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Home My WebLink AboutWillow Stick- Manley Hot Springs 2009MANLEY HOT SPRINGS Willowstick Geophysical Investigation Final Report Vat KoOFoeD, P.E. PRESIDENT laa WwW i | | OW st i C k 11814 Election Rd. Suite 100 Draper, UT 84020 Tet 801.984.9852 cei 801.641.4996 Fax 801.984.9851 vkofoed@willowstick.com Martina Dabo Program Manager Village Power Group TDX Power, Inc. 4300 “B” Street, Suite 402 Anchorage, AK 99503 Office: (907) 762-8473 Fax: (907) 562-0387 Cell: (907) 350-7532 E-mail: mdabo@tdxpower.com www.tdxpower.com “Generating Power Solutions” mays Power MANLEY HOT SPRINGS WILLOWSTICK GEOPHYSICAL INVESTIGATION Of: MANLEY HOT SPRINGS GEOTHERMAL RESOURCE Manley Hot Springs, Alaska For: TK) owes LS} TDX Power, Inc. 4300 B Street, Suite 402 Anchorage, Alaska 99503 Contact Representative: Roger L. Bowers, P.G. Geological Consulting Services 1305 Bell Avenue Ely, Nevada 89301-2094 Prepared by: ee willowstick Willowstick Technologies, LLC 11814 S. Election Road Suite 100 Draper, Utah 84020 USA (801) 984-9850 Willowstick Project Number: 09091 Report Date: December 30", 2009 Manley Hot Springs TABLE OF CONTENTS i. Executive SUMMary ........ccccecceeccesescesesesscsseecscseescssescseseesesecsescsesscsesesecseescsecsssesseseeeeseeeeees 4 1.0) [mtroduction.....c ccc ccesscecscesscscsecscsecsesscsesecsesenscsecscseecsesscsesecseessesesssseeseseesesessesaseesees 6 1.1 General : 1.2 Background ....c.cccccccecsscsesesescsescseesescscseseseenssscsesescsescsesessescscscsesesesesesescsceeseseeeeseseseaees 6 1.3 Purpose of Investigation ..........cccccesesesessesesescseseeseecsesesescseseseecscscsesssesesescseaeseseseseeeeeees 7 2.0 Approach to the Work... ccc cecseescsecsesecsceescsesecsesecsesecsesesesecsesscseecsesessesseseaceeseeeesees 8 231 Work Plan oo... esseesesessescssssssssesessscscssscssscscssscsssssssseseseesssssssesesesssssssssseseseesssssessseseseaeees 8 2.2. AeroMag Investigation .. 9 2.3 RaMPS Investigation ..... 9 3.0 | AeroMagnetic Survey........ 9 3.1 General ..........ccee id 3.2 AeroMag Results we. ees eeseneeeteeseteeseneee . 10 3.3 AeroMag Data Inversion Model and Interpretation... cceeeseeeeeseseeseeeeseeeeeeseeeeee 13 4.0 RaMPS Survey ....c.ccccesccsessesscsesscscssescsesscsesseseescsessescsesscsesscsessesesscsesscseecsesessessesessesenseeseees 14 4.1 GST a rac gn ws ov cn nav sca ones supers gues ceve vo seesavenequs edvecgns as enes pscfeevgetecusesguctsderssnnresen-cveduevere 14 4.2 RaMPS Data Results and Interpretation 0.0.0... ececceeeeeeeeeeseseseseseeeteeeeseecsesesenseseetaeseaesees 15 5.0 Summary of Investigation and Recommendations 00.0.0... cece eeseeeceeeeeeeeeeseeeeseneeaeeees 18 5.1 SUMMA 20 R OSU tS Farccsesescacssnenssestecestncsocsaesteneseensoneusesonensduceonercocdueeesbeossuseieesesstseesesoaen 18 5.2 Recommendations .........c.cccccccscecessssseesesescsesesessescscsescscsesesesesescscscseseseecsescseseeseeseseeeaeaes 19 6.0 Disclaimer... ccc eescsesesessescsecscsesscsesscsesscsesscsesesscsesscsesscsessesesessesecsesecseseesesessesecessaeees 20 6.1 (GOTT AL eae cctv ans ncasnc onsnese teens on svagae 0st ou asa0snteanss’ned aqeotequdaveaucsasatetconsateysevsestssscsststsescsancacand 20 Appendix A — Helicopter Aeromagnetic Survey Report .......cccccceccesesecseseesessceseeesseseeecseeeees 21 Appendix B — White paper (RaMPS Technology Explained) 0... cece ececeeeecseeseseeseseeeeeeeees 43 Appendix C— Professional Biographies sivsscscscesssassssrescesusstesesiesssnonctsnsecosesetesescosteosseotstensieussesetoes 56 Manley Hot Springs FIGURES Figure 1 — Project Location Figure 2 — Site Map and Area of Investigation Figure 3 — Reduced-to-Pole (RTP) Magnetic Intensity Map Figure 4 — Close-Up Map of Anomalous Zone Figure 5 — 3D Inversion Model with Low Magnetic Susceptibility Anomaly Figure 6 — Layout of RaMPS Survey Lines Figure 7 — Line B Resistivity Pseudosection and Location Map Figure 8 — RaMPS Data Slice showing Apparent Resistivity Contrast Figure 9 — Proposed Drilling Targets A and B Manley Hot Springs iF EXECUTIVE SUMMARY This report presents the results of an AeroMag investigation and a Willowstick® Resistivity Monopole Profiling and Sounding (RaMPS) survey to help characterize the extent and depth of the Manley Hot Springs geothermal resource. The AeroMag data, acquired by EDCON-PRJ, Inc. was provided to Willowstick by TDX and was utilized to help plan and lay out the RaMPS survey lines. The integrated analysis of both the AeroMag and RaMPS data provided valuable insight in characterizing the geothermal resource and adjacent structures. Both datasets indicate that the source of hot water lies deep in an area southwest of the known hot springs, and that it wells up to a shallow aquifer as it makes its way toward the known surface expressions. The RaMPS data define a sharp contact between high and low resistivity zones along the northwest boundary of the geothermal resource, thereby marking the most likely location for hot water, which is adjacent to the contact zone. Accurate delineation of the resource itself, given the RaMPS data alone, is somewhat obscured due to difficulties encountered in achieving penetration on lines running near and along Hot Springs Slough. In conjunction with the AeroMag data, however, the resource can be characterized more accurately. To interpret the AeroMag information, Willowstick subjected the data to a rigorous and powerful inversion algorithm designed to provide accurate depths to anomalous sources. The resulting model of anomalous magnetic susceptibilities revealed a strong magnetic low anomaly originating from depths greater than 1,000 feet in an area southwest of the known hot springs. This anomaly is believed to represent the zone of hydrothermal alteration where the hot water has altered the magnetite mineral in the rock. Moving from the deep resource toward the hot springs to the northeast, the alteration zone rises to depths within 600 feet. A little further to the northeast—approximately 1,000 feet before reaching the surface expressions—the anomaly terminates abruptly, signifying that the hot water has risen and cooled to the point that it no longer alters the magnetite mineral in the rock. Based on careful analysis of the AeroMag and the RaMPS data, Willowstick has located two proposed drilling targets, labeled A and B, to intercept hot water in the geothermal resource before it cools (see Figure i). Manley Hot Springs Approximate delineation of structure bounding the geothermal resource Legend ©& Hot Springs — — Warm Ground Flight Lines Manley Hot Springs 1.0 INTRODUCTION 1.1 General This report presents the results of an AeroMagnetic Survey and a Resistivity Mono-pole Profiling and Sounding (RaMPS) geophysical investigation of the Manley Hot Springs geothermal resource. The purpose for the investigation is to help identify drilling targets wherein the geothermal resource can be proven and possibly developed into a low-cost renewable electrical energy resource for the community of Manley Hot Springs, located in central Alaska (see Figure A). For full sized versions of figures in this report, refer to the Figures Section. g ” Manley Hot Springs ze Figure A — Manley Hot Springs, Alaska Location Map 1.2 Background Manley Hot Springs is located about 145 km northwest of Fairbanks and 71 km east of the village of Tanana on the Yukon River. State Highway 2, known as the Elliott Highway, connects Manley Hot Springs with Eureka, Livengood and Fairbanks along a 260-km road. Manley Hot Springs lies at the base of the Manley Hot Springs Dome—a local elevated area also known as Bean Ridge—adjacent and parallel to the Tanana River Valley (see Figure B). Manley Hot Springs Figure B— Manley Hot Springs Area Map The first non-Indian settlement at Manley Hot Springs was established in 1881 as a trading post. The trading post eventually transitioned into supporting mining activities as a result of the discovery of gold in the area in 1898. Historically, the geothermal resource—around which the community was built—provides water for drinking, bathing, irrigation and heat (i.e., homes, barns and green houses). Today, the community consists mainly of a few homes and small businesses with various recreational outdoor opportunities (fishing, hunting, dog sledding, etc.). A diesel generator provides electrical energy for the community. Because of the community’s remote location, very little is known about the Manley Hot Springs geothermal resource with the exception of that observed within a few meters of the ground’s surface. 1.3 Purpose of Investigation Because of global environmental standards, cost of electrical energy produced from traditional fossil fuels, and the mounting desire for green power, the geothermal industry is experiencing enormous growth, especially given that new technologies can utilize low-temperature geothermal water to generate economical electric power. As a result, TDX Power, Inc. (TDX), a leading energy generation and service provider for the State of Alaska has expressed an interest in possibly developing the geothermal resource into a small, low-cost renewable electrical energy supply for the community of Manley Hot Springs. TDX contracted Willowstick Technologies, LLC (Willowstick) to help identify drilling targets from which the geothermal resource can be proven and possibly developed. Manley Hot Springs 2.0 _APPROACH TO THE WORK 2.1 + Work Plan Due to the size of the study area, budget constraints, and the need to accurately and cost- effectively evaluate the geothermal resource, a two-phased approach was employed to characterize the geothermal resource. The two-phased approach consisted of: (1) an aeromagnetic survey (hereafter referred to as AeroMag); and (2) a resistivity mono-pole profiling and sounding (or RaMPS) survey. The AeroMag investigation was targeted to provide a general reconnaissance of the geothermal resource and surrounding study area (see Figure C). The RaMPS survey was designed to be more site-specific and was targeted for smaller areas that warranted additional investigation after having performed the AeroMag survey. Manley Hot Springs Study Area Figure C- “Manley Hot Springs Study Area The two phases of fieldwork required the services of two companies who specialize in different types of geophysical investigations. EDCON-PRJ, Inc. (EDCON) was contracted to perform the 8 Manley Hot Springs AeroMag survey (Phase 1 work), and Willowstick Technologies, LLC (Willowstick) completed the RaMPS survey (Phase 2 work). 