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1 ASX Announcement 18 October 2013 Wasabi Energy to Complete Acquisition of 50% of Advanced Geothermal Power Project and Completion of Pre-Feasibility Study for 30 MWe Expansion. Wasabi Energy Limited ABN Level 9, 175 Collins Street Melbourne Vic 3000 Australia Telephone: Facsimile: IMPARATOR ENERJI A WASABI ENERGY GROUP COMPANY Internal pre-feasibility study (PFS) validates Imparator Enerji s plans for large-scale (30 MWe) expansion of the Tuzla Geothermal Power Project (TGPP). Detailed financial modelling of a 30 MWe Kalina Cycle conceptual development at the TGPP, with indicative NPV of $142 million and indicative IRR of 57%, providing strong investment case. Expansion project underpinned by updated resource estimate indicating the most-likely (P50) size of the TGPP geothermal resource is potentially greater than 80 MWe, confirming findings of past studies. The Chairman of Wasabi, Mr John Byrne, commented: The results of the pre-feasibility study underline the Wasabi Group's stated objective of having 25 MW of power production directly attributable to Wasabi either under construction or in operation by 2015 and maintaining that minimum growth at that rate thereafter. Mr Byrne added: The Tuzla project alone has the potential to deliver 18.5 MW towards our primary objective and indications are that our Asian subsidiary can more than provide the balance. The results of the pre-feasibility indicate that 15 MW share of TGPP as envisaged by Wasabi can deliver in excess of $70 million of net present value. As more Kalina Cycle plants come on stream, interest in the technology is expected to continue to grow dramatically. At present, there are three Kalina Cycle plants under construction, two of which are currently being commissioned and are expected to be operational before the end of the year. Overview Wasabi Energy (ASX: WAS, AIM: WAS, OTCQX: WSBLY) is pleased to provide an update on the progress of its wholly owned Turkish subsidiary, Imparator Enerji 1. As first announced in April 2012, Imparator holds an option (the Option ) to acquire up to 50% of the project company that owns the Tuzla Geothermal Power Project (TGPP) in Çanakkale, Turkey. Since acquiring the Option, Imparator has been working with Egenda Enerji, the plant owner and operator on a range of initiatives including plans for an upgrade of the existing plant and future expansion of installed generation capacity at the TGPP. Following a recent upgrade of the geothermal resource at the TGPP (Geologica, July 2013), Imparator recently finalised a comprehensive pre-feasibility study (PFS) based on a 30 MWe Kalina Cycle conceptual development (TGPP-2) at the TGPP. The PFS has been prepared with the support of experienced third parties, most notably Power Engineers, a U.S. based recognised global leader in geothermal power plant design and development. The key findings of the PFS are highly encouraging and support Imparator s development plans for the installation of additional power generation capacity at the TGPP. In addition to the modelled financial performance of TGPP-2, the PFS concluded that, provided the PFS can be advanced to a bankable feasibility study (BFS) by the end of CY2014 (and financial close reached shortly thereafter), first power from TGPP-2 could be realised in the second-half of CY2016, adding significantly to existing project cashflow. To date the Wasabi group has invested in the order of $10 million on the acquisition and development of the project and intends to provide the outstanding acquisition related consideration (~$3.7 million) before the end of the year. Wasabi has been in discussions with several groups interested in investing directly into Imparator Enerji, or Imparator s project company, Imparator-Tuzla 1 and is also evaluating a range of other corporate options to fund the upcoming TGPP Option payment. Following the completion of the PFS and with several funding options at the advanced stages of evaluation, Imparator recently provided formal notice to Egenda Enerji of its intention to finalise the acquisition. 1 - Imparator Enerji Limited Sirketi, and its wholly owned subsidiary, Imparator Tuzla Jeotermal Enerji Uretim A.S. are Turkish companies registered under the Laws of Turkey with offices located at: Levels 5 & 6, Louis Vuitton Orjin Building, 15 Bostan Street Tesvikiye, Nisantası Istanbul Turkey. Wasabi Energy ASX Announcement Page 1

2 30 MWe Expansion Project (TGPP-2) Encouraged by the increased size of the geothermal resource estimate at the TGPP, Imparator increased the scale of its proposed power plant design from the previously flagged 17.5 MWe to a larger 30 MWe design, as part of the recently completed PFS. Imparator s preferred development concept involves integration of 2 x 15 MWe Kalina Cycle units (figure 1), providing significant design, site and operational synergies. In addition, the modular design also provides flexibility with respect to construction schedules as well as optimising project sanction timelines. The power plant development concept outlined in the PFS is Imparator s preferred development concept, however will require approval from a range of parties, including the project JV partner (Egenda Enerji) as well as typical regulatory approvals. Additional information: >> TGPP-2 Planned Development... page 3. Indicative Project Financials As part of the PFS a detailed project financial model was developed, based on installed project cost, the basic geothermal tariff ($0.105/kWh) and a range of assumptions deemed to be appropriate at the time of preparation. In addition