PTR MINERALS LTD — Investor Presentation 2009

Feb 4, 2009

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PETRATHERM LIMITED ABN 17 106 806 884

MD presentation to the SA Resources Industry Development Board

Petratherm’s Managing Director, Mr. Terry Kallis presented yesterday to the SA Resources Industry Development Board on the state of the geothermal industry in South Australia.

Key points in the presentation attached are:

• Geothermal energy has the potential to provide large scale, base load and low cost renewable energy.

• Australia has the key ingredients for developing successful EGS projects – high heat producing granites, continent under compression, strong commitment from government and financial markets.

• SA has the best known EGS (hot rock) geothermal resources in Australia with approximately 90% of Australia’s activity focused in South Australia.

• EGS projects face a number of challenges, including but not limited to – drilling, achieving adequate flow rates, power conversion efficiency, cost of delivery to market (proximity) and water issues.

5 February 2009

• Further government support is needed with increased capital funding coupled with increased industry cooperation (R&D, drilling and network connection).

Yours faithfully

ASX Code: PTR

ABN 17 106 806 884

105-106 Greenhill Road Unley SA 5061

T: +61 8 8274 5000 F: +61 8 8272 8141 W: www.petratherm.com.au/ E: admin@petratherm.com.au

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Terry Kallis Managing Director

MEDIA CONTACT:

Terry Kallis Kieran Hall / Tim Hughes

Petratherm Limited 08 8274 5000 Hughes Public Relations 08 8412 4100

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4 February 2009

Presented to: SA Resources Industry Development Board Status of Geothermal Energy in SA

Presented by: Terry Kallis - Managing Director Petratherm Limited

Disclaimer

This presentation has been prepared by Petratherm Limited (Petratherm). The information contained in this presentati on 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 believe that it is not accurate, reliable or complete, it may not have been independently audited or verified by Petratherm . Petratherm.

Any forward-looking statements included in this document involve subjective judgment and analysis and are subject to subject to uncertainties, risks and contingencies, many of which are outside the control of, and maybe unknown to, to, Petratherm. In particular, they speak only as of the date of this document, they assume the success of Petratherm’s Petratherm’s strategies and they are subject to significant regulatory, business, competitive and economic uncertainties 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 this document and does not take responsibility for updating any information or correcting any error or omission which m ay 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”) (“Agents”) disclaim all liability, direct, indirect or consequential (and whether or not arising out of the negligence, default or default or lack of care of Petratherm and/or any of its Agents) for any loss or damage suffered by a Recipient or other 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.

Presentation Outline

• Corporate Overview

• Key Messages

• Global context for renewables/geothermal

• • Overview of Australian Geothermal Energy industry

• • SA geothermal energy sector

• • Challenges for geothermal energy projects

• • Potential solutions

• Progress reports on selected projects

• • Conclusion

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 ‐ $21.5m (at share price of $0.37)

• Cash ‐ $3.3m

• 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)

Key Messages

• Geothermal energy has the potential to provide large scale, base load and low cost renewable energy.

• Australia has the key ingredients for developing successful EGS projects – high heat producing granites, continent under compression, strong commitment from government and financial markets.

• SA has the best known EGS (hot rock) geothermal resources in Australia with approximately 90% of Australia’s activity focused in South Australia.

• EGS projects face a number of challenges, including but not limited to – drilling, achieving adequate flow rates, power conversion efficiency, cost of delivery to market (proximity) and water issues.

• Further government support is needed with increased capital funding coupled with increased industry cooperation (R&D, drilling and network connection).

Global Context for Energy & Renewables (extract PTR Business Plan - December 2007)

• Operating in an uncertain global economy and with more volatile financial markets - European economies expected to slow, Asian economies to continue to grow strongly, Australian economy to remain strong but weakness (recession?) in the US economy.

• Increasing cost of energy/power globally, combination of increased electricity demand , increasing cost of fuel and water, pressure on manufacturers and providers of raw materials (developing and developed countries).

• Global political and social pressure to implement major greenhouse gas reduction and renewable energy programs, Europe underway, Australia about to expand, parts of Asia moving and more expected from the US.

• The above issues will combine to drive toward the need for low cost, large scale (preferably base load) renewable/low emission technology - geothermal, solar, wind and in some countries nuclear and gas.

Drivers - The Promise of Geothermal

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MIT (Tester, et al 2006)

• 100 GWe hot rock power in the USA by 2050

• ~13.7 billion PJ resource to 10 km.

