The company said in a statement that it had placed 6.5 million fully paid ordinary shares at 32c each – an 8.6% discount of the average share price over the past 20 days – to clients of investment advisor Taylor Collison.

As well as funding the design work of the Paralana deep well, the funds will be spent contracting associated long lead time drilling resources and materials, and ongoing working capital.

Earlier this month, Petratherm’s quarterly report announced its board had approved Paralana Phase 3, which involves drilling two new 3.6-4km deep wells to establish the expected thermal resource, undertake a circulation test and establish an underground heat exchanger.

Not long after, the company said it may have found a potential customer for the project, after signing a memorandum of understanding with Heathgate Resources – operator of the Beverley uranium mine 11km from Paralana.

If successful, the well would supply electricity to help meet the mine’s growing energy needs.

Background

In August, Petratherm confirmed that its Paralana-1 geothermal test well – now 1.8km deep – had recorded one of the country’s highest hot rock temperatures.

That result paved the way for Petratherm to move to the next stage of the project – drilling two new wells nearby to Paralana-1 but up to twice the depth of the test well, to prove up the expected thermal resource, undertake circulation tests and establish an underground heat exchanger.

Under this trial heat-exchange program, water would be pumped from surface down one of the new wells and circulated through hot rocks at about 3.6km depth. It would then be returned to surface via the second well as superheated water, able to produce steam to drive electricity generators.

The drilling and circulation work would be a precursor to developing an electricity generation plant at Paralana of around 7.5MW capacity to supply local demand – including to potential key customers such as Heathgate or delivering into the State’s main electricity grid infrastructure.