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| Candorado Options Interest in Geothermal Lease #55274, Canoe Hot Springs Geothermal Project in Southeast British Columbia
| | 01/29/08 - Candorado Operating Company Ltd. is pleased to announce that it has acquired the right to earn a 100% interest in the Canoe Hot Springs Geothermal project under permit #55274 based on the following agreement with Comstock Energy Inc. Under the terms of the agreement Candorado will pay Comstock $1 million for a 100% interest in the project and underlying lease and permit. The first payment has been made to the Optionor with additional payments due September 30, 2008 and December 31, 2008.
Rene Bernard, the Company's president states:
"As British Columbia's largest mineral tenure holder, with multiple active exploration projects and an aggressive 2008 drill program, the Company carefully explored the merits of this acquisition. We feel that we can add substantial value to the project by using the same exploration tools, such as geophysical surveys and drilling, we apply to our other mineral exploration properties."
Geothermal energy is the natural heat of the earth and it pervades, to some degree, all of the rocks beneath the planet's surface. Rock temperatures increase in intensity with depth at an average rate of about 25 degrees C per kilometre but, in some areas, very high temperatures are present at the earth's surface. These areas, which are commonly characterized by the presence of volcanoes, geysers and hot springs, may host geothermal resources that can be developed and utilized in a variety of industrial and recreational applications including space and water heating, commodity drying and electrical generation.
Of these applications, the generation of electrical power is the most economically attractive. Geothermal power is a clean and renewable source of energy. It is produced by turbines driven by natural steam or, increasingly, by binary fluids heated by hot geothermal water. Tapping these resources requires drilling into permeable sub-surface regions where hot water trapped in zones of porosity in the earth's crust form geothermal reservoirs.
Candorado has recently acquired rights to a geothermal lease located near the town of Valemount in eastern British Columbia. The lease covers a cluster of hot springs extending for about 750 metres or more along the west side of Canoe Reach, an arm of Kinbasket Lake. The springs issue from alluvial sands and gravels that overlie a fault zone in the rocks at the west side of the Rocky Mountain Trench. The fault zone is interpreted as the region of permeability that allows the hot water to flow to the surface; it may also provide the porosity required to form the geothermal reservoir. The thermal springs range in temperature from 19.4 to 67.2 degrees C and, based on interpretations of the hydrogeochemistry of the water, sub-surface reservoir temperatures have been estimated to range from 170 to 260 degrees C. These temperatures are consistent with use in electrical generation employing binary turbines such as those widely used in the western United States - particularly in Nevada and California.
The Canoe Reach project area is at a preliminary stage of development and a multi-phase exploration program will be needed to identify and confirm the presence of any geothermal resources. This work is expected to include geological and geophysical surveys, exploration drilling and, subject to positive results, production scale drilling and testing.
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