Ann: Indonesian Geothermal Power Development , page-4

It is easy to see why PAX wanted to be a bit more comfortable in its cash position. Besides the general increase in costs at Penola adding Indonesian exploration to the budget will stretch the requirements to six geographic locations. PAX were looking for an Indonesian connection last year and this appears ideal.

PAX is astutely aware of the need to have a systematic thinking partner on the ground such as Herald while at the same time it needs access to local geological information and to Indonesian government leg-ins such as Bumi Resources might provide. Contacts in such countries are 10x more important than here. From very early on PAX can really get its own feet firmly on the ground in a new region without significant cost commitments. Signing an initial HoA still allows considerable flexibility. There are some good parallels between this and the Kyrgyzstan project.

Lake Toba has been regarded as a major tourist spot for generations so that it is a bit surprising that the Dairi Prima Mine, only about 30 km away, is off grid. The real reason for engaging PAX may well be that the mine needs a reliable power supply which contrasts with many areas in Indonesia that have intermittent blackouts and brownouts. The price of energy in Indonesia is rather low but subsidised.

There are different conditions for foreign companies that may want to sell power into the grid, but many regions are so desperately undersupplied that if someone offered power to the grid I am sure they could find ways around the rules.

PAX now has an excellent line of green and brownfield projects in progress. It really needs one of them to start producing power to fund the next. Penola is progressing well.

Juke