It hasn’t been a secret: Renergen has needed to find a funding solution to fully develop the exciting Virginia Gas Project. Instead of a rights offer, Renergen has found a strategic investor.
Ivanhoe Mines (listed in Canada and with existing mining operations in South Africa) has become a 4.35% shareholder in Renergen at a 5% discount to the 30-day volume weighted average price (VWAP). That’s only part of the story.
There is a pathway for Ivanhoe to increase its shareholding to 25%, this time at a 10% discount to the 30-day VWAP. This option is open to Ivanhoe after the completion of a 120-day due diligence period that commences immediately.
That’s not all, folks.
If Ivanhoe goes ahead with the 25% deal, there is a further option to increase the shareholding to 55%. This would once again be at a 10% discount to the 30-day VWAP and the funds would be used to develop and up-scale the Virginia Gas Project. If that goes ahead, Ivanhoe will be entitle to appoint the majority of the members of the board.
This brings a North American investor onto the register and gives Renergen access to significant capital for the phase 2 development.
The initial tranche raises an equivalent of just over R200 million. The final tranche is much bigger of course, up to USD250 million (the currency is really important here).
Ivanhoe is currently focused on the strategic minerals needed for the electric phase of our energy evolution. These include copper, nickel and platinum group metals. Helium will now be added to the mix.
As part of the deal, Ivanhoe’s platinum subsidiary has the sole right to negotiate to be the offtaker for the power generated by the gas and solar hybrid power facility anticipated during Phase II of the Virginia Gas Project.
The initial subscription for a 4.35% stake did not require shareholder approval. The subsequent transactions do, so Renergen is preparing a circular that will be sent out in due course.
The share price rallied 4.4% in response to the news.
