Renergen, the onshore helium and natural gas exploration company that plans to go into first production soon, said Ivanhoe Mines will not be lifting its shareholding in the company.
On May 14 Invanhoe became a 4.35 percent shareholder in Renergen, and the deal included a 120-day period for the fulfilment of conditions, including further due diligence and progressing various stakeholder and regulatory approvals, to finalise the strategic investment and co-operation agreement.
Through this agreement Ivanhoe would have been entitled to subscribe for up to 25 percent of the shares in Renergen, and then later, for up to 55 percent of the shares.
“The 120-day period wherein the fulfilment of the Strategic Agreement conditions had to be achieved has been reached, without meeting those conditions in full. Consequently, the transaction cannot progress further,” Renergen said in a statement on Friday.
Renergen’s share price fell 2.7 percent to R34.20 on Friday, but the price remains almost double the R17.24 that it traded at a year ago.
Ivanhoe President Marna Cloete said: “We are continuing to explore the potential for Renergen’s liquefied natural gas to be part of a cleaner, reliable energy solution for our Platreef palladium, rhodium, nickel, platinum, copper and gold mine.”
“We look forward to the Renergen team completing commissioning and ramping-up the Phase One operation,” she said.
Renergen CEO Stefano Marani said: “The equity funding for Phase Two operations at Virginia is only required in 2023, so premature dilution for existing shareholders wasn’t necessary.
“This presents a unique opportunity to commence generating revenue by bringing Phase One into production, progressing other remaining transactions and to further resource expansion through additional drilling prior to assessing capital requirements for Phase Two.”
He said once in operation, the Virginia Gas Project would become a globally significant LNG and helium producer and, importantly, will be coming online at a time when current global LNG and helium markets were in a shortfall and helium supply was “extremely tight”.
BUSINESS REPORT