SOUTH MEAGER GEOTHERMAL PROJECT

UNIT 1 - THE GEYSERS

South Meager Geothermal Project

ENVIRONMENTAL AND SOCIO-ECONOMIC

Environmental
The Company has commissioned a number of environmental studies for inclusion in its Application for an Environmental Assessment Certificate. Environmental consultants commissioned to conduct environmental studies include: Ecodomain Consulting, LGL Limited, Geostream Environmental Consulting and Fuller Consulting.

Environmental assessments will be conducted as two separate studies – one for the Meager Creek watershed where the geothermal wells and generating plant will be located and one for the transmission line corridor.

Assessments of the biophysical environment will include:

Socio-economic
A key public concern related to energy development in the Squamish-Lillooet Regional District is the potential visual/aesthetic impact of transmission lines as this relates to both permanent residents and tourists. This applies particularly to views from the Pemberton Valley.

A socio-economic assessment also will consider the potential economic and social impacts of both the construction and operational phases on the Regional District and the Village of Pemberton. Local companies already are being contracted for timber cutting operations, road building and maintenance, wildlife monitoring, site preparation and site reclamation activities. Where feasible, equipment and supplies are being purchased locally.

Lil’Wat Nation
As noted, the project area is within the territorial claim filed by the Lil’Wat Nation. The Company consulted with the Mount Currie Band Council and individual members regarding traditional uses in the area of the resource confirmation program and commisioned an Archaeological Overview Assessment.

The Company proposes to consult further with the Band and the Environmental Assessment Office on requirements for a more detailed archaeological assessment of the both primary plant area and the transmission line corridor; and on the commissioning of an Aboriginal Interest and Use Study.

Creekside Resources Ltd., the Lil’Wat Nation’s development company, and other companies operated by Band members currently are contracted for timber cutting, road building and wildlife monitoring services. It is expected that similar opportunities will be available during the construction and operational phases of the project.

The Company also is commissioning a study of potential spin-off projects such as aquaculture or greenhouse operations utilizing the generating plant’s process steam and hot water. The Company’s objective is to identify a business opportunity for the Lil’Wat Nation and the concept has been discussed with the Band Council.

Project Benefits
Green Energy
As a sustainable “green” source of electrical energy, the South Meager Geothermal Project responds to the United Nations Framework Convention on Climate Change and the associated Kyoto Protocol and supports the related objectives and policies of the Canadian federal government and B.C. Government.

Energy Supplies
In the wake of British Columbia’s changed status to a net importer of electricity, the BC Government has mandated that future generation should come from Independent Power Producers, with up to 50% of that from “green” sources. BC Hydro has stated that capacity must be increased by 1,200 MW over the next decade to meet projected demand. The South Meager Geothermal Project may be capable of supplying 100 MW of green power.

Employment
The Company’s head office currently employs 10 staff. The resource confirmation program has employed 10 persons from the Pemberton area on timber cutting, road building and site preparation. Some 10-20 persons from the Pemberton area have been employed in support roles during the confirmation drilling program. Approximately 55 experienced workers and professional staff from other jurisdictions also were employed on the drill crews and drilling support services and in supervisory or professional roles.

The construction of a geothermal generating plant and associated transmission line, substation and other facilities would employ some 250-350 personnel over a two-year construction period. Once in operation, the geothermal plant and transmission facilities would employ some 30-45 persons full-time and work related to road and transmission route maintenance and similar services would be sub-contracted locally, with employment varying on a seasonal basis.

Expenditures
The capital cost of a 100 MW generating plant and associated facilities is estimated at $341 million over the two-year construction period.

The project will generate substantial payroll and tax revenues. Significant spin-off employment and business opportunities are expected with respect to the purchase of equipment, supplies and services from local and area sources.

Downstream Benefits
Geothermal projects in other jurisdictions have generated significant spin-off opportunities by providing energy for residential and commercial heating systems, greenhouses, land-based fish farms and spas – referred to as “downstream benefits.”

The Company is negotiating with the Centre for Environmental Research in Minerals, Metals and Materials (CERM3) at the University of B.C. on a collaborative research program to determine potential downstream benefits from the South Meager Geothermal Project. Also, as noted, the Company’s objective is to identify a potential business opportunity for the Lil’Wat Nation.

Recreational Development
Outdoor recreational potential in the project area may include hiking and camping, fishing and hunting, skiing, snowmobiling and hot springs facilities. This potential presently is limited by the remote location, difficult access, difficult terrain, lack of infrastructure and facilities and restrictions on entering wildlife habitat.