2.2 AeroMag Investigation The purpose for the AeroMag survey is to map local changes in earth’s natural magnetic field over the Manley Hot Springs study area, revealing the magnetic susceptibility of the subsurface rocks—a property that indicates the amount of magnetically susceptible minerals (primarily magnetite) in the rock. This geophysical survey methodology has been used for many years in characterizing subsurface geologic structure and areas of active geothermal activity. Hot geothermal fluids can cause a gradual decomposition of magnetite through a process called hydrothermal alteration, causing anomalous lows in local magnetic field measurements. The least expensive and quickest way to acquire the necessary AeroMag data (in this case over the Manley Hot Springs study area) was to perform the survey via airborne platform flying at low speeds and low altitudes while measuring the magnetic field intensities. Appendix A contains EDCON’s report on acquisition of the Aeromagnetic Survey. The interpretation of the AeroMag data itself, including an inversion model, is covered in this report. 2.3 RaMPS Investigation The purpose for the RaMPS investigation is to evaluate the geothermal resource from a different perspective by identifying the contrast in subsurface electrical properties which can be used to characterize the geothermal resource. Resistivity measurements in general are very sensitive to geothermal activity because the high-temperature water increases the electrical conductivity of the rock and soil through which it permeates. Careful interpretation and comparison of the RaMPS data along with the AeroMag data is recommended to help identify drilling targets from which the resource can be proven. A test well should be drilled into the main flow of geothermal water as it flows up from depth in order to fully determine its maximum temperature and production flow rate. Because the RaMPS data acquisition is more labor intensive than the AeroMag survey and because it involves access issues, the RaMPS survey was applied only to specific areas of interest—identified based on the AeroMag investigation—to obtain additional information about the subsurface resource. 3.0 _AEROMAGNETIC SURVEY 3.1 General During the period of July 18" through July 24", 2009, EDCON completed their contracted Helicopter Aeromagnetic Survey over the Manley Hot Springs geothermal study area (Phase 1 work). Figure D shows the survey coverage area and flight paths employed for the investigation. Manley Hot Springs | Aero-Mag Survey Area Vf, m and Flight Lines NJ \\ Figure D — AeroMag Coverage and Flight Path Grid Layout Northwest-southeast primary survey lines were spaced at 100-meter intervals. Northeast- southwest tie-lines were spaced at 500-meter intervals. A modified drape program was flown with a nominal helicopter terrain clearance of 150 meters above ground level. This resulted in a nominal magnetometer sensor height above the ground of approximately 125 meters. Roughly 500 line-km total were flown to insure good data coverage of the study area. 3.2 AeroMag Results Figure E presents the results of the AeroMag survey. The data have been processed by a correction method called reducing-to-the-pole (RTP), which simplifies interpretation by eliminating distortion due to the tilt of earth’s magnetic field. 10 Manley Hot Springs a gor a } Figure E — Magnetic Intensity Map In this map, the purple shading represents magnetic intensity highs while the dark blue shading represents magnetic intensity lows. Keep in mind that these data were acquired over a large area to enhance the general picture or understanding of the geologic structure around the Manley Hot Springs area. The coverage and quality of the data are very good and show some highly interesting features. The magnetometer used in the investigation is extremely sensitive and can detect small changes in the distribution of magnetic minerals in the subsurface rocks. Magnetic highs indicate a 11 Manley Hot Springs greater amount of magnetic minerals, while the lows indicate a lesser amount of magnetic minerals in the subsurface. At geothermal sites, magnetic low anomalies can be an indicator of magnetite destruction through alteration by hydrothermal fluids. The AeroMag data (Figure E) clearly highlight the transition from the Tanana River Valley sediments to the Manley Hot Springs Dome comprised of igneous intrusive material. This contact zone is marked by the steepest gradient (yellow shading is a good indicator) in the contoured AeroMag data. This geologic contact feature may also include a fault. In most cases, igneous rocks contain more magnetite than sedimentary rocks, but note that the opposite is true here based on the AeroMag data. The river valley sediments to the southeast have a higher magnetite content than the igneous rocks comprising the Manley Hot Springs Dome to the northwest. A major magnetic low (shaded dark blue) is located southwest of the Manley Hot Springs area. Because this anomaly is much lower even than the signature of the granitic pluton, it is a suspected indicator of hydrothermal activity that has altered the minerals and decomposed the magnetite beneath this area. At the northeast terminus of this magnetic low, a protruding portion of the high magnetic susceptibility material abruptly cuts off the low anomaly. Figure F shows a close-up view. Legend & — springs rm warm ground UJ es 2 Figure F — Close-up of Northeast Terminus of Anomalous Zone The data suggest that a source of geothermal water probably originates southwest of the surface expressions. Looking at the magnetic field map, however, it is difficult to determine with any degree of certainty the depth of the anomaly related to the geothermal resource. For this reason, 12 wAaVy LAL Opi igs Willowstick created an inversion model of the RTP AeroMag data to estimate the resource’s depth. The model area is outlined (black dashed line) in Figure F. 3.3. AeroMag Data Inversion Model and interpretation The AeroMag data and magnetic intensity map were submitted to TDX in early August 2009 by EDCON. This information was then forwarded to Willowstick for further analysis and modeling. Willowstick analyzed the AeroMag data and subjected it to a rigorous inversion algorithm (mathematical model) designed to predict the magnetic susceptibility in a three- dimensional space based on the magnetic field measurements. The inversion algorithm used in this case is capable of providing an accurate recovery of depth of anomalous sources. For the purpose of inversion, the subsurface model space was represented by a mesh of 44,198 prismatic cells—each having a magnetic susceptibility value predicted by the inversion program. Figure G presents a snap-shot picture of the 3D inversion results. . AK = -0.005 St units | vertical exaggeration: 2:1 ~ Is ility contrast 0.005 magnetic susceptibility constrast (SI units) Figure G — 3D Inversion Model with Low Magnetic Susceptibility Anomaly The inversion model reveals some important information. It is believed that the low magnetic susceptibility characterizes a deep source of geothermal water, southwest of the hot springs. Coming from the southwest, the resource is 1000-1500 ft deep near the edge of the model, and 13 Manley Hot Springs then it quickly rises to <600 ft and in some places comes very near to the surface directly beneath Hot Springs Slough. At the northeast terminus of the anomaly, just below Hot Springs Slough and the runway’s northeast end, the hot water is believed to cool after it ascends from depth up to a shallow, cold aquifer. It is theorized that as the hot water flows from depth it cools to the point where it does not alter the magnetite mineral in the rock and soils near the surface. This would explain why the low-magnetic-susceptibility anomaly fades out before reaching the surface. This interpretation suggests that a deep source of geothermal water occurs entirely southwest of the surface hot springs. 4.0 RAMPS SURVEY 4.1 General The RaMPS methodology, although similar to traditional resistivity methodologies, utilizes a unique data acquisition procedure to construct accurate depth sounding curves for predetermined sounding center points, which are strategically located throughout the area of interest. These curves help to generate a picture of subsurface structure, such as horizontal interfaces between lithologic units. At the same time, the RaMPS acquisition procedure provides accurate lateral profiling information for detecting vertically oriented structure such as faults. All the information gathered from the RaMPS survey process is ultimately combined using a proprietary plotting technique to create a subsurface 3D volume of apparent resistivities that accurately reflect changes in the subsurface associated with contrasts in electrical properties. The RaMPS fieldwork was not initiated until after the AeroMag survey (Phase 1 work) was complete and modeled. Subject to areas of viable access, the RaMPS survey layout was based partially on the findings of the AeroMag data. The RaMPS investigation consisted of five survey lines totaling about 10,000 meters (see Figure H). The five lines, marked A through E, cover the area around the hot springs and the northeast end of the noted magnetic susceptibility anomaly, which terminates roughly 1000 feet south-southwest from the southernmost hot springs. Most of the lines follow roads or trails. A total of 680 measurements were made. 14 Manley Hot Springs @ — springs ra ‘warm_ground Mee Ve Figure H — Layout of RaMPS Survey Lines Based on the AeroMag model, the area immediately southwest of the surface expressions appeared to be the location of greatest interest where geothermal water is suspected to flow up from depth. The AeroMag model showed that the major anomalous feature extends even further southwest; however, it is believed that further from the surface expressions and the deeper one investigates, the more risk and cost involved in drilling an exploratory test well. Therefore, taking into account the practicality and cost of drilling a test well, the RaMPS investigation focused on an area just southwest of the surface expressions. As mentioned, this is the area where geothermal water is believed to be flowing up from depth to near ground surface. Four of the five RaMPS survey lines cross over this area. Two of the survey lines extend slightly northeast of the surface expressions. These lines were surveyed to help define the subsurface structure influencing geothermal water and its migration to the surface (see Figure H). The RaMPS investigation was initiated on August 31, 2009. The fieldwork was completed September 19, just before inclement weather arrived at the site (snow and freezing temperatures). For a detailed explanation of how the RaMPS technology works, see Appendix B — White Paper (RaMPS Technology Explained). 