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Monday, March 14, 2022
Natural gas and helium producer, Renergen Limited, announced a significant investment in the company by Ivanhoe Mines Limited (Ivanhoe) to support its Virginia Gas Project in South Africa through a placement of 5,631,787 shares at R35.625 per share, a discount of 5% to the 30 day VWAP, raising an equivalent of ZAR200.6 million (equivalent to US$13.3, AUD18.3 million).
The placement is within the Company’s existing pre-approved placement capacity, but importantly Ivanhoe will acquire an initial strategic shareholding in the Company and, subject to its evaluation of the Company and scalability of operations, may thereafter become a strategic partner and major shareholder in Renergen. The conditional option provides for funding of up to US$250 million (or greater at Ivanhoe’s election) towards up-scaling of the Virginia Gas Project (“Virginia Gas Project”) following the imminent commissioning and commencement of Phase 1 commercial production.
Ivanhoe is a Canadian-listed, African-focused natural resources development company, led by its founder, Executive Co-Chairman, Mr Robert Friedland. Mr Friedland has an unparalleled track record in the discovery and development of major natural resource projects around the globe, including the current major development in South Africa at Platreef.
The Virginia Gas Project comprises exploration and production rights of 187 000 ha of gas fields across Welkom, Virginia and Theunissen, in the Free State. The source of the Virginia Gas Project’s natural gas is primarily microbial. It originates from deep within the Witwatersrand Supergroup, via groundwater circulating through large faults and contacting bacteria deep within the earth’s crust. This means the methane is a biogenic and a continuing renewable resource.
The strategic investment in Renergen highlights the excellent growth of the Company over the last two years and the potential of the Virginia Gas Project to become a globally significant LNG and Helium operation.
Commenting on the major agreement between Renergen and Ivanhoe, Dr David King, Chairman of Renergen, said “Ivanhoe is an ideal partner to stand alongside Renergen in the development of its world class helium reserves at Virginia. The strategic partnership with Ivanhoe is testament to the great progress that Renergen has made in its transition from explorer to developer of an internationally significant resources project.”
CEO Stefano Marani added: “This major transaction is a landmark deal for Renergen and one that recognizes strong synergies with our new partners, Ivanhoe. Robert Friedland is a leader in
terms of finding and developing disruptive, world-class resources across a broad range of commodities and jurisdictions, and to secure his potential backing of the Virginia Gas Project is testament not only to the work done to date, but also to the incredible opportunity to establish a South African-based globally significant LNG and helium production operation. I am very proud to welcome Ivanhoe as a shareholder in Renergen.
Aside from the teams collaborating really well, Ivanhoe already has extensive mining operations in South Africa and as the transaction goes through the motions of implementation, new exciting areas of collaboration are being uncovered every day. The future for Renergen is very exciting and I look forward to progressing our Virginia Gas Project and working side-by-side with Robert and Ivanhoe to deliver further value to all our stakeholders”.
Robert Friedland, Ivanhoe Mines’ Executive Co-Chair, commented: “In Ivanhoe Mines’ journey toward net zero carbon emissions, liquefied natural gas is a compelling transition fuel to provide base-load power for our Tier-One Platreef palladium, rhodium, nickel, platinum, copper and gold mine. Renergen’s Virginia Gas Project has the potential to provide clean, reliable electricity to augment our own solar-generated power for a 24-hour-a-day alternative to the coal-fired national electrical grid.”
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