to detailed project design and development related information, the key financial outputs of the study indicate the following: EBITDA: $19.6 million (As of the first full year of commercial operation) NPV: $141.6 million IRR: 57.1% Whilst every effort has been made to ensure the accuracy of the PFS, the above numbers are provided on a bestestimate basis and do not represent a financial forecast. For commercial reasons the forecast capital cost of the proposed expansion project (TGPP-2) at this stage will not be publicly disclosed, however the cost has been confirmed to be in the lowest quartile of geothermal projects globally. TGPP-2 Geothermal (30 MWe Kalina Cycle ) R Integrated developement of TGPP-2a & 2b will result in: 30 MWe gross output 25 MWe net output Requiring 16 wells: 9 Production 7 Injection TGPP-2a (15 MWe) TGPP-2b TGPP-2b (15 MWe) Primary Heat Exchanger Air-Cooled Condensers Operating ORC (7.5 MWe) Power Transmission TGPP-2a 4 Inj. Wells 5 Prod. Wells TGPP-1 3 Inj. Wells Greenhouse Heating (not-sanctioned) 4 Prod. Wells Inj. Wells (T15 & T10) Prod. Wells (T9 & T16) Monitoring Wells (T7,T8 & T11) Not to scale. This illustration is a stylised schematic provided for illustrative purposes only. Various modifications and simplifications have been applied to the illustration and as such should not be relied on for any purpose whatsoever. Fig.1 Wasabi Energy ASX Announcement Page 2

3 TGPP Information The existing power plant (TGPP-1) at the project site utilises an organic rankine cycle (ORC) binary power generation technology. Both Egenda Enerji and Imparator are fully committed to utilising the most appropriate technology to develop subsequent stages of the TGPP. As part of an Expert Engineer s Report for the TGPP-2 PFS, leading geothermal experts, Power Engineers indicated that: Based on the engineering work conducted to date, the Kalina Cycle is deemed to be an appropriate power cycle technology for the proposed large-scale TGPP-2 power plant development. 2 TGPP-1: Operating 7.5 MWe Information Operating 7.5 MWe (gross nameplate capacity), aircooled, organic rankine cycle (ORC) binary power plant (figure 2) utilising a pentane working fluid. Due to a combination of design, operational and current brine/steam production constraints the power plant is operating below nameplate capacity. The Tuzla geothermal power plant is designed to extract thermal energy and generate electricity from the geothermal brine produced from two production wells with the cooled brine then reinjected into the reservoir in a closed loop system. The power plant successfully passed acceptance tests and commenced commercial power generation in January Electricity sales under Turkey s feed-in tariff (US$0.105/kWh) system on 1 January On 11 May 2004, the Energy Market Regulatory Authority (EMRA) granted a 40 year power generation license. Engineering studies by Imparator and Egenda Enerji indicate that modifications at the TGPP power plant can be expected to increase annual power generation from current levels to at least nameplate capacity. TGPP-1: Operating 7.5 MWe ORC 3 TGPP-2: Planned 30 MWe Information The thermodynamic modelling for the proposed plant was performed by Recurrent Engineering, Wasabi Energy s Houston based engineering team. Imparator worked closely with Recurrent Engineering, Power Engineers, an established local engineeringprocurement-construction (EPC) contractor and a number of leading suppliers to develop a detailed design and cost estimate for TGPP-2. Imparator is pursuing a best-in-class design and build philosophy where it is working exclusively with contractors and suppliers with an established trackrecord of successful project delivery. The proposed 2 x 15 MWe development concept for TGPP-2 is based on up-scaling a proven Kalina Cycle design (figure 3) to reduce technology related risks. The vast majority (96%) of total project costs for TGPP-2 is supported by vendor quotes from reputable suppliers, therefore there is a high level of confidence in cost estimates. Finally, the installed cost of TGPP-2 as outlined in the PFS, is in the lowest quartile of all new-build geothermal development projects globally. TGPP-2: Planned 30 MWe Kalina Cycle 4 The TGPP-1 geothermal power plant owned and operated by the Tuzla company utilises organic rankine cycle (ORC) technology and has a nameplate capacity of 7.5 MWe. Several opportunities have been identified to upgrade the capacity of the existing plant to maximise generation capacity and provide improved operational performance. The above image is an internal view of the Geothermal CHP Kalina Cycle plant in Unterhaching, Germany, designed and built by Siemens. The proposed TGPP-2 Kalina Cycle power plant shares many design, process and equipment innovations from the Unterhaching plant, with several OEM s providing detailed budgetary proposals based on versions of proven equipment designs from this and other operating geothermal power plants. Fig.2 Fig Expert Engineer s Assessment Notice, Power Engineers, Internal Report, 16 September Image and additional information provided courtesy of Tuzla Jeotermal Enerji A.S., Image courtesy of Geothermie Unterhaching. Wasabi Energy ASX Announcement Page 3