Drivers - The Promise of Geothermal

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Indicative Resource Map Australia’s hot rock energy 150[o] C to 5km ~ 1.2 billion PJ ~20,000 X annual primary energy use in Australia

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

Long Run Costs of Energy Technologies

IGCS = integrated gas combined cycle CCS = carbon capture and storage Total renewable cost envelope SCPF = supercritical pulverized fuel (coal) vs. coal, gas and nuclear cost. NGCC = natural gas combined cycle

MMA Report on Geothermal - Findings

• Geothermal energy expected to build up to 2,200 MWs of baseload capacity by 2020;

• An estimated $12 billion would be invested to develop that capacity;

• Represents up to 40% of the Federal Government’s 2020 Renewable Energy target of 45,000 GWh - the equivalent of the output of around 6,000 MW of wind farms;

• Generation costs are expected to move rapidly down the cost curve from around $120 /MWh at small scale (10 MW to 50 MW) and decreasing to around $80/MWh at large scale (300 MW or greater) by 2020; and

• Most of the capacity is expected to come from developments in SA - other states increasing their contribution toward by 2020

Renewable Energy Policy & Geothermal

• Federal Labor Government Clean Energy Plan to ratify Kyoto, Emissions Trading Scheme, 20% Renewable Energy target by 2020, $485 M Renewable Energy Fund ($50 M drilling initiative fund - 7 projects, demonstration project funding) & $150 M Energy Innovation Fund

• The Australian Geothermal Energy Group (AGEG), 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.

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Australian Geothermal Energy Association

The national industry association for the Australian Geothermal Energy Industry

AGEA’s Vision. Geothermal energy providing the lowest cost emissions-free renewable base load energy to Australian homes and businesses for centuries to come.

AGEA’s Mission . foster and accelerate the development and commercialisation of Australia's geothermal energy resources by:

• Clearly and accurately articulating the advantages of geothermal energy and the progress of the industry;

• Cooperating across the industry to develop, collect, improve and disseminate information about geothermal energy; and

• Developing good and constructive relationships with government, the investment community and the broader

• Australian community.

AGEA’s Work. Increasingly provide both:

• a low cost, emissions free, baseload, reliable and secure supply of energy into the national market over the next decade; and

• a reliable, low cost source of heat to drive energy efficiency and industrial applications.

AGEA works with all Australian Governments, the academic community, relevant scientific organisatons and the media to promote information about the progress of the industry and its capabilities.

AGEA seeks to assist government develop prudent policy mechanisms that enable all forms of emissions free energy to increasingly penetrate the national energy market in line with climate change and energy security policy goals that are in the national interest.

Australian Geothermal Energy Group (AGEG)

AGEG’S VISION: Geothermal resources to provide the lowest cost emissions-free renewable base load and direct use energy for centuries to come.

• Currently 88 members and growing

• Includes all companies with geothermal licences, all Federal, State and NT government agencies with a role in upstream energy policy and investment attraction and 10 Australian universities

Geothermal Industry - Challenges

Cost Drivers

• Temperature

• Drilling Depth

• Flow Rate

• Network Connection

• Generation Plant

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High up front costs – drilling, fraccing, connection, plant

Growth of Australian EGS Industry

Dec 2008 Snapshot

GELS / GELAS Aust. 367 S.A. 273

Expenditure Aust. > $1000 Mill S.A. ~ $ 700 Mill

Geothermal well Exploration licence Exploration licence application Acreage offered for work program bids

• 48 Companies • 10 ASX listed

Geodynamics/Origin/Tata Power/Sentient-SunPower

• �2003-5: Proved flow of geothermal energy with Habanero 1 & 2

• �2007-8: Habanero 1 - 3 closed loop flow tests, Jolokia 1 drilled.

Geothermal Drilling

• �Next: 1 MW demo, Savina 1 and HOTROCK50 project

Petratherm/Beach Petroleum/TRUenergy

• �2005-7: Drilled Yerila and Paralana, deepened Paralana & recorded MT + seismic

• �Next: Petratherm JV to drill deep Paralana well starting in 2Q/09

Green Rock Energy

• �Drilled and Mini-Frac’d – Blanche 1 to 1935 ~~m~~

• �Next: Optimise plans for a deep well.

Geothermal Resources

• �2007-8: drilled 6 Frome area wells up to 500m depth

• �Currently drilling deeper test well

Torrens Energy/AGL

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• �2007-8: drilled 5 of 9 wells in Lake Torrens region

• �Next: Shallow drilling near Torrens Island

Inferus Resources (Southern Gold Ltd)

• �2008: Measured temperatures in minerals hole to 1 Km

• Next: Seismic and shallow drilling

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Eden Energy

• �2007-8: Chowilla 1 in Renmark region

• �Next – Assessing options for a deeper test well

Panax

• �2006 – 3 wells to 500m depth & an MT survey in SE SA

• Bid for Osiris - and raising $20 million

• �Next – Drill a deep test well in 2009

Greenearth

KUTh Energy Ltd

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Growth in Australian Hot Rock Projects

1000

500

- Indicative $200+ M for ONE 40MWe Demo plant.

