Geodynamics will earn a 70% share of Kentor Gold’s Savo Island geothermal power supply project in the Solomon Islands. A two-stage earn-in and joint operating agreement will see Geodynamics earn an initial 25% share once it has completed a $350,000 study to identify the target locations for a drill program. This stage will also produce an estimate of the geothermal resource and is required to be completed by September 2013.
The company then has the right to earn a subsequent 45% stake through exploration drilling and completion of a feasibility study for the project, totalling expenditure of $4.65 million.
The Savo Island project is about 14km off the north coast of Guadalcanal, where a volcanic based geothermal resource has been discovered. Preliminary exploration indicates the island could host a substantial geothermal reservoir at temperatures of 260 degrees Celsius at depths of between 500 and 1500 metres.
Geodynamics’ managing director Geoff Ward says, “The Savo Island project presents a high quality conventional geothermal development option for us. The preliminary exploration work gives us significant confidence that a high temperature resource can be proven which will be an economically attractive option for Honiara.”
The Solomon Islands’ capital city Honiara has a current maximum demand of 14MW, with the local electricity supply generated by high cost diesel. “The provision of reliable renewable energy will bring many benefits through lower costs to business and consumers and the opportunity to provide access to power to more people,” says Geoff Ward.
Kentor’s managing director Simon Milroy says he is looking forward to building a strong relationship with Geodynamics. “Geodynamics is a leading geothermal exploration company with the resources and expertise to explore and develop this project.”