4.2 | RaMPS Data Results and Interpretation Data reduction, normalization and interpretation of the RaMPS data followed the fieldwork. By itself, the Line B pseudo section (see Figure I) best shows the geothermal resource and bounding structure. Line B crosses the Hot Springs Slough near the center, at station 1350. The major 15 wvaauuyy 1aue Opis disadvantage of Line B was that, between stations 800 and 2000, the line was curvy (being confined to roads and trails) and it ran approximately 30° to the Hot Springs Slough, yielding data with a degree of distortion and especially influence by the nearby slough water. The advantage of Line B is that it clearly defines a sharp contact zone and thereby marks the most likely location for hot geothermal water, which is adjacent to the contact zone. The Manley slough hinders penetration to some degree Line B pseudosection and obscures the bounds of the geothermal resource 0 ee E100 € 200 x 300 Nie 3 & 400 - Geothermal resource © 500+ T T T T T T Th T T T 0 200 400 600 800 1900 1200 1400 1600 1800 2000 2200 2400 "Contact structure bounding] | Stn (™) me resource Is well defined CM 1 25 50 75 100 125 150 175 200 Apparent Resistivity (Q-m) aaeege approx depth (ft) © — springs (23, warm ground i 6, 0 - / Faas Geothermal resou : adjacent to contact wed Aa ta Fae) 2 ; ivity Pseudosection and Map Position | (K<-0.005 SI units ~» [at 250m depti Figure 1— Line B Resist In order to analyze and present all RaMPS resistivity data, the data from all the lines were compiled into a 3D volume so that slices could be analyzed in a similar way to the AeroMag data. Figure J presents a slice of the data volume compiled from all the line data. The slice position is shown by the black dotted line in Figure I. 16 Manley Hot Springs Surface expressions of geothermal water Hot water resource 50 100 150 200 Apparent Resistivity (Q-m) Figure J — RaMPS Data Slice showing Apparent Resistivity Contrast Although the color scales are slightly different, in both Figures I and J the red colors show high apparent resistivity, such as the igneous intrusive material (or basement rock) seen in the lower left corner of the slice. The blue colors indicate lower resistivity, which would tend to show where rocks include water saturation, although in this figure the blue shades cover a wide range of apparent resistivity values (from 1-50 Ohm-m, approximately). In this case interpretation relies partially on the fact that very hot water can increase the electrical conductivity (thereby decreasing resistivity) to a greater degree than water at normal temperatures. Some of the lowest values (darkest blue shade) occur where it is labeled “hot water resource”, which correlates strongly with the AeroMag anomaly. Following a small “trail” of darker blue shading to the left, it appears that “piping” occurs toward the north-northwest direction and up to the surface, possibly through fractures in the rock. The anomalous lows coming up to the surface coincide approximately with the locations of some of the hot springs observed at the surface. When analyzing these data, it is important to keep in mind that the cross-sectional views of the 3D volume include a lot of interpolated data, especially in areas that fall between or far away from the lines shown at the surface (drawn in red). Fortunately, the area beneath the center of the slice in Figure J represents some fairly good coverage from several lines of data; however, much interpolation occurs in the right and far left areas. It is also important to note that resistivity cross-sections are based on apparent resistivity values calculated from the measurements applied to a homogeneous model of constant subsurface conductivities; therefore, the apparent resistivities reflect smoothed or averaged values rather than true values. Moreover, it should be noted that the depths shown in the various cross-sectional views are only estimates 17 based on a homogeneous model. To improve depth accuracy of the RaMPS cross-sections, test wells would have to be drilled to calibrate the model. When acquiring the RaMPS data, the site conditions presented a fairly conductive scenario beginning near-surface, which tends to mask the ability to resolve deeper structure to some degree. Also, the water in the Hot Springs Slough made it very difficult to get accurate readings around the slough. For most of Line A which ran along the slough, it became apparent that the electrical current did not penetrate to normal depths and the readings were often inconsistent, probably because electric current paths were dominated by slough water. Because of this, more than half of Line A data had to be removed from the compiled data volume to achieve an acceptable degree of continuity in the volume before plotting the data. This left a rather large “hole” in the dataset directly over much of the resource delineated by the AeroMag inversion results. Fortunately, several RaMPS lines crossed over the area near the northeast terminus of the AeroMag anomaly, allowing some information to be gleaned in this area—as shown in Figures I and J. Slices taken further to the southwest tend to not show the anomaly as well, mostly because of this “hole” in the data and the fact that it must be interpolated a long distance between opposite ends of Lines B and C to fill in the data volume where the resource is believed to be located. Given these facts, the proposed drilling locations presented in the next section rely more heavily on the AeroMag inversion result than directly on the RaMPS dataset. Fortunately, the AeroMag data were acquired on a tight grid (100 meters between flight lines) and is therefore suited for the purpose. 5.0 _SUMMARY OF INVESTIGATION AND RECOMMENDATIONS 5.1 Summary of Results The analysis and interpretation of both the AeroMag and RaMPS resistivity data have provided insightful and essential information regarding the probable source of the Manley Hot Springs geothermal water. Both datasets strongly indicate that a deep source of geothermal water lies to the southwest of the hot springs, and that this hot water ascends from depth up to a shallow aquifer as it moves northeastward toward the surface expressions. The RaMPS data delineate a sharp contact between high and low resistivity zones along the northwest boundary of the projected geothermal resource. Accurate delineation of the resource itself, given the RaMPS data alone, is somewhat obscured due to difficulties encountered in achieving penetration on lines running near and along the Hot Springs Slough. In conjunction with the AeroMag data, however, the resource can be characterized much more accurately. Purposefully, the AeroMag data were collected on very close flight lines (100 meters apart), which allowed for the creation of an accurate inversion model of magnetic susceptibility contrasts that characterizes the depth of the zone of hydrothermal alteration. This depth information provided by the inversion model is critical, especially given that no deep well logs existed in or around the RaMPS survey area to help calibrate depths of resistivity pseudo sections. The data and models used to provide the interpretation in this report will be made available for TDX and their consulting geologists (Roger Bowers) as needed. 18 Manley Hot Springs 5.2 Recommendations The information presented herein will provide a guided and cost-effective approach to drilling and any further work in characterizing the geothermal resource at Manley Hot Springs. Figure K shows depth slices of the AeroMag anomaly at 100, 200, and 300 meters. To intercept hot water before it ascends from depths and cools, two recommended drilling targets—labeled A and B— are noted in Figure K. Based on the data, priority is given to neither target, but should rather be determined by accessibility. It is recommended the test well(s) be drilled to at least 200-300 meters to prove the resource. ‘Approximate delineation re structure bounding th rmal resource © Hot Springs | — — Warm Ground Flight Lines -_|AeroMag inversion anomaly| : __|(AK <= -0.005 SI units aids ik en Depth slices ~ (AS 100 meters c ~ (AS 200 meters | | 300 meters Figure K - Proposed Drilling Targets A and B There are no other recommendations made or implied as a result of this investigation. Willowstick does not specialize in geothermal development, engineering consulting or construction. Willowstick simply focuses its expertise on groundwater characterization by mapping, modeling and monitoring electric current flow distribution and modeling magnetic susceptibility through subsurface areas of interest. 19 Manley Hot Springs The information contained herein should be compared with all known information of the site to further characterize and substantiate subsurface conditions impacting geothermal activity beneath the surface expressions and underlying soil / bedrock formations. 6.0 DISCLAIMER 6.1 General The data, interpretations and recommendations obtained from the survey and modeling methodologies are based upon sound applied physics. By definition, the evaluation of geologic, hydro-geologic and/or geophysical conditions is a difficult and an inexact science. However, Willowstick feels strongly that the technologies employed herein have yielded information that will greatly help characterize the geothermal resource in question. We certify that this geophysical investigation and report was conducted and prepared by those listed in Appendices A & C. Willowstick makes no warranty or representation regarding the acceptability of any findings or recommendations in this report to any governmental or regulatory agencies whatsoever. 