Geodynamics Limited Stock Market Press Releases and Company Profile
Geodynamics Limited (ASX:GDY) Quarterly Activities Report For The Period Ending 31 March 2010
Geodynamics Limited (ASX:GDY) Quarterly Activities Report For The Period Ending 31 March 2010

Brisbane, May 14, 2010 AEST (ABN Newswire) - Geodynamics Limited (googlechartASX:GDY) is pleased to provide a Quarterly Activities Report for the period ending 31 March 2010.

Innamincka 'Shallows' Joint Venture

On 24 February 2010, Geodynamics announced a Memorandum of Understanding (MoU) with Origin Energy (googlechartASX:ORG) to enter into a JV to explore for shallow geothermal resources on existing JV licence areas in the Eromanga Basin in South Australia.

The MoU is separate to the existing JV between Geodynamics and Origin - previously referred to as the 'Innamincka Joint Venture'. For ease of reference, the Innamincka JV has been renamed the "Innamincka 'Deeps' Joint Venture". This JV retains its original terms - where Geodynamics is operator and the ownership split is 70 percent Geodynamics and 30 percent Origin.

Under the terms of the MoU for the new JV - named the "Innamincka 'Shallows' Joint Venture" - the ownership split is 50 percent Geodynamics and 50 percent Origin. Origin will assume the role of operator.

The 'Shallows' JV will focus on the exploration of shallow HSA systems down to approximately 3,000 m depth, as distinct from the existing 'Deeps' JV with Origin, which focuses on higher temperature EGS in the deeper granites generally below 4,000 m.

The initial exploratory work for the Innamincka 'Shallows' JV includes the drilling and testing of two slim wells to depths of approximately 2,200 m during the next 12 months at a cost of approximately A$10 million. The work is designed to assess the viability of geothermal energy production from HSA in the Eromanga Basin.

A final detailed 'Shallows' JV work program is being drawn up and will be communicated in due course.

Geodynamics is delighted to have reached an agreement with Origin for it to lead the exploration of shallow HSA resources in our South Australian licence areas.

Nappa Merrie, Queensland - EPG 6

Geodynamics was formally issued with Geothermal Exploration Permits over the Nappa Merrie and Tennaperra areas in January 2010. Following this formal issuance, the Company can now move ahead with exploration activities in the area.

The agreed work program with the Queensland Government is for a number of gravity and seismic surveys and four shallow boreholes to measure temperature gradients and infer temperatures in the granite basement at depth.

This program will be undertaken later in 2010 and will be partly funded by the Queensland Government through the previously announced Collaborative Drilling Initiative. Under this initiative, an amount up to A$150,000 will be provided by the Queensland Government on a matched funding basis to assist in the drilling of the shallow temperature measurement boreholes.

Geodynamics will undertake a program of community consultation with the local communities before any work commences.

Hunter Valley, NSW - Bulga EL 5886 and Muswellbrook EL 5560

During the quarter, Geodynamics met with local community groups, directly affected landholders, councils and state government departments to ensure a greater awareness of the Company's proposed activities if results of the initial work are favourable.

As part of the overall planning process for future activities, Geodynamics is scoping an independent seismic risk assessment to be undertaken by the middle of the year. Given the proximity of the exploration to local residents and industrial operations, the Company will independently assess seismic risk and ensure all stakeholders are aware of the outcome.

As the planning for commencement of operations intensifies, the level of community engagement will increase proportionately. The Company is intending to release a website section dedicated to the NSW project shortly.

Renewable Energy Demonstration Program A$90 million grant

In November 2009, Geodynamics was successful in applying for a A$90 million grant from the Federal Government under the REDP. This is the largest grant ever awarded to an Australian renewable energy project and will be used toward the development of the Commercial Demonstration Plant (CDP).

The details of the contractual funding documents are still being negotiated. Components of these documents include technical milestones to qualify for the staged payments and ongoing reporting and compliance obligations to the Federal Government. We are confident of finalising these documents over the coming months.

The Geothermal Drilling Program - A$7 million grant

In December 2009, Geodynamics was also awarded a A$7 million grant from the Federal Government under the GDP. This is a A$50 million program of seven individual grants awarded to geothermal explorers to assist in the exploration and 'proof of concept' for geothermal projects across a number of geographical locations and extraction techniques.

This grant was awarded to support Geodynamics in developing the geothermal resource in the Hunter Valley, NSW. The details of the contractual funding documents are in negotiation and will be based on meeting key technical milestones to qualify for the staged payments.

Milestones include the start of drilling a deep well in the Hunter Valley and at the conclusion of 'Proof of Concept'.

Review of inland flooding at Innamincka

Access to Geodynamics' Cooper Basin worksites was hindered during the March quarter due to the largest flood event on record since 1990. Fortunately, the Company's work sites remained dry throughout the period and no damage was sustained by plant or equipment. However significant access roads and creek crossings were closed for more than eight weeks.

For a short time, access in and out of Innamincka was restricted to dinghy or by small plane landing on the Innamincka airstrip until further rain made the airstrip unusable.

The Company wishes to thank Santos and the residents of Innamincka for regular flood water updates.