900

800

700

600 500 400

300

200

100

~ $200 million spent to date

450

400

350 300 250 200 150 100 50

0

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Forecast

• Drivers - Govt. Legislation and Support 1. Geothermal Tenure - SA, Vic, Tas, NSW, QLD, WA ( and NT soon)

• RECS, NGACS, VRECS, Carbon Schemes

• State and Federal Govt. grants ~ $100 Million since 2000

• Geothermal Industry Development Framework – COAG Initiative

• Australian Geothermal Energy Group (AGEG) Australian Geothermal Energy Association (AGEA)

Hot Rock Projects in South Australia – 31 Dec 08

• 28 companies in the hunt in 273 licences on variety of plays covering >125,683 km[2]

• Geodynamics�

• Petratherm �

• Geothermal Resources�

• Green Rock�

• Torrens Energy�

• Eden Energy/Terratherma�

• Panax�

• Pacific Hydro

• Teck Cominco�

• Granite Power

• Gradient Energy

• AGL � (w/Torrens Energy)

• TRUenergy � (w/ Petratherm)

• Tri-Star Energy

• Clean Energy Australasia

• Osiris Energy

• Origin Energy �

• Callabonna

• Deep Energy

• Inferus (Southern Gold�)

• A-B-L-R Joint Venture

• AAA Energy

• Earth Heat

• New World Energy

• Near Surface Geothermal

• Stuart Petroleum �

Sedimentary cover (insulators) over basement

South Australian Heat Flow Anomaly

• Tata Power �(w/ Geodynamics)� Beach Petroleum �

• � ASX Listed �International SX Listed

• A$730 million in work programs (excludes demo & up-scaling for deployment

• Generalised play ingredients: Amagmatic conductive heat source, geothermal reservoir and insulating cover – combining to enable economic

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High Voltage Grid
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Potential mining developments may
be new markets for geothermal
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SA Electricity Market

• SA NEM region electricity demand to require at least 600MW of new capacity

• Does not include potential increase of over 400MW from Olympic Dam.

• Nor the effect of depleting Leigh Creek coal.

• Demand requirements will be between 600 – 1,500MW.

Forecast Supply Demand Balance for South Australia (source SA ESIPC APR 2006)

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2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
4,500
4,000
3,500
3,000
2,500
2,000
SA Supply (Existing Generation) SA Supply (New Capacity)
SA Supply (Via Heywood IC and MurrayLink) SA 10% PoE Demand - DSM + Reserve Requirements
1,500 SA 50% PoE Demand - DSM
1,000
Available MW
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Network Access & Connection

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�
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= Best Wind Resource
therm �
petra
Transmission Data Courtesy of ElectraNet �
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• Transmission Costs

• Transportation losses

• Margin Loss Factor

• System Stability

• Development Approvals, Licensing, Easements and Permits

• Network Capacity at connection point

… Necessary Ingredients

… to successfully take a geothermal project to market

• Permitting

• • Land access. • Government support and incentives.

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• Support from financially strong
JV partner(s).
• Government funding support.
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• Carbon trading schemes.

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• 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.
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• Exploitation.
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Challenges for EGS Projects

• Securing a quality site – the three locations - resource, market, permits/approvals – optimizing economics in a competitive market.

• 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

Transmission Connection - Meshed

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Transmission Connection – Enhanced Meshed

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Paralana 2009 Development Plan

• Second Quarter 09 First Deep Well to ~ 4 Kms

• Well testing and stimulation program

• First Quarter 2010 Second Deep Well

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Heat Exchanger Within Insulator (HEWI) Model

World’s First Commercial EGS Plant Landau Germany

• Opened Oct. 2008

• 155[O] C, 60 l/s

• 3 MWe + heat

• Expanding to 8MWe

• ORC Cycle

• Cost $20 M Euro

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Conclusion

• Geothermal energy has the potential to provide large scale, base load and low cost renewable energy.

• Australia has the key ingredients for developing successful EGS projects – high heat producing granites, continent under compression, strong commitment from government and financial markets.

• SA has the best known EGS (hot rock) geothermal resources in Australia with approximately 90% of Australia’s activity focused in South Australia.

• EGS projects face a number of challenges, including but not limited to – drilling, achieving adequate flow rates, power conversion efficiency, cost of delivery to market (proximity) and water issues.

• Further government support is needed with increased capital funding coupled with increased industry cooperation (R&D, drilling and network connection).

Thank You

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

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