Altona Energy has entered into early stage negotiations with a third party to acquire a Petroleum Exploration Licence Application (“PELA”) on a large tenement within a well-known coal bearing basin, the Arckaringa Basin located in South Australia. The tenement is in close proximity to the major national road and rail transport corridor and also close to the Company’s historic Minerals Exploration Licences within the Arckaringa Basin.

The Company has commissioned a preliminary report from mining consultant WSP Australia (WSP”) which states the tenement is sufficiently prospective to warrant further investigations in respect to developing a commercially viable in-situ gasification (“ISG”) project. WSP has also indicated that such a project could form part of a commercially viable and much broader development by the Company, in the form of an ‘Energy Precinct’.

In addition to the chemical and other by-products possible from the ISG process, the Energy Precinct would be designed to produce energy from a variety of sources, including syngas from ISG, as well as a co-located wind and / or solar energy field. South Australia has an energy deficit and there are a number of remote mining operations that would very likely welcome locally produced power at a competitive rate.

The Company will report to shareholders in due course on the outcome of these negotiations, together with an initial cost plan and timeline to establish the presence of coal in at least two areas of the tenement at depths suitable for ISG.

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