Adelaide, May 3, 2006 (ABN Newswire) - A decision is expected as soon as mid year on the go-ahead for the first pilot power plant in Australia to use geothermal heat as its fuel source to generate electricity.

Addressing the second day today of the "2006 Paydirt SA Resources @ Energy Investment Conference" being held in Adelaide, hot rocks energy developer, Geodynamics Limited (ASX: GDY), said completion on two remaining key test factors only was required before the pilot plant decision could be determined.

Geodynamics is developing the Habanero geothermal project in GEL 97 and 98 northeast of Moomba in South Australia's far north.

The project plans to circulate water between 4-5 kilometre deep drill holes within hot granites and return the superheated water to surface where the steam is used to drive generators for electricity.

Geodynamics' Managing Director, Mr Bertus de Graff, said the Company expected to know by the end June, the outcome of testwork on:

- the level of friction as water flows between the two test wells, and

- how long the current target granites take to cool down to below sub-economic temperatures as water is circulated continuously between them.

"These are the only two key factors awaiting determination before we are clear to make a decision on proceeding with the first pilot plant in Australia to use hot rocks as a fuel source," Mr de Graaf said.

"Success with the pilot plant will create the environment where decisions can then be made to establish large base load geothermal fuelled power stations of thousands of megawatt hour capacity in the province."

Mr de Graaf said Geodynamics also hoped by mid year to announce its first proven geothermal reserve for Habanero.