20 Manley Hot Springs APPENDIX A — HELICOPTER AEROMAGNETIC SURVEY REPORT 21 \gocow-pns Acquisition and Processing Helicopter Aeromagnetic Survey Manley Hot Springs, Alaska Performed for: TDX Power, Inc. Performed by: EDCON-PRgJ, Inc. July 2009 Table of Contents Table of Contents ..0.....c.cccccccccceccesseeseeseeseeseeseeseeseeseesessesaecseeaeeaeesesaeeaeeaeeaeeaeecesaseecneceeseseeeeneeaees 1 Table of Figures........0...c ccc ccccccseesscssesscsscssesecseesecsecsecsecsessesseesesseeseeseesesssescsscsecescsecesesceseseees 1 Tintroductions 2.0... ecccccescescsesccssesscsscsecsecseeseeseesecseeseesecsesseeseesecseesessecsessesesscececeeseeeeaeees 2 Manley Hot Springs Survey Area “ Survey Equipments ..0.......... ccc ccc ccesesescescscecsesesscsecscsecsesecscsessesesscseeesssesecsessceceessseesecseees 5 PARP CU ANG ooo ooo ssn cscs cnseescuescsscscsosaseoucosssesseseusscescssececssusyetsesussscéedsscstecssseussesuduatedsdatseresesszessees 5 Airborne Geophysical Equipment: ...... i) Ground-based Geophysical Equipment: . 3 Personnel and Base of Operations: ....... 5 Production Summary: ...........0...0.. 13 GPS Data Acquisition and Processing: . 14 Data Processing ..............:ccceeeeeeee wel Flight Path Recovery? ..........cccccccsccscsseseesescescsscesesscssccscsesessesscsecsscsecsecsesseeseesessseseeseesseseees 15 Magnetic Data’ 0... ccc eeccsseeseesscsecsecseeseeseescescsscsscssceseesescscsscsscecsecsessecseessessesseseeasensees 15 L.G.R.F ot ee neve Diurnal Corrections ........0..c cc ceccceccceccesceseseeseeseeseeeceseseeseeseeseaeescaeecseeeecsessesseeaeeaeeeesaeeaseneeaee 16 Leveling’ .............:ccccsccessscessesseecsceessencesccscescescessencasscecsensssseasenssesscsscessesesscessesceasesceaseaseaseaseaseas® 16 Micro-leveling: ...... 16 Reduction to the Pole:.. Deliverables: .......... 18 SUMIMALY? ooo. eee css cseescsecseescscseseceseeseescescsscsecsecsecsecsecsecsecsecsecseesessessceseeeesecsecsessecaecseeseeaeeate 20 Table of Figures Figure 1: Manley Hot Springs, Alaska Location Map........cccccscessseeseseeseseseeseseeseeeseseeseseeeeees Figure 2: Planned Heli-mag Survey Program ..u........c.ccccccccceseseseseeseeeeseseeseseeeeseeeeeceeeeeseeeeeeeeees Figure 3: Survey Helicopter, Robinson R44, N544TP ve Figure 4: Survey Helicopter Towing Magnetometer Sensor Bird Offsets ..........ccceeseeteeeeees 7 Figure 5: Helicopter Pilot Display, Radar Altimeter and Trimble GPS Antenna..........00.0... 8 Figure 6: Radar Altimeter Display... cece seseseeseseeseeecseeescseeecseesscseescseeesseeceeetecseeeeees 9 Figure 7: Magnetometer Bird with Cesium Magnetometer Sensor mounted in nose and preamplifier in the rear... cece escseescsesseecsesecseecsesecsssecscsecscsecsesesesssseecsesesseeecseeeessesasees 10 Figure 8: Base Station Magnetometer at the Manley Airstrip .........cccccceceeeseseseeeteeeeeeeeeeee 11 Figure 9: Base Station Magnetometer and Base GPS...0..0..ccccccccec es eseeecseeeceeseeseseneeseeeeeees 12 Figure 10: Total Magnetic Intensity Map.....cc cc cccccceescseescsececseseesesesscsesesseeeseseeecaeneesenees 19 Acquisition and Processing Helicopter Aeromagnetic Survey Manley Hot Springs, Alaska July, 2009 Introduction: During the period July 18 to 24, 2009 a Helicopter Aeromagnetic Survey was performed by EDCON-PRJ over Manley Hot Springs, Alaska. A Pico Envirotec AGIS-XP Helicopter- magnetometer system with a Scintrex towed-bird cesium-vapor magnetometer was used. Navigation and positioning were accomplished using Global Positioning System equipment and methods. A base station magnetometer and a base station GPS were operated at the Manley Hot Springs Airport throughout the survey. A Robinson R44 helicopter, N533TP, was utilized as a survey aircraft and Cessna 182, N6002J, was used as a support and mobilization aircraft. Survey operations were completed on July 23, 2009. Processed survey data including a total magnetic intensity map were transmitted to TDX Power’s consulting geologist Roger Bowers on July 30, 2009. These data were acquired and processed by EDCON-PRJ under job number 29012. Manley Hot Springs Survey Area: The Manley Hot Springs location is shown in the map in Figure 1, the planned program is shown in the map in Figure 2. Northwest-southeast primary survey lines are spaced at 100 meter intervals and the northeast-southwest tie-line spaced at 500 meters. A modified drape program was flown with a nominal helicopter terrain clearance of 500 ft AGL (above ground level), this resulted in a nominal magnetometer sensor height above the ground of approximately 408 ft (125 m). A total of approximately 330 line-km were planned, over 500 line-km were flown to insure good data coverage. Pua o ‘Alo = Mt. Michelson, | 2699° + > oe |'# RCTIC CIRCLE “Allakaket Beavers » stevens \? Village Livengood t rent Cc leg. N “8 Fe ss ASticken, 4 *iat Suntrane, BIG pe M8 delta sancti wt Sr waa aphient * = Minchumina Rt- St Michael t2trs sh Ste apie : gh ySunmel (i ari McGrath 306{GI Auerttr, ~* Shageluk i Prageluk ot Farewell* 2609% ce an Holy ei Flat a . Glennallen: 44949 illage™4es¢. Mary “gaatet Pet heed Skwentna, Sut, Onna Ssceeclate Me Gepgineae es ma unas u g a ig) 4996 % Z ‘4 4to9i “Taylor Mts, hathkelt a Nondalton,. re 2 firamyta { ih Figure 1: Manley Hot Springs, Alaska Location Map (Se | Y Figure 2: Planned Heli-mag Survey Program Survey Equipment: The following survey equipment was used. Aircraft: Robinson R44 helicopter, N544TP, chartered from JayHawk Air, Anchorage, Alaska Cessna 182, N6002J, support and mobilization/demobilization aircraft Airborne Geophysical Equipment: Pico Envirotee AGIS-XP Airborne Geophysical Information System s/n 0711005 Hemisphere R-100 GPS with Novatel GPS702 Antenna Pilot navigation display unit Magnetometer survey bird with Scintrex CS2 cesium magnetometer and preamp Trimble 5700 Helicopter GPS with Zephyr antenna Ground-based Geophysical Equipment: GEM 19 Base Station Magnetometer Trimble 5700 base station GPS with Zephyr Geodetic antenna Personnel and Base of Operations: These data were acquired under the direction of John Seibert, EDCON-PRJ geophysicist and fixed-wing support aircraft pilot, The helicopter was chartered from JayHawk Air and piloted by Mark Barker. The crew was based at the Manley Road House. Preliminary data analysis and GPS data processing was performed in the field. Final data processing and analysis was performed by EDCON-PRJ in Denver, Colorado. Figure 3: Survey Helicopter, Robinson R44, N544TP Figure 4: Survey Helicopter Towing Magnetometer Sensor Bird Offsets Figure 5: Helicopter Pilot Display, Radar Altimeter and Trimble GPS Antenna Figure 6: Radar Altimeter Display Figure 7: Magnetometer Bird with Cesium Magnetometer Sensor mounted in nose and preamplifier in the rear 10 Figure 8: Base Station Magnetometer at the Manley Airstrip 11 Figure 9: Base Station Magnetometer and Base GPS at Manley Airstrip 12 Production Summary: The survey equipment arrived in Anchorage on Thursday July 16, 2009. The equipment was checked and installed in the survey helicopter that afternoon and on Friday July 17, 2009. The survey helicopter and support airplane departed Merrill Field in Anchorage at 10:00 on Saturday and arrived at Manley Hot Springs at approximately 13:00 hrs that day. Several small but frustrating problems with the survey equipment were identified and solved that afternoon and on Sunday July 19, 2009. The bulk of the program was flown on Monday through Wednesday July 20 — 22, 2009. The survey helicopter and support airplane departed Manley Hot Springs on Thursday July 23 and returned to Merrill Field, Anchorage Alaska. A Total of 24 helicopter flight hours and six fixed-wing flight hours were required to complete the project (Merrill Field to Merrill Field). The crew based at the Manley Hot Springs Road House during the project. Helicopter and fixed-wing fuel was obtained from Hot Springs Aviation at Manley Hot Springs. Survey data was evaluated for completeness and quality in the field and then transmitted via ftp to EDCON-PRJ in Denver on a daily basis during the project. 13 GPS Data Acquisition and Processing: Two GPS systems were operated during the survey, a Hemisphere R-100 GPS with a Novatel GPS702 antenna and a base and helicopter-mounted Trimble 5700. The Hemisphere GPS provided real-time, autonomous GPS positions to the helicopter navigation system. The Trimble GPS units provided one-second dual-frequency phase data for post processing. The location of the Trimble base was determined using OPUS, as follows: FILE: 84851990.DAT 000082118 NGS OPUS SOLUTION REPORT REF FRAME: NAD_83(CORS96) (EPOCH:2003.0000) ITRFOO (EPOCH:2009.5453) X: -2355824.762(m) 0.006(m) -2355825.685(m) 0.006 (m) Y: -1325377.809(m) 0.036(m) -1325376.770(m) 0.036 (m) Z: 5757761.821(m) 0.018(m) 5757762.168(m) 0.018(m) LAT: 64 59 57.73083 0.019 (m) 64 59 57.72694 0.019 (m) E LON: 209 21 42.96888 0.033 (m) 209 21 42.86524 0.033 (m) W LON: 150 38 17.03112 0.033 (m) 150 38 17.13476 0.033 (m) EL HGT: 90.124(m) 0.013 (m) 90.564(m) 0.013(m) ORTHO HGT: 81.263 (m) 0.121(m) [NAVD88 (Computed using GEOIDO06) ] UTM COORDINATES STATE PLANE COORDINATES UTM (Zone 05) SPC (5004 AK 4) Northing (Y) [meters] 7210465.059 1225382.169 Easting (X) [meters] 611363.354 469901.683 The above Trimble Base location and height were used to process the helicopter-borne Trimble GPS data using Waypoint Software to produce a one-second file of helicopter location and elevation. The Trimble elevation are much more accurate than the autonomous Hemisphere GPS data. The Trimble Orthometric height (based on Alaska Geoid 06) were used for final magnetic data processing. 