Renergen reveals lapse of Ivanhoe Mines share option

Natural gas and helium producer Renergen has announced that Ivanoe Mines will no longer be taking up its majority share option in the company as originally planned.

gasworld reported in March (2022) that Canadian mining company Ivanhoe Mines had acquired close to a 5% stake in Renergen, with scope to be a majority shareholder and ultimately holding a 55% stake in the firm.

The investment was described as being set to ‘greatly benefit’ Renergen’s Virginia Gas Project in South Africa’s Free State around the towns of Welkom, Virginia and Theunissen, which hopes to produce both liquid helium and LNG.

Read more: Ivanhoe Mines acquires 5% stake in Renergen

In an official investors update dated 15th July (2022), however, Renergen has announced that the option has lapsed.

Following Ivanhoe’s initial investment to become a 4.35% shareholder in Renergen in March, a 120-day period was agreed to for the fulfilment of all conditions, including inter alia, completion of further due diligence and progressing various stakeholder and regulatory approvals, to finalise the strategic investment and co-operation agreement.

Through the terms of the Strategic Agreement, Ivanhoe would be entitled to subscribe for such number of Shares as will, after their issue, result in Ivanhoe in aggregate holding 25% of the total issued share capital of Renergen on a fully diluted basis in the ‘Second Subscription’ and then a third subscription resulting in Ivanhoe holding 55% on a fully diluted basis.

Renergen

The 120-day period wherein the fulfilment of the Strategic Agreement conditions had to be achieved has now been reached, without meeting those conditions in full and Renergen has confirmed ‘the transaction cannot progress further’.

Renergen CEO Stefano Marani added in a statement, “Renergen is at an exciting point of the company’s history as we steadily march towards commencing production at our world-class Virginia Gas Project. Once in operation, the project will become a globally significant LNG and helium producer and importantly, will be coming online at a time when current global LNG and helium markets are in a shortfall and helium supply remains extremely tight.”

“Importantly, it also must be noted that 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, progress other remaining transactions and to further resource expansion through additional drilling prior to assessing capital requirements for Phase Two.”

Ivanhoe President Marna Cloete affirmed, “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.”