DAIRI

Panax Geothermal Ltd has entered into a Memorandum of Understanding ("MOU") with PT Dairi Prima Mineral (“Dairi Prima”), a subsidiary of Herald Resources Ltd, allowing for negotiations towards the establishment of a joint venture between Panax and Dairi Prima (or an affiliated joint venture company to be established) to conduct joint exploration and development of identified geothermal prospects in Northern Sumatra for future base-load power supply to their highgrade, zinc/lead, Dairi Prima Mining Project in the area.

Herald Resources has decided to cease port and road construction activities in relation to the Dairi Zinc-Lead Project, North Sumatra, Indonesia, due to the long delays in obtaining foresty approval (Pinjam Pakai) for the Dairi Zinc/Lead Project.

Due to the protracted delay in obtaining foresty approval (Pinjam Pakai) for the Dairi Zinc/Lead project, the Company has decided to cease port and road construction activities associated with the project. This decision has no material impact on the project schedule, which is entirely dependent on receiving forestry approval.