Petratherm said drilling data would establish thermal gradients and rock properties at intermediate depths, to confirm the deeper subsurface model that indicates temperatures of over 200C at target depths of 3.5km.

Upon receiving positive results, the company will drill two deep wells to establish the modelled thermal resource.

This information will also be used to study the feasibility of setting up production for large-scale base load electricity generation. Petratherm expects a decision will be made in the second half of this year on whether to proceed to this stage.

“It is probable that heated waters in excess of 100C may be intersected in next phase of drilling, so great care has been undertaken in the well design and safety aspects of the drill program,” the company said.

“On completion, the well will be cased and suspended as a potential seismic observation well during fracture stimulation of the deep heat reservoir, should such be required.”

Phase 1 of the Paralana drill program recorded a geothermal gradient of about 81.5C per kilometre, which Petratherm believes is among the highest reported shallow temperature gradients recorded in Australia.

The well is located 130km from the main grid infrastructure, and 11km from the existing Beverley Uranium Mine.

In addition, Petratherm says a “highly encouraging” temperature gradient of 68C/km was recorded at the phase 1 geothermal drill program at Callabonna last September.

A Magnetotelluric test survey will be undertaken across the potential resource mid-year to map the top of the granite heat engine below the subsurface insulator as an aid for later potential drill testing.

To fund the planned activity, the company successfully placed 5.25 million ordinary shares at A28c each, raising $1.47 million. In addition, Minotaur Exploration has exercised $500,000 of its options in Petratherm.

Petratherm said it was now in a strong cash position with $3.2 million in the bank.