The South African company, who is developing the country’s first commercial LNG project – the Virginia Gas Project, said it had raised AUS$10m ($7m) with oversubscriptions through the issue of 12.5 million shares at AUS$0.80 ($0.56).
“Renergen provides to investors a unique exposure to helium; a rare, finite commodity with strong demand and supply fundamentals,” Stefano Marani, CEO and Managing Director explained.
“Renergen owns 90% of Tetra4 Proprietary Limited (Tetra4), the holder of the first and only onshore petroleum production right in South Africa, giving it first mover advantage.”
“Renergen is developing South Africa’s first commercial LNG project, the Virginia Gas Project, which has one of the highest helium concentrations recorded globally.”
“The production right remains valid for a further 23 years and is situated in an energy scarce area with high customer density and limited competition.”
“The most compelling part of our story relates to the quality of our helium resource at a critical time when there is diminishing supply of such a strategic resource. “
“Helium is an irreplaceable element with multiple applications across cryogenics (MRIs), semi-conductor manufacturing, fibre optics and rocket launches.”
“The growing strategic importance of Renergen’s helium production is demonstrated by a commitment of $40m in debt funding from OPIC, the US Government’s development finance institution, to assist the Virginia Gas Project.”
Renergen said the funds raised will be used to finance the drilling of additional production wells in Tetra4’s proven gas reserves, aiming to produce gas to operate the new plant established at the Virginia Gas Project at maximum capacity.
The raise will also fund a feasibility study for the commercialisation of the high concentration helium reserves contained in the Virigina Gas project’s prospective sandstone deposit.
Chairman Brett Kimber added, “The company maintains a prominent position in the South African LNG and global helium markets through established gas sales agreements with the Linde Group, Anheuser-Busch and Black Knight Logistics, operated by its majority owned subsidiary, Tetra4.”