Lakes told the market yesterday that Greenearth, in which it holds a 33.3% stake, has signed a memorandum of understanding with the RMIT to develop and evaluate current and new technologies for exploiting geothermal energy resources.

“This landmark decision between Greenearth Energy Ltd and RMIT will also investigate using geothermal resources for the production of electricity, fresh water and direct heating applications,” Lakes said.

RMIT and Greenearth plan to inquire about funding opportunities for the project, including applying for government grants.

Greenearth was formed after the Victorian Government released its first round of geothermal exploration licences for tender last year.

Lakes chairman Robert Annells said previously he has “long been aware” of geothermal activity in the region through petroleum-related activity in the onshore Gippsland Basin.