4 TGPP Geothermal Resource Assessment The TGPP resource has been extensively studied since the 1960 s, with the Mineral Research & Exploration General Directorate (MTA) drilling the 814 m deep discovery well in 1982, which proved the presence of a 174 o C resource at 330 m. The presence, distribution and productivity of the TGPP geothermal resource is based on the analysis of an extensive database of technical data including, geological, hydrogeological, geophysical, geochemical and direct well-bore data. Imparator has previously engaged leading geothermal resource experts, Geologica to perform several assessments of the TGPP geothermal resource. The most recent assessment was performed by Geologica in July 2013 and incorporates significant additional information (since the maiden resource assessment in 2011) including recently obtained well data as well as recent well field performance. One of the key findings of the Geologica report, is as follows: Based on the available data and work to date, the geothermal resource at Tuzla is proven as sustainable, commercial grade, and utility scale. Given the available data, the resource would appear to support Imparator s plans to increase installed generation capacity at the TGPP. 5 With respect to the impact of the shallow nature of the geothermal resource on total project costs for TGPP-2, geothermal experts, Power Engineers indicated that: The installed cost of TGPP-2 compares very favourably to the majority of geothermal development projects globally, due to combination of the low-cost operating environment in Turkey and especially the low cost of resource development. 6 Following an extensive pan-european research effort by a range of scientific and research organisations, earlier this year, the European Geothermal Energy Council (EGEC) launched a GIS database mapping the geothermal resources of Europe. The GIS database, highlights the distribution of shallow geothermal resources (generally the most financially attractive to develop) across Europe and indicates that the Çanakkale province in Western Turkey where the TGPP is located, as a highly prospective region (figure 4). The TGPP covers the core area of geothermal resources in the region and the TGPP-1 is the only operating geothermal power plant in Çanakkale. European Geothermal Energy Prospectivity Map (at 1km depth) 7 Menderes, Turkey ~ 400 MWe of operating & committed geothermal projects Çanakkale, Turkey 7.5 MWe - operating >100 MWe - potential TGPP license covers core area of resource Temperature ( o C) Fig A Supplemental Update Report for the TGPP Resource Assessment, Geologica, Internal Report, July Expert Engineer s Assessment Notice, Power Engineers, Internal Report, 16 September Map generated from EGEC GIS database, Aug Wasabi Energy ASX Announcement Page 4

5 IMPARATOR ENERJI A WASABI ENERGY GROUP COMPANY Comment from the Chairman Executive Chairman of Wasabi Energy, Mr. John Byrne commented: Development of renewable power generation projects in Turkey is underpinned by substantial increases in long-term power consumption as the Turkish economy industrialises, as well as Turkey s very high levels of import dependence for energy supplies. With strong market fundamentals, the Turkish geothermal sector continues to experience rapid growth with several large scale projects currently under development, as illustrated by the commissioning of a new 80 MWe project, Kizildere-2 by Zorlu Enerji, in September Finalisation of the pre-feasibility study for TGPP-2 marks an important milestone for our Turkish subsidiary, Imparator Enerji, as it confirms the potential for a near-term, large-scale geothermal development. At the Wasabi level, we have several options for funding Imparator moving forward and are at the advanced stages of evaluating the most appropriate strategy to ensure the long-term success of the company. Together with the project development opportunities being progressed by our subsidiaries in Asia, Africa and Europe, we are building the foundations for a global IPP business based on our core power cycle technology, the Kalina Cycle. Comment from Imparator Enerji Managing Director & CEO of Imparator Enerji and Imparator Green Energy plc, Mr. Bahay Ozcakmak commented: Since first announcing the acquisition of the Tuzla option some 18 months ago, we have been working closely with our partner on several initiatives, including the drilling of a successful geothermal well in September 2012 that enabled the TGPP company to increase the size of the TGPP geothermal production license area significantly, from 12 km 2 to 29 km 2. In an effort to support our plans for increasing generation capacity at the TGPP, together with our strategic partner, San Francisco based Geologica, in July 2013 we updated the TGPP geothermal resource assessment. The revised resource assessment underpins our plans for the proposed 30 MWe expansion of the TGPP, as outlined in our recently completed PFS. We are very encouraged by the PFS results as it confirms our confidence in the TGPP and highlights the near term potential to sanction a utility-scale project with attractive financials. Whilst our focus has been on preparing conceptual development plans for the TGPP and completion of the acquisition, we continue to build our pipeline of project opportunities in both the energy efficiency and geothermal sectors in Turkey. Yours Sincerely, Yours Sincerely, Mr. John Byrne Executive Chairman Wasabi Energy Mr. Bahay Ozcakmak Managing Director & CEO Imparator Enerji For further information contact Enquiries - Australia Mr. John Byrne / Ms. Diane Bettess Wasabi Energy Limited Ph: +61 (0) Media Enquiries - United Kingdom Mr. Josh Royston / Ms. Hilary Millar Newgate Threadneedle Ph: +44 (0) Investor Enquiries - United Kingdom Ms. Ivonne Cantu / Mr. Neil McDonald Cenkos Securities plc Ph: +44 (0) / +44 (0) Imparator Enerji Corporate Information Enquiries Mr. Bahay Ozcakmak Imparator Enerji Ph: +90 (0) turkiye@imparatorenergy.com Wasabi Energy ASX Announcement Page 5