Flood risk mitigation planning

During the course of the flooding, Geodynamics has collected a library of satellite and aerial topography mapping. The data is being studied to inform future management and contingency planning, ensuring well locations, pipelines, transmission lines and power stations are constructed to avoid or have minimal exposure to flood risk.

In parallel, the Company is studying roads and airstrips to be certain every practicable step is taken to establish safe, permanent all weather access for all but the most extreme future events.

Innamincka Senior First Aid initiative

Following a medical emergency experienced by an Innamincka resident in late 2009, Geodynamics is initiating the delivery of Senior First Aid Training by St John's Ambulance to all residents who wish to participate. The Company is currently seeking suitable dates for a trainer to travel to Innamincka in June. The community is very receptive to receiving the training. In addition to funding the training, Geodynamics will also purchase a defibrillator and associated supplies and signage for the Innamincka Progress Association. The trainer will provide instruction in the use of this equipment to residents attending the course.

Appointment of Chief Operating Officer

Geodynamics is pleased to announce the appointment of Mr Stuart McDonnell as Chief Operating Officer (COO). Stuart commenced with the Company on 8 March 2010.

In joining Geodynamics, Stuart continues a successful and diverse career working both in Australia and internationally for renewable energy, engineering and resource companies.

Demand for the COO role is driven by the increasing complexity of Geodynamics' operations as the Company focuses on long term delivery of large scale, emission-free base-load power generation.

Stuart joins Geodynamics from Mighty River Power in New Zealand, where he was Manager, Project Development for the last seven years. In that time he successfully developed and constructed a number of substantial geothermal power stations totalling some hundreds of MW.

In his role as COO, Stuart is responsible for the management and coordination of all sub-surface, surface, procurement and project activities.

Change of substantial shareholder

A Notice of Change of Interests in Substantial Shareholders was lodged 25 March 2010. Sunsuper and The Sentient Group (existing substantial shareholders) announced that they had increased their combined stake in the Company from 8.6 percent to 13.8 percent. They purchased the full stake of Mr Robert Healy who previously held 5.2 percent of the Company. Geodynamics is delighted with the increased investment by Sentient and Sunsuper. Their purchase is a clear signal of their confidence in the development of the renewable energy sector in Australia.

We would like to acknowledge Mr Robert Healy's significant contribution to the Company. Mr Healy was instrumental in securing the deposit for the purchase of Rig 100 in early 2007 via a substantial equity placement and we wish him well.

The three cornerstone shareholders of Geodynamics are now:

- 13.8% Sunsuper and Sentient
(joint cornerstone shareholders)

- 10.1% Tata Power

- 6.8% Origin Energy

Geodynamics is fortunate to have a large number of shareholders, both large and small, that support the Company's efforts for bringing a world class resource to market and the Company acknowledges that support.

Our JV partner, Origin, recognises the potential of the Cooper Basin geothermal resource as amongst the best in the world. Origin believes that as we move towards 2020, it is becoming ever more important to focus on the development of renewable technologies like geothermal energy if Australia is to achieve its renewable energy targets.

Capital raising

The Company remains in a sound financial position with enough funds to action the current forward work program.

The A$90 million of funding awarded to Geodynamics by the Federal Government's REDP delivers a significant contribution toward the construction of the CDP. This is the largest government grant received by any Australian renewable energy project and will be paid in instalments on the achievement of milestones between now and the commissioning of the CDP.

As advised at the November 2009 Annual General Meeting (AGM), the Company will seek to raise more equity from shareholders in the coming year to fund the construction of the CDP. Geodynamics will keep the market informed when the details of those arrangements are finalised.

Innamincka 'Deeps' Joint Venture - updated work program

On 13 April 2010 Geodynamics released an announcement regarding its forward work program. Key details are:

- Completion of Jolokia 1 followed by the creation of an underground heat exchanger to demonstrate Geodynamics' ability to create fracture zones across our tenement area.

- Rig 200 is expected to arrive in Australia in October, then commence drilling Habanero 4 in November 2010. It will then move to drill Habanero 5. Geodynamics expects that Rig 200 will demonstrate superior performance to Rig 100 and will assist with reducing the cost of well construction.

- The 1 MW Power Plant is expected to be commissioned by early 2012 and powered by Habanero 4 and 5. In addition to providing electricity for our operations and the Innamincka community, the plant will provide the necessary long-term flow testing information required to make a decision about the viability of the CDP.

- Rig 200 will return to Jolokia in early 2012 to drill Jolokia 2, connecting with Jolokia 1 to create a second doublet. Flow testing will then commence at Jolokia in a closed loop circuit.

- The Company expects to be positioned for final investment decision on the CDP after 12 months successful operation of the Habanero closed loop (incorporating the 1 MW Power Plant) by early 2013.

For the complete Geodynamics Limited Quartlery Report for the period ending 31 March 2010, please refer to the following link:

http://www.abnnewswire.net/media/en/docs/62870-ASX-GDY-220655.pdf

Contact

Gerry Grove-White
Managing Director and CEO
Geodynamics Limited
Tel: +61-7-3721-7500
website: www.geodynamics.com.au



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