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    HOMEX - Brisbane


    * The well design for Habanero 1 was completed;

    * Field activities in the Cooper Basin have commenced;

    * The design and specifications for the hydraulic stimulation and the
    monitoring programme have been completed;

    * Corporate policies on Health and Safety and on Environmental
    Management were implemented;

    * Use of Kalina Cycle technology will reduce generating costs;

    * Collaboration agreements with the Soultz project in France (EEIG)
    and CRIEPI in Japan are nearing completion;

    * Drawdown on the $5 R&D Start grant has commenced.


    Geodynamics is making good progress in the development of the world
    class HDR geothermal resource in the Cooper Basin. Some start up
    delays have been encountered, but at the time of writing, field
    activities in the Cooper Basin are in full progress.

    The scope and size of the Cooper Basin HDR project is such that we
    regard it as one of national importance. It represents an outstanding
    opportunity, without parallel, to change the energy balance in
    Australia away from fossil fuels. For its size and age, the Company
    is uniquely placed in having access to direct advice from a large
    network of national and international research organisations as well
    as companies.

    Following the issue of the COAG report (Parer report) in November
    2002, the national energy policy is set to move to centre stage in
    Canberra this year. The COAG report has resulted in considerable
    confusion particularly in the renewable energy sector as it has put
    into question the so-called "Mandatory Renewable Energy Targets"
    (MRET) designed to achieve a cost effective longer-term CO2 emission
    reduction strategy. Instead, the Parer report focuses on short term
    measures such as "carbon trading", thereby indirectly questioning
    Renewable Energy Certificates (REC's) as a long term commercial
    incentive. Whatever the outcome of this important debate, we believe
    that Geodynamics is in a good position since the known high
    underground temperatures in the Cooper Basin have the capacity to
    generate power at a significantly lower total cost than other
    identified renewable energy resources.

    Moreover, the western world's extreme dependency on finite oil
    reserves from the Middle East (e.g. the US needs to import 6 million
    barrels per day), combined with strong and ongoing international
    pressures for emission reduction measures also places the Company
    well from an international perspective. Plans are in place to broaden
    the understanding of investors (institutional and individual) of
    energy markets, both nationally and internationally, with the
    objective to broaden our overall investment appeal.


    The period ending December, 2002 was the first quarter for
    Geodynamics as a listed Company. The Geodynamics share price has been
    subject to some volatility on light trading, but managed to end 2002,
    30% above the issue price. The trading volumes indicate that shares
    are tightly held. The number of shareholders at the end of the
    quarter stood at 964, a slight increase (11%) since listing.

    Considerable efforts have been made, through the media and
    presentations, to broaden our appeal in the market, especially for
    institutional investors. We focus on the fact that the Cooper Basin
    HDR geothermal project represents an outstanding, medium to long term
    investment opportunity to meet the need for large scale, clean,
    zero-emission base load power at competitive cost. As part of this
    ongoing effort, a new brochure has been produced (see enclosure) and
    our website is regularly updated.

    Ongoing discussions are taking place with a number of potential
    cornerstone investors from the power industry. These efforts are
    designed to secure funds to:

    * Enable the Company to carry out the optimal work programme for
    Stage One, as set out in our Prospectus (August 2002);

    * Meet unforeseen programme expenses and overcome setbacks;

    * Ensure that Metasource does not take up their right to inject
    additional funds in return for direct equity participation in the
    Cooper Basin tenements.

    We have reason to be confident that we will succeed in this.

    Good progress was achieved in forging close ties with the Soultz
    project in France (EEIG) and with the Central Research Institute for
    the Electricity Industry (CRIEPI) in Japan. Geodynamics attended a
    board meeting of EEIG in Soultz and this has resulted in the
    formulation of a draft collaboration agreement, scheduled for
    completion during the current quarter. A second collaboration
    agreement between CRIEPI - CSIRO - Geodynamics is being finalised. As
    a small young company, Geodynamics' network of research and
    institutional and corporate support puts the Company in a uniquely
    favourable position. We like to think that this collaborative network
    is also an indirect confirmation of the potential of the Cooper Basin

    A recent publication has raised the link between HDR geothermal power
    generation and radioactivity. Shareholders should know that there are
    no environmental radioactive issues associated with HDR. The heat
    that is utilised by HDR is the same heat that has warmed the Earth
    for billions of years and makes the planet liveable today.
    Shareholders interested in details on this issue are referred to our
    website (see section FAQ's).

    As part of our commitment to transparency, Geodynamics has scheduled
    an open forum meeting on the Cooper Basin HDR project in Adelaide as
    well as in Innamincka.

    The AGM in November 2002 unanimously adopted all resolutions,
    including the resolution of the appointment of Dr Jack Hamilton from
    Metasource (Woodside) as a Director.

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