GEL 222 lies east of the other Frome Project leases and is about 80km from the Broken Hill, New South Wales electricity grid.

It covers a narrow trough of Neoproterozoic-age Adelaidean sediments that lie along the faulted western flank of the Benagerie Ridge.

“This sedimentary trough and a large body of non-layered underlying basement, interpreted as granite, is clearly visible on the recently released data for the government-funded seismic traverse,” Geothermal Resources said.

“The occurrence of such a large granite body, some 20m across, lying beneath approximately three kilometres of dense insulating sediments, is a potentially ideal geological setting for development of a hot rock geothermal resource.

“The prospectivity is enhanced by the known, relatively high uranium contents of outcropping granites in the region, which in turn implies an abnormally high heat-generating capacity.”

Geothermal Resources has been awarded a $100,000 PACE (plan for accelerating exploration) grant from the South Australian Government to drill several holes to around 500m to determine the subsurface heat flow across the Frome project area.

This drilling is scheduled to start early in the second half of the year, subject to availability of a sufficiently powerful drilling rig.

Geothermal Resources, a spin-off from miner Havilah Resources, began trading on the ASX yesterday. Its issue price was 25c and it closed at 30c yesterday. The stock opened today at 34.5c and reached 37c by 1pm Sydney time.