Gesto Italia – The Project

Gesto Italia holds 3 concessions: one concession, “Mazzola” is in the vicinity of the Larderello- Travale geothermal field and remaining two concessions, Montenero and Cinigiano, are in the vicinity of the Monte Amiata geothermal field.

Montenero project – 7 MW gross and 5 MW net – is part of a national pilot program to develop ten zero emission binary geothermal power plants who benefit from an accelerated licensing procedure. Montenero project is currently the most advanced and attractive pilot project in Italy being one of the only 6 projects to have secured a feed-in tariff for 25 years under the Registry of the Decree-Law 23rd of June 2016 for non-PV renewables. Among the tariff awarded projects: it is the project with the highest tariff (€210/MWh) when compared to the only 3 projects with tariff, streamlined licensing and location in Tuscany (only region in Italy with proven geothermal exploration) and the only one having received environmental technical approval for both power plant and drilling.

In terms of resource potential and exploration, the extensive research of the neighbouring geothermal fields provides a wealth of data on the underground formations and reservoir characteristics, providing Gesto with key information that is usually not available to projects at a similar stage of development. Detailed resource studies, inclusive of Magnetotellurics (“MT”), seismic and gravity, have been conducted on each of the concessions and Gesto has identified five distinct zones where management believes heat resources exist at drillable depths between 1,800 to 3,000 meters. Based on these findings, the Company estimates that the potential total heat resource of the concessions exceeds 634 MW and has detailed plans for the initial development of up to 35 MW of geothermal power gross capacity on three of the five identified zones.

GeothermEx, a Schlumberger company and leading geothermal analytics firm, has independently reviewed and validated Gesto’s initial research and findings.

Upon review and analysis, GeothermEx has confirmed the following results:

• Shallow temperature gradients in the more favorable zones allow for the presence of temperatures in the range of roughly 150°C to 200°C at drillable depths (less than 3,000 m, and possibly at 1,800 m or less). This temperature range is suitable for power generation using binary-cycle power plants.
• The calculation results indicate that in the temperature range of 150°C to 200°C, a 1,000 m thick reservoir contains sufficient heat to support approximately 3 MW to 6 MW of power generation per km2 of area.

GeothermEx also reviewed various model inputs such as project development costs, plant development costs and O&M costs, which overall, were found to be reasonable and consistent with estimates regarding factors such as number of wells and depth of production and injection wells.

All of the concessions held by Gesto may be considered to be in an advanced stage of exploration; surface exploration is either complete or in final stages of completion, the specific drilling locations have been selected, and deep wells have been already environmentally approved and, in the case of Mazzolla, already received administrative authorization for immediate drilling. In fact, Mazzolla is the only “shovel ready” area for drilling geothermal wells in Italy.