PERTH (miningweekly.com) – Canadian miner Ivanhoe Mines’ play to get a majority stake in ASX- and JSE-listed Renergen has failed.
The two companies in March this year announced a strategic investment agreement under which Ivanhoe obtained an initial 4.35% interest in Renergen for a $13-million investment.
Under the terms of the initial investment, Ivanhoe has the option to subscribe for up to 25% of the total issued and outstanding Renergen shares following a 120-day assessment period, at a 10% discount to the 30-day volume weighted average share price (VWAP), in consideration for cash or shares in Ivanhoe. Further to this second subscription, Ivanhoe will have the option to subscribe for up to 55% of the total issued and outstanding shares, at a 10% discount to the 30-day VWAP, to provide the equity funding for Phase 2 at the Virginia gas project.
Renergen on Monday told shareholders that the 120-day assessment period had passed without any of the strategic agreement conditions being reached, and as a result, the transaction could not progress.
“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 liquefied natural gas (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,” said Renergen CEO Stefano Marani.
“Importantly, it also must be noted that the equity funding for Phase 2 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 1 into production, progress other remaining transactions and to further resource expansion through additional drilling prior to assessing capital requirements for Phase 2,” said Marani.
Meanwhile, Ivanhoe president Marna Cloete said that the company was continuing to explore the potential for Renergen’s LNG to be part of a cleaner, reliable energy solution for the Platreef palladium, rhodium, nickel, platinum, copper and gold mine.
“We look forward to the Renergen team completing commissioning and ramping up the Phase 1 operation,” Cloete said.