Panax and Dairi Prima talks

Panax Geothermal Ltd claimed it has entered into a memorandum of understanding with PT Dairi Prima Mineral, a subsidiary of Herald Resources Ltd, allowing for negotiations towards the establishment of a JV to conduct joint exploration and development of identified geothermal prospects in North Sumatra for future base-load power supply to Dairi Prima zinc/lead project.

The electricity requirements for this off-the-grid mine can be met by a power plant with a 20 to 30 MW installed capacity. The area surrounding the Dairi Prima project hosts numerous geothermal prospects associated with Quaternary volcanic centers along the Sumatran transcurrent fault, Panax told ASX this morning.

Under the MoU, Panax will fund a review and pre-feasibility study, of the current target areas that have been identified with a view to the identification and application for suitable tenement areas, prior to the commencement of drilling activities.

Herald Resources is controlled by PT Bumi Resources (BUMI) Tbk, affiliated with Bakrie Group. BUMI spent almost US$600 million to acquire Herald and will spend another US$211 million to develop the Dairi Prima project.

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Herald to resume drilling

Herald Resources (HER), a subsidiary of Bumi Resources (BUMI), plans to resume drilling activities in Lae Jehe, Sinar Pagi, and Buluh Laga prospects in lead-zinc concession controlled by PT Dairi Prima Mineral in North Sumatra this quarter.

Herald, acquired by BUMI for over US$600 million last year, is awaiting forestry approval in order to proceed to full development of the Dairi project. Due to the delay in obtaining forestry approval, the company has ceased port and road construction activities associated with the project.

The Lae Jehe prospect is located about 1.5km north of the main Anjing Hitam orebody. There was a temporary hiatus in drilling and related feasibility studies at Lae Jehe during the March and June quarters of 2009. But Herald told ASX this morning that drilling of the Lae Jehe to Basecamp sector is planned to commence during the 3rd quarter of 2009. 

Herald also said drilling for Buluh Laga prospect is scheduled to commence early in 3rd quarter of 2009.

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China acquires Teck, Herald?

Teck Resources, a top producer of zinc, copper, and metallurgical coal, said last Friday that it will sell a 17.2% stake to China Investment Corp for US$1.5 billion. 

While CIC said that the acquisition is for investment purposes, this is clearly part of China's "go abroad" policy in acquiring resources to support its manufacturing industry. China is currently the largest importer of most metal ores, including zinc and copper. 

Last year, Zhongjin actually teamed up with PT Aneka Tambang (ANTM) Tbk to acquire Herald Resources (HER), Australian-listed company which controls zinc/lead concessions of PT Dairi Prima Mineral in North Sumatra. The consortium lost the battle to Indonesian PT Bumi Resources (BUMI) Tbk.

Herald has suspended ground works in Dairi project due to financial crisis and the fall of commodity prices. Last week, BUMI said it opens for a possible cooperation in developing the project.

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