Panax to get $2 million to develop Indonesia?s geothermal projects

Australia-listed firm Panax Geothermal Limited said on Tuesday that its 6 for 10 renounceable pro-rata entitlement offer (?Rights Issue?) closed on 30 June 2011 and the company will be receiving a total of A$2 million before costs of the issue.

In addition to the funding from the Rights Issue, Panax also expects to receive approximately A$1 million in cash within the next month from a combination of the finalisation of the Geothermal Drilling Program Grant and from R and D Tax Rebates.

The proceeds of the equity raising, in conjunction with existing cash reserves, will be used in their entirety to advance Panax?s portfolio of near-term geothermal development opportunities in Indonesia, and for working capital purposes.

Over the past 18 months, Panax has established an Alliance Agreement with PT Bakrie Power (part of the Indonesian Stock Exchange listed PT Bakrie Group) to work co-operatively on geothermal development and production projects in Indonesia.

Panax?s current portfolio of Indonesian geothermal development opportunities has the capacity to produce geothermal electricity in excess of 300 megawatts, with approximately 165 megawatts net to Panax.

The Sokoria, Ngebel and Dairi Prima projects are underpinned by agreed, commercially attractive power tariffs with agreed power offtake agreements. (romel)