14 Data Processing The data were processed using the following steps: Flight Path Recovery: The GPS vertical and horizontal coordinate outputs were recorded as latitude, longitude, x, y and ellipsoid height using the WGS84 geographic coordinate system. Mapping parameters for processed digital and mapped data are the following: Projection: | WGS84 Zone: 5 A speed check of the location data was completed, and the line location with the derived aircraft speed information mapped for editing. After editing, the Trimble GPS data were merged with the data set and accepted for the final flight path map production. Magnetic Data: Digital magnetic data from the airborne acquisition systems was received by FTP. The data were read and converted to a line location file. Data Editing e Profile plots of the magnetic data for each line were inspected for noisy or missing data. e The data quality was considered good, and no filters were applied. e No deculturing of the data was performed. LG.R.F.: The International Geomagnetic Reference Field, updated to the dates of the survey, was calculated and applied to the data set. 15 Diurnal Correction: The base magnetometer data were inspected and compared with the observed magnetic data trace. The observed diurnal, corrected for the I.G.R.F. values for the location of the base station, were hi-cut filtered to remove noise and subtracted from the observed magnetic data. Leveling: Misties at line intersections were calculated and adjusted to minimize mistie errors. Initial leveling adjustments were completed using a DC level adjustment to compensate for long wavelength diurnal effects. The average intersection mistie before DC adjustment was 1.75 nT; after DC adjustment, the average mistie was 0.98 nT. After final leveling the average mistie was 0.32 nT. Micro leveling was used to produce the final leveled data. High frequency noise was present, and varied in frequency and amplitude by line. The source of the noise is unknown but could have been caused by the helicopters rotor blades or a connector problem with the magnetometer. The high frequency noise was still present on the final leveled mag. Weiner filtering was used to isolated the noise and then removed from the Total Magnetic Intensity. Micro-leveling: Even after standard leveling is applied to magnetic data (e.g., DC least squares adjustment using misties between profile and tie lines), some corrugation is usually evident in the grid made from the data. This corrugation is due to small mismatches between adjacent lines arising from residual heading errors, small differences in flight elevation, and horizontal positioning errors. The corrugation can be removed from the grid by splitting the gridded data into matching low-pass and high-pass components, applying tuned strike suppression filters along the profile and tie line directions to the high-pass component, and reassembling the result with the low-pass component. This destroys short-wavelength geological anomalies oriented along the flight and tie line directions, but these are unrecoverable anyway in the presence of corrugation. Variations of this procedure are standard in the industry, and are known generally as decorrugation. The remaining problem is to transfer this correction back to the profile data. Simply extracting the profiles from the gridded data yields a result which lacks the short-wavelength content of the original data; the idea is to retain the shorter wavelength components in the profile data, while using the longer wavelength components of the data extracted from the decorrugated grid. The procedure used is as follows. The spectrum of the difference between the profile data and the extracted profiles is analyzed to design a low-pass filter that reflects the long-wavelength part of the difference, and the filter is applied to the difference. The low-pass difference is then subtracted from the profile data, which is equivalent to replacing the long-wavelength component of the profile data with that of the profile extracted from the grid. This is a variation of the procedure known as micro-leveling. 16 The differences between the profile data before and after micro-leveling are quite small, generally less than 1 nT except for DC shifts. However, the final data now interpolates to a grid which is essentially free of corrugation. Reduction to the Pole: Reduction to the Pole calculates the field that would be observed if the survey area were located at the north magnetic pole. This transformation shifts the magnetic anomalies more nearly over the causative bodies. The Reduced-to-the-Pole grid used an inclination of 76.85 degrees and a declination of 20.35 degrees. 17 Deliverables: The following are the deliverable products of this project: tmi.pdf: Total Magnetic Intensity map in pdf format ttp.pdf: Reduced to Pole map in pdf format hg.pdf: Horizontal Gradient map in pdf format tilt.pdf: Tilt Derivative map in pdf format tmi_geo.grd: Total Magnetic Intensity grid in Geosoft grid format ttp_geo.grd: Reduced to Pole grid in Geosoft grid format hg_geo.grd: Horizontal Gradient reduced to pole magnetics grid in Geosoft grid format tilt_geo.grd: Tilt Derivative reduced to pole magnetics in Geosoft grid format tmi.xyz: Total Magnetic Intensity grid in ASCII XYZ grid format. rtp.xyz: Reduced to Pole grid in ASCII XYZ grid format hg.xyz: Horizontal Gradient reduced to pole magnetics grid in ASCII XYZ grid format tilt.xyz: Tilt Derivative reduced to pole magnetics in ASCII XYZ grid format manley.dat: Survey line data in Geosoft XYZ format 29012 Manley Report.pdf: This report in pdf format Survey Line Data Format is shown below: Columns Format Description 1-8 A8 Line Name 9-20 F12.5 Latitude (WGS 84) Decimal Degrees 21-32 F12.5 Longitude (WGS 84) | Decimal Degrees 33-43 F1l1.1 UTM X Meters (zone 5) 44-54 F11.1 UTM Y Meters (zone 5) 55-63 F9.0 GPS Time Seconds of the week 64-70 F7.0 Radar Altimeter Feet 71-78 F8.0 GPS Elevation Feet 79-87 F9.2 Raw Magnetics nT 88-96 F9.2 Final Magnetics nT 97-105 F9.2 Diurnal Magnetics nT 18 ‘TDX Power Inc. [Airborne Magnetic Survey Maniey Hot Springs, Alaska ‘Total Magnetic Intensity IGRF Removed ee Ppt in Laan Grd Figure 10: Total Magnetic Intensity Map 19 Summary: The survey was mobilized rapidly at the clients request. There was some delay at the start of the project due to minor system failures which were corrected. The project area was generally very smoky due to numerous large wildfires south of the project area, the smoke from these fires caused some flight delays and required aborting some survey lines due to insufficient flight visibility. The geophysical product is of high quality and will provide a tool to further understand the geology of the project area. Sincerely, EDCON-PRJ, Inc. nE. Seibert Nick Anderson 20 ayauuyy 2ave Uprigy APPENDIX B — WHITE PAPER (RAMPS TECHNOLOGY EXPLAINED a nt Fe ar ere ca ert es SO willowstick 11814 S. Election Rd. Suite 100 Draper, UT 84020 Tel: (801) 984-9850 www.willowstick.com 43 Manley Hot Springs 1. Introduction RaMPS®, which stands for Resistivity Mono-pole Profiling and Sounding, is a unique and proprietary geophysical survey and exploratory methodology developed by Willowstick Technologies™ by combining traditional resistivity sounding and profiling techniques into an integrated surveying method. It is not only unique in the way the data is acquired, but unique in the way the information is processed, plotted, and interpreted. Although similar in many respects to traditional resistivity surveys, the RaMPS methodology has proven to be more accurate and insightful than traditional resistivity for resolving geologic structures and lithology (horizontal and vertical alignment). The RaMPS technology was first conceived many years ago by Jerry R. Montgomery, PhD, inventor of the patented AquaTrack geophysical technology and co-founder of Willowstick Technologies. While working as a senior geophysicist for a well known mining company, Dr. Montgomery performed a variety of resistivity profiling and sounding surveys in many geologic settings prior to exploratory excavation and drilling. In the process of comparing the physical observations with electrical property measurements obtained through traditional resistivity techniques, Dr. Montgomery observed that the resistivity pseudo-section plots (or subsurface cross-sections based on the theory of apparent resistivity) tended to misalign the anomalies with the corresponding structures observed in the excavation and drilling information. A further examination of the subject proved that in general, the interpretation of resistivity by traditional methods often yielded misleading information about the subsurface properties. The same holds true for induced polarization or IP data, which is collected and plotted with the same survey configurations. As a result, Dr. Montgomery began to develop a new methodology for resistivity profiling and sounding based on observations and theory. The new methodology involves some key changes to the survey configuration as well as the complementary data reduction, plotting, and interpretive procedures. Since the time the original RaMPS methodology was conceived, Willowstick Technologies’ staff members have refined the data acquisition process as well as the processing, plotting, and modeling techniques that are currently used. As will be explained and demonstrated in this White Paper, the RaMPS technique has proven more accurate, insightful, and cost effective in comparison to traditional resistivity profiling and sounding techniques for resolving subsurface geology. The fundamental similarities and differences of the RaMPS and standard resistivity techniques are presented in this paper along with a case study applied to a deep and geologically complex site. However, because the survey configurations, data acquisition processes, data reduction and modeling practices are considered proprietary, some specific details of the RaMPS methodology are intentionally omitted. 2. General Description The RaMPS survey method uses DC electrical current to induce current flow in the subsurface. Measurements of potential differences are made using electrodes placed at strategic surface locations. Subsurface resistivity is calculated using the standard and currently accepted equations based on the physics and the array geometry (electrode positions). The equations used 44 Manley Hot Springs with the RaMPS methodology can be reviewed in geological survey professional paper 499 “Interpretation of Resistivity Data” by Van Nostrand and Cook. All potential measurements are made between two half-cell electrodes and are repeated over numerous cycles of both positive and negative electric current flow. This allows for the removal of the DC offset (spontaneous potential) simultaneously while the repeat measurements are gathered to statistically improve the accuracy of the data. The RaMPS method utilizes a unique data acquisition procedure to construct accurate depth sounding curves at predetermined sounding center points, which are strategically selected along each survey line. These center points are similar to sounding centers in a standard Schlumberger array. Sounding curves can be interpreted using vertical sounding models to identify interfaces such as water tables or boundaries between lithologic units having a contrast in electrical properties. The RaMPS method also accumulates information in a unique way to measure lateral variations along a profile line and accurately identify changes in geologic structure. The methodology has been tested and proven in many cases to map geologic structure more accurately than can be obtained by the traditional arrays and traditional interpretation. This is demonstrated in the case study. All the information is ultimately combined to create a subsurface 3D model of apparent resistivity that accurately reflects the location of geologic structure associated with electrical contrast. The primary difference between RaMPS and standard resistivity starts with the way the data is collected. It is a common approach with resistivity surveys to first obtain lateral profiles for reconnaissance or for “scouting” out an area, and then to follow up with more detailed vertical electric soundings (VES) in desired locations to supplement the profile information. With RaMPS, The electrodes are placed so that both the lateral profile and VES information is gathered simultaneously which minimizes the in-field expense. This results in the acquisition of more measurements from which models of the subsurface can be created at minimal expense. 