Geodynamics announces JV with mining firm for direct heat project

Nhulunbuy, Gove, Northern Territories, Australia (source: flickr/ jwbenwell, creative commons)

Alexander Richter 3 Eyl 2012

Announced to the ASX today, Australian Geodynamics Limited (ASX: GDY) reports “it has signed a Heads of Agreement (HoA) with Gulkula Mining Company Pty Ltd (Gulkula Mining) to enter into a Joint Venture (JV) to investigate the potential for a direct heat geothermal project within Geothermal Exploration Permit (GEP) 28310 on the Gove Peninsula, Northern Territory.

Gulkula Mining Company is a wholly owned subsidiary of Gumatj Corporation Ltd which is the commercial arm of the Gumatj clan, who are the traditional owners of land within GEP 28310.

Under the terms of the HoA, Geodynamics and Gulkula Mining will form a 50 / 50 joint venture with Geodynamics as the operator of the JV. The JV will investigate the potential to deliver heat to the Rio Tinto owned Pacific Aluminium alumina refinery, focusing on Gumatj land that is adjacent to the refinery. The use of geothermal generated direct heat would allow Pacific Aluminium to reduce fuel oil consumption and carbon emissions and has potential to deliver improved long term operating cost and enhanced sustainability for the bauxite refinery at Gove.

Initial exploration studies have identified the presence of potentially high heat producing granite formations on the Gove Peninsula that may host a commercially viable large scale direct heat resource. These granites are shallower and lower temperature than the granite formations Geodynamics has been developing at Innamincka in the Cooper Basin, South Australia, but will allow Geodynamics to apply the skills and leverage experience gained from the Company’s Enhanced Geothermal Systems (EGS) geothermal project to this new opportunity.

The exploration work program for the Gove Peninsula Geothermal Project will begin with preliminary surface studies, comprising geological field work and temperature gradient measurements prior to an initial exploration drilling program to assess the viability of geothermal heat supply from within Geothermal Exploration Permit (GEP) 28310 (Gove).

Commenting on the agreement, Geodynamics’ Managing Director and Chief Executive Officer, Mr Geoff Ward today said: “We are delighted to have reached this agreement with Gulkula Mining. This is an excellent opportunity for both Geodynamics and Gulkula Mining to explore the prospect of developing a commercial geothermal project consistent with the aims for sustainable development in the region.”

“This joint venture will combine the strengths of the two companies including Gulkula Mining’s experience in the operation of businesses and community development around Gove and Geodynamics’ expertise in geothermal resource exploration and EGS technology development. We are working together to establish a clear strategy and program that ensures there is alignment between the local community and joint venture from inception.”

Gumatj clan leader and former Australian of the Year, Galarrwuy Yunupingu AM for Gulkula Mining, said: “This agreement is a good example of a new style of relationship between traditional owners and resource companies. Traditional owners no longer seek to just negotiate royalties and rents – we seek partnerships that give us ownership and an interest in every aspect of the business; we want in on the economic world.”

“The supply of affordable energy heat as well as power, is a challenge in remote areas in Australia like Gove that are reliant on imported liquid fuels. We have recognised geothermal energy as a potential sustainable alternative to existing fossil fuel energy sources that can support the long term future for businesses in this region. Geodynamics is at the forefront of geothermal development in Australia and we look forward to a successful partnership.”

Source: Company release via 4-traders