text -----

Barcelona
Almazan
Madrid
Tenerife
Islands
Gran Canaria
----- End of picture text -----

==> picture [720 x 540] intentionally omitted <==

----- Start of picture text -----

China – APP Program
Heat Flow Map of China
Source: Hu Shengbiao, He Lijuan and Wang Jiyang. 2000.
----- End of picture text -----

Increasing Shareholder Value

• Cost Reduction

• HEWI Model - shallower wells reducing drilling costs

• Competitive sourcing of plant and equipment – “no ties” to a plant manufacturer – “ fit for purpose” – conventional, lower cost plant

• Risk Reduction

• Initial project selection – targeting lowest cost to relevant market

• – HEWI Model – shallower wells, less drilling, greater permeability

• – Several quality projects and a continuous pipeline of projects

• Project portfolio spread across jurisdictions – local and overseas

• – Partner selection – key skills and capabilities – Beach Petroleum

• – EGS and lower risk conventional geothermal projects

• Revenue Optimization

• Target local “off grid” opportunities – nearby mines

• Exploit multiple products – electricity and direct use heat

• Focus on attractive jurisdictions price and growth – Spain/China