3. Equipment The equipment used to measure the resistivity properties of subsurface rock formations is comprised of an accurate data logger that interfaces with a laptop computer to monitor and record the information. The computer provides real-time resistivity calculations, plots of sounding curves and resistivity pseudo-sections on the fly. Digital multi-meters built into the data logger are galvanically coupled to the earth through two half-cell reference electrodes. The data logger is accurate to .3 wV on a 25 mV scale which is comparable to available resistivity equipment. In addition to the receiver equipment, an electric transmitter is used to generate direct current in the earth through galvanic coupling. The transmitted electrical current is also measured by the data logger. In general, the data logger eliminates discrepancies between measurements and improves overall data accuracy. All measurement station positions are determined using a Global Positioning System (GPS) with an accuracy of about one meter. This spatial information is used to map the location of the measurement station as well as for reduction and interpretation of the data. 45 Manley Hot Springs 4. Data Collection Like many traditional surveys, the RaMPS data acquisition process collects resistivity, spontaneous potential (SP), and induced polarization (IP) data at every measurement station. Unlike traditional surveys, the array design and the movement of electrodes follows a unique prescribed pattern that minimizes the error in locating geologic structures. The RaMPS measurements are all taken in the time domain. The DC energizing cycle is based on a four-second pulse rate that follows a four-step sequence. The first step in the sequence is a four-second application of positive electric current, the second step is four-seconds of no electric current, the third step is four-seconds of negative electric current, and the fourth step is four- seconds of no electric current. This four-step sequence is repeated as many times as necessary to obtain a statistically significant low deviation of measured and recorded values. At each change in the energizing sequence (positive electric current flow, negative electric current flow, or no electric current flow) the charging or discharging rate is measured. The rate of discharge from the earth, measured in millivolts per volt, is used to determine the IP effect. The potential difference and electric current flow measured during the “ON” cycles is used to calculate the apparent resistivity in Ohm-meters at each station. During the “OFF” cycles, the potential difference between the half-cell reference electrodes is measured in millivolts to record the SP effect, which can supplement the resistivity data by providing information on the natural ion movements in the subsurface. Resistivity, IP, and SP values are all reported in standard units. The spacing between measurement stations is adjusted according to the level of detailed necessary to meet survey objectives. Station spacing may also be influenced by the particular site conditions and adjusted based on the electrical properties associated with the particular geologic setting, which can vary drastically. The distance between the source and receiver electrodes determines the approximate depth of investigation. For each transmitter electrode dipole location, the potential measurements are taken at increasingly longer distances from the source dipole until the desired depth of investigation is obtained or until the potential difference drops below a readable level. The potential difference readings, along with the measured transmitter electric current flow and the known GPS station coordinates, are all used together to calculate the apparent resistivity of the subsurface rocks through which the current is flowing. Based on a model of homogeneous electrical conductivity background, this calculation is made automatically by Willowstick’s resistivity recording and plotting software so that a cross-section of the subsurface can be visualized as the readings are being taken. This facilitates on-the-spot decisions to be made regarding data collection and station spacing in order to maximize productivity and acquire data at the necessary level of detail. The measured data and resistivity calculations are also stored in the computer’s spreadsheet to allow for a closer examination of the data. 5. Explanation of Measurements The three measurements obtained by the RAMPS technology include: (1) resistivity; (2) induced polarization or IP; and (3) spontaneous potential or SP. All of these provide different information about subsurface conditions. In most cases, the resistivity information is the most 46 Manley Hot Springs critical to establishing an accurate interpretation of the subsurface. The SP and IP readings provide supplemental information to the resistivity data that can aid in the final interpretation. The SP data, which is referenced to a single station along each profile, provides information on electrochemical potentials and possible groundwater movement. These two effects cannot be distinguished using SP alone. However, if the SP data is correlated with other information such as resistivity, IP or magnetics, a better model of the site can be formulated because one set of data can act as boundary conditions when modeling other conjunctive data. IP describes the rate at which the subsurface discharges electricity. This discharge rate can be linked to certain materials that will either slow or speed up the rate of discharge; for example, good conductors such as water with ions or massive sulfides will discharge quickly and have a low induced polarization; whereas, clays, disseminated sulfides, and copper porphyry deposits have a higher induced polarization because they discharge at a slower rate. Distinguishing between regions of high and low induced polarization may indicate changes in rock type or clay content in unconsolidated sediments. By correlating induced polarization and resistivity anomalies, models of the subsurface resistivity and IP can be formulated to express either a comprehensive or targeted interpretation of subsurface geology. Resistivity measurements in general are very sensitive to groundwater, rock type, and subsurface structure. Groundwater is very important in resistivity because it strongly influences the electrical conductivity of the rocks through which it permeates. Rock type is also important because variations in porosity and permeability—which control the amount of void space or water-saturated space within rocks—can strongly affect the resistivity property of a rock. The last effect is structure which is generally confined to more isolated parts of the data rather than the data as a whole. Faults and other structure can be detected due to the contrast in electrical properties between adjacent rock units and/or due to groundwater pooling within open spaces along fractures. 6. Data Interpretation The interpretation of RaMPS data is similar to interpreting any other traditional resistivity/IP survey. Resistivity and IP pseudo-sections are created to show the variation in resistivity along a survey line and serve as one method to graphically present the interpretation. The true depth at which the electric current penetrates into the subsurface depends on a number of factors including the geology and the electrical properties of the subsurface rock under investigation. To reflect accurate depth information, models of individual sounding curves can be prepared and calibrated to existing well logs. Pseudo-sections of the calibrated data are used to identify anomalies and to discriminate between lateral changes and those related to depth. Once these anomalies are identified and understood in the pseudo-sections, the data is combined to generate subsurface volume and/or cross-section plots which show the 3D structure of the subsurface with interpretive information about the subsurface geology. 