Panax gives more time to Molten to complete financing

Australian-listed Panax Geothermal Limited said it has agreed to a six week extension to the term of the Heads of Agreement, to allow Molten Power Corporation sufficient additional time to complete its required financing arrangements.

Panax said the decision was made after conducting regular discussions with Molten. The company has recently completed a series of meetings and discussions with Molten and its investors in the United Sates.

?While Panax remains sufficiently confident that Molten will be able to provide the required funding for Panax?s portfolio of advanced projects in Indonesia, it is clear that Molten will require some additional time to enable them to fulfill those objectives,? Panax said.

Under the terms of the Head of Agreement which was announced on 8 August 2011, both parties agreed that:

? Within 90 days, Molten will contribute the first $10 million in required exploration and development funding for Panax?s Indonesian projects, in return for which Molten will progressively earn into a 50 percent interest in the issued capital of Panax?s wholly owned subsidiary, Panax Geothermal Singapore.

? Within 90 days, Molten will subscribe for $1 million in equity capital in Panax, on terms consistent with Panax?s recent pro-rata renounceable rights issue capital raising, being at an issue price of two cents per share, with attaching listed options on a one for two basis with a strike price of four cents per share and a three year term;

? The 50 percent interest in Panax Singapore is to be earned progressively by Molten, based on expenditure being undertaken up to the amount of $10 million;

? Following the first $10 million in expenditures being incurred, each of Panax and Molten will then contribute to future costs on a 50-50 basis.

Panax is currently developing the Sokoria Geothermal Project in Ende, on the island of Flores.

A team of about 12 project staff and key consultants are currently on the ground and in nearby areas, undertaking final planning and exploratory studies in and around the project site before drilling commences.

The Sokoria Geothermal Project is a joint venture between Panax and PT Bakrie Power. Panax has a 45 percent interest in the 30 MW project.

Electricity generated from the project will be sold to state utility company PT PLN at a price of US$ 125/MWh, plus carbon credits. (romel)