Geothermal Resource at the McGee Mountain Prospect, Humboldt County, Nevada

This report describes the geothermal resource at McGee Mountain, including:
1. Local geology
2. Thermal features
3. Known boreholes and temperature gradients
4. Geophysical surveys
5. Fluid geochemistry and geothermometry
6. Estimate of the heat-in-place

Description of the heat-in-place estimate:
The magnitude of the geothermal resource at McGee Mountain (Painted Hills) has been estimated using a Monte Carlo method applied to estimating heat-in-place. The method relies (along with certain other parameters) on estimates of the area, thickness and average temperature of the resource, but among these, only area has some constraint at this time. Therefore, the estimates used for thickness and temperature have been based on the characteristics of other
geothermal resources in Nevada.

Results yield a 90%-probable ("P90") thermal energy-in-place estimate of 87,300 MWth-years (that is, 90% of estimates are higher). We consider this to be a minimum likely value. At 50% probability ("P50") the estimate is 134,000 MWth-years. The recoverable portion of the preceding estimate of energy-in-place has also been estimated and converted into electrical energy, using values of recovery factor, rejection temperature, utilization factor, plant capacity factor and power plant life that are provided. The minimum (90% probable) estimate for generation potential is about 25 MWe for 30 years (or a total of 750 MWe-years) and at 50% probability the estimate is 52 MWe for 30 years (or a total of 1,560 MWe-years). These estimates are somewhat larger than a public-domain McGee resource estimate made by GeothermEx in 2004, because a 2-m deep temperature survey by Caldera has established continuance of the thermal anomaly about a half mile further north than previously documented.

This resource estimate was made without reference to the Caldera property (project area) boundary, but it is likely that the entire magnitude of estimated resource lies within it. The estimate should be regarded with caution because there needs to be subsequent proof of area, thickness, temperature and commercial permeability by means of deep drilling and testing. No heat-in-place estimate of this type should ever be used to determine the final, installed size of a well field and power plant.