47 Manley Hot Springs 7. Case Study — Cove Fort Geothermal Site, Sulphurdale, Utah A. General Information Willowstick Technologies performed a Resistivity Mono-pole Profiling and Sounding (RaMPS) geophysical survey of the Cove Fort Geothermal Resource near Cove Fort / Sulphurdale, Utah. The purpose for the RaMPS geophysical investigation was to better characterize the geothermal resource as well as to identify a suitable location for an injection well field required of the proposed geothermal power plant. The location and successful operation of the injection well field is of utmost importance for the permitting, development and operation of the proposed Cove Fort Power Plant. From previous investigations completed on the Cove Fort geothermal resource (which were performed by Willowstick and others) it appeared that the area containing the greatest amount of geothermal fluid was located along a fairly narrow northeast/southwest striking feature containing geothermal fluid concentrations about 2,000 to 3000 feet below ground surface. In order to better characterize the geothermal resource as well as to efficiently and cost effectively identify a suitable injection well field site, Willowstick Technologies proposed a new resistivity sounding / profiling technique to characterize deep subsurface structure likely influencing the geothermal resource in the area. This exploratory survey technique (RaMPS) was applied at the Cove Fort site to obtain and compare subsurface information over the main resource (where a significant amount of information and well log data exists) with RaMPS data obtained west of the resource. This was done in an effort to calibrate the geophysical data with existing well log information and to create an accurate subsurface model of the resource west and down gradient from the known production zone. The survey was targeted to identify structure and faulting changes influencing the hydro-geology of the site. Identifying these faults in the subsurface (depth, strike, and dip) is of significant importance in characterizing the geothermal resource as well as determining a suitable injection well field location. B. Survey Layout The fieldwork consisted of four lines totaling about 40,000 feet. The four survey lines surrounded and crossed over the known geothermal resource (see Figure 1 below). Fifteen sounding centers were identified on the four survey lines. Measurements were taken along each line using each of the base points in one or both directions, resulting in a total of 21 different profiles and 290 measurements. The data reduction, normalization and interpretation developed 2D maps, graphs and figures as well as a 3D model of the resource. Figure 1 below shows a plan view of the site and identifies the locations of the RaMPS survey lines and the 15 sounding centers along the lines. The four survey lines, labeled A, A', B and C, surround and cross over the known geothermal resource. 48 Manley Hot Springs 5] —— lineA ——— line A’ ——— line B ——— line C C 7 1 or = qi Ms D a Y Wy eS Figure 1 - RaMPS Survey Layout - C. Results of Investigation The RaMPS resistivity profiling and sounding survey measurements were used to generate a 3D model. The visualization tools for this model run in the MATLAB™ modeling and programming environment. Figure 2 below represents a snapshot view of a vertical slice or profile view through the 3D model. The geophysical data incorporated into the model shows significant changes and trends in the subsurface that match very closely with well log data and other studies performed on the site. Using the RaMPS subsurface exploratory survey technique to investigate the geothermal resource a suitable injection well field was identified and recommended for development. 49 Manley Hot Springs Plan View +— slice alteration approx depth (tect) - Y(m) 10 16 20 25 30 35 40 Apparent Resistivity (Ohm-m) 361000 x(m) Figure 2 — Cross Section of 3D Model Figure 2 above represents a summary of the findings of RaMPS geophysical investigation. This is a snapshot of a vertical slice through the 3D model created using the RaMPS data. This east- west cross-section is centered just north of the geothermal resource’s center. This particular view looks north through the area of investigation. There are 3 existing wells and other surface features used to orient the reader’s position with respect to the site and subsurface resource. The dark blue shading in the figure represents low resistivity zones. The orange shaded areas represent high resistivity zones. Wells 24-7, 34-7B and 42-7 are just a sampling of approximately 20 wells drilled into the resource at this site. Because of scale and the many wells on the site, only 3 wells are shown in this particular profile view of the model. These wells and others on site confirm and support the accuracy and findings of this RaMPS investigation. For example, Well 24-7 was completed to a depth of 1,391 feet. This well was never fully developed because of its marginal production according to well log records. The RaMPS survey confirms that this well resides on the edge of the resource which accounts for its marginal production. Well 34-7B was completed to 1,148 feet. This well is reported to be a good well; however, it was only completed to the upper reaches of the resource near the interface of the hot water and steam cap. Well 42-7, which was originally drilled to 7,000 feet (bgs) was plugged at 3,100 feet (as shown in the figure). It was perforated near the 2,500 foot depth where spent geothermal 50 Manley Hot Springs fluid was historically injected from the original power plant. Injection well 42-7 was used to discard spent geothermal fluid near the bottom of the hot water production zone. Figure 3, which is a reproduction of Figure 2, shows added marks and notations to highlight anomalies observed in the data and show a theorized interpretation of the overall geothermal resource. Plan View <+— slice migrates \42-7 the fault 10 15 20 25 30 35 40 Apparent Resistivity (Ohm-m) 361000 — x (m) Figure 3- Interpretation of Cross Section The RaMPS model indicated that the geothermal resource lies in a horst & graben setting. A major fault exists where the geothermal fluids are most concentrated. This major fault separates the eastern graben from the horst. It is theorized that as groundwater flows from the mountains located east of the site, it is conveyed downward into a major fault zone where the water is trapped and super heated from below. Heat probably flows upward along the fault zone from deep within the earth. The heated groundwater is trapped in the graben which spills over the horst and flows westward or down-gradient into the valley. The groundwater cools as it flows westward. This spilling of geothermal fluid over the horst at this location is referred to as a tea cup effect and is noted as such on the drawings (see Figure 3). 51 Manley Hot Springs The major fault zone referred to above is believed to be a weakened area where ancient volcanic material has pushed upward toward the surface of the ground. A surface expression of this ancient volcano can be observed in the topography of the site and is located northwest of the main geothermal resource. The presence of the ancient volcano is supported in the geophysical ground magnetic data (see Figure 4) and RaMPS resistivity volume (Figure 3). Total Magnetic Field Contour Ranges (+52,160 gammas) >—_ Evidence of volcano ™S shown in magnetic Ss >> » 0 Figure 4 — Magnetic Contour Map The RaMPS data identified an alteration interface that reflects changes in resistivity due to past alteration of rocks by geothermal fluids. This interface between altered and non-altered rocks comes very close to the surface over the known geothermal resource area. Figures 2 and 3 show the interface as a net draped beneath the surface. Figure 5, which utilizes a USGS topographic overlay, was created to more easily visualize this interface. The dark blue shading in Figure 5 shows where the altered material is very near the surface and the sulfur pit at the south end of the resource. The blue area is clear evidence of the geothermal fluid activity which reached the surface. 52 Manley Hot Springs Alteration reaches surface over the known geothermal resource area Contour labels and surface shape indicate approximate depth to geothermai aiteration interface Figure 5 — 3D View of Alteration Interface Figure 6 below shows the location and orientation of faults observed in the geophysical profiling work. This map was created from the resistivity profiling data. Faults are numbered #1 through #12 in the figure. It should be noted that Faults #3 and #4 represent the major faults involved in trapping and concentrating the geothermal fluids and where groundwater is heated from beneath. Faults #1 and #2 have a south-southwest strike and a westward dip. They represent the eastern edges of the graben lying just east of the main horst structure in the center (see cross section in Figure 3). Fault #4 dips slightly eastward and represents the western edge of this graben. Fault #7 is likely the major range front fault with other small faults paralleling it (Faults #5, #6, #8 and #9). These range front faults also have a south-southwest strike and they dip to the west. The horst structure that traps the geothermal water is located between Fault #4 and the range front faults. 53 Manley Hot Springs %, ILI GA. Sy ——— line A’ ——— line B Figure 6 — Fault Location Map The combination of profiling with sounding measurements has made possible the creation of a 3D model from which Figures 2 and 3 were created. It should be noted that as geothermal water spills over the horst (as shown in Figure 3) the geothermal fluids flow westward and downward towards the range front fault. The escaping geothermal fluid is first intercepted by Faults #5 and #6. The area bounded between Faults #5 & #7 is the area recommended for the injection well field. This location meets the criteria for an ideal injection well field based on the following observations: (1) this area is hydraulically connected to the geothermal resource but down gradient of the resource; (2) it is located thermally down gradient from the main resource, where cooler temperature groundwater resides; (3) this area appears to be a highly porous zone capable of receiving the spent geothermal fluid; (4) this site is located down-gradient (topographically) from the power plant, which will minimize pumping costs. It is also in relative close proximity to the proposed power plant; and (5) this area also resides within the BLM leased land for the geothermal resource. The proposed operation of the power plant will require geothermal fluid to be pumped up out of the production zone (located east of the horst) and the spent geothermal fluid injected back into the ground west of the horst. Injection of the spent geothermal fluid would be driven by gravity 54 Manley Hot Springs as this injection well field is located down-gradient (topographically) from the power plant. In utilizing the geothermal resource in this manner, the power plant will have no negative impact to the geothermal resource. Rather than the water naturally spilling over the horst (tea cup effect) the proposed operation of the power plant would simply intervene by acting as the tea cup. D. Conclusions The RaMPS survey methodology provided useful and essential information for locating electrically conductive zones related to faulting and/or structure changes which allowed for the identification and confirmation of concentrated geothermal fluid beneath the study area and where spent geothermal water can be injected back into the ground to optimize power plant operations without negatively impacting the subsurface groundwater regime. A 3D model was created of the subsurface resource and surrounding area for presentation of the data and further analysis of the geothermal resource. An interactive model cannot be incorporated into this report; however, snapshot and cross-section views of the subsurface resource are included. If there is interest in viewing the interactive model, please feel free to contact Willowstick. Willowstick Technologies does not specialize in geothermal power production but focuses its expertise on groundwater and subsurface structural characterization, modeling and mapping. 