Hot Rock Ltd announces investor backing at Koroit’s Hot Rock project

Alexander Richter 30 May 2009

Reported in Australia by The Standard, “Investors have poured AU$2.5 million (US$ 2.0 million) into Koroit’s geothermal power plant to give the project a vital kick-start.

Hot Rock Limited (HRL) yesterday (May 28, 2009) announced it had received firm commitments for the sale of more than 31 million shares at eight cents each to help fund drilling at the Koroit site.

The company halted trading this week in the lead-up to the announcement.

HRL managing director Mark Elliott said the support had been especially pleasing given the challenging market environment.

“The outlook for geothermal energy is strong and the funds raised will enable the company to continue to progress its portfolio of projects towards development,” Mr Elliott said.

The company announced plans for a AU$12 million (US$ 9.5 million) plant in the Willatook-Koroit area in April last year, which should generate enough electricity to power 1250 homes.

The money raised in the share deal will be used to secure a drilling rig, casing and well-head to complete HRL’s first appraisal well in Koroit.

The cash would also go towards “reprocessing seismic and well data to define targets for drilling” as well as “investigation of other geothermal project opportunities”, HRL said.

The company’s appraisal drilling at Koroit will cover a 25,000-hectare area of the Otway Basin.

Advanced exploration will continue at 17 other Otway Basin targets, spanning 2.75 million hectares.

Under the capital-raising project, 8.75 million shares worth $700,000 will be issued to interested parties without shareholder approval.

Issuing the remaining 22.5 million shares (worth $1.8m) is subject to shareholder approval. HRL has proposed that one million of the placement shares be issued to the company’s directors, subject to shareholder approval.”

Source: The Standard