LRL Leyshon Res

TIDMLRL

RNS Number : 2810I

Leyshon Resources Limited

29 May 2014

LEYSHON RESOURCES

29 MAY 2014

MT LEYSHON PEAK DEMAND POWER PROJECT CONCEPT STUDY

Highlights

-- The Company has recently commissioned a study indicating that Queensland will require new power generation capacity as early as 2017, with peak electricity demand forecast to grow at more than three percent per annum over the next decade

-- Taking advantage of the existing reservoirs on site, the study indicates that a Pumped Storage Hydro Power Station of approximately 20-40 megawatts could be developed at Mt Leyshon, at a cost more favourable than competing alternatives and with the operating flexibility to generate electricity almost instantaneously to meet peak electricity demand

-- The project is similar to other highly successful pumped storage schemes around the world and is considered to be one of the first to capitalize on existing mine site infrastructure

-- The Company will be approaching potential strategic partners that can bring off-take or development synergies to the project

Leyshon Resources Limited (AIM/ASX: LRL) ("Leyshon" or the "Company") is pleased to announce the completion of a study into pumped storage hydro ("PSH") power generation at Mt Leyshon. The high level study is part of broader strategic review which includes assessing the reprocessing of the mill scats and the historical exploration data.

The concept involves generating near-instantaneous electrical power and supplying it into the grid at times of peak power demand by releasing water from the existing upper reservoir through a hydro generation plant. The upper reservoir is refilled from the existing open pit during periods of off-peak prices.

The Australian Energy Market Operator forecasts that new generation capacity will be required in Queensland by 2020 in order to maintain supply reliability within the National Electricity Market Reliability Standard. Under a high growth scenario, this requirement for new capacity may be as early as 2017.

The optimal project sizing based on the physical reservoir characteristics is estimated to be around 40 megawatts ("MW"). The existing power line infrastructure connected to the site supports a project of up to 20MW and with modest upgrades may support up to 40MW.

The unit cost of production for a 20-40MW PSH plant at the Mt Leyshon site compares favourably to the cost of a larger-scale open-cycle gas turbine project, the assumed next best alternative for providing fast-start peak to intermediate generation capacity (i.e. a capacity factor of up to 30-40%.).

Whilst the study demonstrated positive project economics, further work will be required in areas including water chemistry, capital and operating cost estimates, networks, engineering, and regulatory.

The report recommended identifying a strategic partner to assist with managing market risk and underpinning the commercial viability of the project by securing either a medium to long-term off-take with an electricity retailer or major energy user, or a medium to long-term network support contract with the local network service provider.

For further information please contact:

Leyshon Resources Limited

Corey Nolan - Managing Director

Tel: +61 7 3221 7770

admin@leyshonresources.com

Cantor Fitzgerald Europe

David Porter/Rick Thompson (Nominated Adviser)

Richard Redmayne (Corporate broking)

Tel: +44 (0)207 894 7000

http://www.leyshonresources.com

This information is provided by RNS

The company news service from the London Stock Exchange

END

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