5D APPENDIX C — PROFESSIONAL BIOGRAPHIES Manley Hot Springs VAL O. KOFOED, P.E. President / Principal Engineer Education > B.S. — Civil Engineering (1983) Brigham Young University, Provo, UT Professional Experience — 26 Years > Willowstick Technologies, LLC 2004 — present President and Consulting Engineer. Responsible for daily operations of all groundwater characterization investigations. > Sunrise Engineering, Inc. 20 years experience as a Consulting Engineer. 1983 — 2004 Principal Engineer from 1987 to 2004. Responsible for Hydrogeology Division and water resource engineering related projects. > Western Utility Contractors 1982 — 1983 1'/ years experience as Project Engineer. Estimator and Project Engineer on water resource construction projects. Registration > Registered Professional Civil Engineer Utah (#172947) Arizona (#20923) JERRY R MONTGOMERY, PH.D Chief Geophysicist / Inventor, AquaTrack Methodology Education > B.S. — Physics (1965) Weber State University, Ogden, UT > Ph.D. -— Geophysics (1973) University of Utah, Salt Lake City, UT > Post Doctoral Studies — Geostatistics (1974) University of Leeds, Leeds, England Professional Experience — 40 Years > Willowstick Technologies, LLC 2004 — present Chief Geophysicist. Assisted in spinning off the AquaTrack technology and Hydrogeology Division from Sunrise Engineering into it own business unit (Willowstick). Responsible for interpretation and further improvement of the AquaTrack hardware and software including other new groundwater mapping technologies. > Sunrise Engineering, Inc. 2001 — 2004 Research and Development Director. Responsible for improving the AquaTrack technology, taking it from an analog to a digital technology. 56 Manley Hot Springs > Self-employed 1996 — 2001 Inventor and patent of the AquaTrack technology. Conducted contracted AquaTrack surveys. > Bureau of Mines 1990 — 1996 Staff Scientist and Researcher. Involved in bio research for removal of heavy metals. Developed electromagnetic tracking and monitoring equipment for monitoring groundwater plumes, biological process, and in-situ leaching. > U.S. Army, Dugway Proving Grounds 1986 — 1990 Operations Research Analyst. Served as Contracting Officers Representative for diverse contracts. Devised unique technique for analyzing time dependent data and helped developed NBC projection for M1 tank, Apachy, LCAC’s and C117’s. > ASARCO, Inc. 1968 — 1986 Chief Geophysicist. Responsible for organization, direction and interpretation of geophysical surveys. Developed programs to study minerals, groundwater and environmental problems. Developed new geophysical technologies and expanded theories to implement and improve geophysical interpretation. RONDO N. JEFFERY, PH.D Physicist / Research and Development Education > Ph.D. —Physics (1970) University Illinois — Urbana/Champaign > MS. -— Physics (1965) Brigham Young University, Provo, UT > B.S.-— Physics (1963) Brigham Young University, Provo, UT Professional Experience — 30 Years > Willowstick Technologies, LLC 2004 — present Physicist. Assists Dr. Montgomery with all aspects of research and development. Responsible for the electronic design and construction of the AquaTrack receiver. > Weber State University 1980 — present Professor of higher education and research. Taught courses in electronics, solid-state physics, engineering physics, nuclear physics lab, and astronomy. Participated in numerous research and development projects. Authored many publications and presentations. MICHAEL L. JESSOP Geophysicist Education >» M.S.-— Geophysics (2005) University of Utah, Salt Lake City, UT > B.S.-— Geophysical Engineering (2002) Montana Tech, University of Montana, Butte, MT 57 Manley Hot Springs Professional Experience — 7 Years > Willowstick Technologies, LLC 2005 — present Staff Geophysicist. Responsible for data analysis & modeling using MATLAB™ programming package to understand probable groundwater flowpaths observed in the AquatTrack data. Assists with data interpretation and quality control. > Gradient Geophysics, LLC 2002 — 2003 Geophysics Field Crew. Worked with and directed crews on geophysical field surveys including resistivity, IP, and magnetic data acquisition. MICHAEL WALLACE Geophysicist Education > M.S. — Geophysical Engineering (2006) Montana Tech, Butte, MT > B.S. — Physics (2003) Hampden-Sydney College, Hampden-Sydney, VA Professional Experience — 4 Years > Vv Willowstick Technologies, LLC April 2006 — present Staff Geophysicist. Responsible for initial data interpretation and data quality control. Also responsible for Reduction program and Field program. Assists in modeling using MATLAB program and with data interpretation. Curtin University Exploration Geophysics Department, Perth WA 2004 Exchange Student. Assisted with land seismic, seismo-electrics, and Time Domain EM surveys over gas reservoir. Built portable audio magnetotelluric survey system. Sweet Briar College 2003 Student Research Intern. Processed radio astronomical data in search of circular polarization in active galactic nuclei. Hampden Sydney College 1999 — 2003 Student Research Assistant. Tested amplifier circuits for X-Ray fluorescence spectrometer, cleaned and tested cryostat and vacuum system. Developed scripts in Python and AWK to automate astronomical observations in small radio telescope National Radio Astronomy Observatory 2001 Engineering Intern. Worked with Metrology Group on active projects and developed low level control software for HP Laser Measurement System. 58 oink, - “7 af 2) Manley Hot Springs af? ; wn * Minto Lakes £ ' j 4 Kantishna River ~ =e Ti LLOWSTICK TECHNOLOGIES, LLC. Groundwater Mapping Services 11814 Election Road, Suite 100 Draper, Utah 84020 TEL: (801) 984-9850 FAX: (801) 984-9851 Mag & RaMPS Geophysical Investigation Ses Manley Hot Springs, Alaska willowstick Figure 1 - Project Location SCALE: 4:5,500 AeroMag Survey Area =| with Flight Lines spaced WM > SNS e 100 meters apart AS SSO aK > = uy L a rf 4 { Nee ky | ——s_: Miles| °*: | | oe 0 1 2 a | loa S = | tee — LA ste, eae at eee OS Sy | | vvILLOWSTICK TECHNOLOGIES, LLC. Mag & RaMPS Geophysical Investigation] proJect#: 09091 Groundwater Mapping Services ees Manley Hot Springs, Alaska aac oes Hiiemere Ont ean tit willowstick] Figure 2 - Site Map and Area of TEL: (801) 984-9850 FAX: (801) 984-9851 Investigation SCALE: 1:72,000 \ ; SSS . JILLOWSTICK TECHNOLOGIES, LLC. Mag & RaMPS Geophysical Investigation Groundwater Mapping Services == Manley Hot Springs, Alaska 11814 Election Road, Suite 100 Draper, Utah 84020 willowstick] Figure 3 - Reduce-to-Pole (RTP) TEL: (801) 984-9850 FAX: (801) 984-9851 Magnetic Intensity Map A B c D E F ! 2 Tain, ff i ss 7 : Clea e en 2 ; i *s ve fa \ EE - f Fo Va ae —s / a Baers me ou a g he - S A Oo AES a ber 1 RSet <taetes - ia om / 5 aioe OS oF J ia mee 5 a i, y = > / ey, 2 RN y NI Legend : : © — springs m3 warm ground 3 4 5 6 7 8 ‘ s Dice ad. a on ‘ 7 9 a es Feet Se 1,000 2,000 LZ i XS x a PL, Av pee vvILLOWSTICK TECHNOLOGIES, LLC. Mag & RaMPS Geophysical Investigation] proJect #: 09091 Groundwater Mapping Services =a Manley Hot Springs, Alaska oaTe oipenaoos ee Dfaper Utah 84020 willowstick Figure 4 - Close-Up Map of TEL: (801) 984-9850 FAX: (801) 984-9851 Anomalous Zone SCALE: 1:18,000 AK = -0.005 SI units | suscetibility contrast 0.005 0 0.005 magnetic susceptibility constrast (SI units) vvILLOWSTICK TECHNOLOGIES, LLC. Mag & RaMPS Geophysical Investigation Groundwater Mapping Services ~~ es Manley Hot Springs, Alaska Te Re Ul Sano willowstick]| Figure 5- 3D Inversion Model with i TEL: (801) 984-9850 FAX: (801) 984-9851 Low Magnetic Susceptibility Anoma es 2 oO [ cc] c ~ D E F G Legend @- springs oe d 2 (8 warm_groun 2 3 3 | 5 5 4 . 2600 |? ; | 8 & 9 | 9 ees Feet : 0 500 1,000 vvILLOWSTICK TECHNOLOGIES, LLC. Mag & RaMPS Geophysical Investigation] proJect #: 09091 Groundwater Mapping Services =e Manley Hot Springs, Alaska 11814 Election Road, Suite 100 . . . DATE: 21-Dec-2009 Draper, Utah 84020 willowstick Figure 6 - Layout of TEL: (801) 984-9850 FAX: (801) 984-9851 RaMPS Survey Lines SCALE: 1:13,200 The Manley slough hinders penetration to some degree and obscures the bounds of the geothermal resource Line B pseudosection = = a o Ts x< La 1200 S Geothermal resource 4500 = T T T T T T T 00 1200 1400 1600 1800 2000 2200 2400 Station (m) 25 50 75 100 125 150 175 200 Apparent Resistivity (Q-m) A : | Slice position Boy | OW “ Soy Ss *Sharp transition to| AN i / 7 20072. | low-anomaly zone | J springs O 4 i “SF Oe Oa fF lew NG ; A) 3 warm ground Ah iy ; sig fe mt 4 “2 |AeroMag anomaly “ee (K<-0.005 SI units at 250m depth) a a a vvILLOWSTICK TECHNOLOGIES, LLC. Groundwater Mapping Services 11814 Election Road, Suite 100 Draper, Utah 84020 TEL: (801) 984-9850 FAX: (801) 984-9851 : Mag & RaMPS Geophysical Investigation ~—Eee Manley Hot Springs, Alaska : : = - —— DATE: 21-Dec-2009 willowstick Figure 7 - Line B Resistivity Pseudosection and Map Surface expressions of geothermal water y we > _j|gneous intrusion? 50 100 150 200 Apparent Resistivity (Q-m) 4 1 . ft _ eZ AeroMag anomaly = at 250-m depth F c { : = me ia : vvILLOWSTICK TECHNOLOGIES, LLC. Mag & RaMPS Geophysical Investigation] proJect #: 09091 Groundwater Mapping Services es Manley Hot Springs, Alaska A 11814 Election Road, Suite 100 . . : : . DATE: 21-Dec-2009 Draper, Utah 84020 willowstick | Figure 8 - RaMPS Data Slice showing TEL: (801) 984-9850 _FAX: (601) 984-0851 Apparent Resistivity Contrast Te #:12,000 © Hot Springs — — Warm Ground Flight Lines Approximate delineation : _|of structure bounding the Depth slices pal 100 meters m3 200 meters 300 meters vvILLOWSTICK TECHNOLOGIES, LLC. Mag & RaMPS ——— investigation] procr# coor | PROJECT#: 09001 | Groundwater Mapping Services 2S Mai Hot tegen BO willowstick | Figure 9 - Proposed D TEL: (801) 984-9850 FAX: (801) 984-9851 AandB