Canada’s Ivanhoe eyes controlling stake in South Africa’s Renergen

Canadian mining company Ivanhoe Mines could acquire a controlling stake in South Africa’s Renergen, the developer of the Virginia LNG and helium development, after taking a 4.35 percent stake.

Ivanhoe said in a statement it has made an initial equity investment in Renergen of about $13 million, which gives the firm an approximate 4.35 percent interest in Renergen’s issued and outstanding shares.

The Canadian firm also has the right to nominate one director to Renergen’s board of directors.

Under the terms of the initial investment, Ivanhoe has the option to subscribe for up to 25 percent of the total issued and outstanding Renergen shares following the assessment period, at a 10 percent discount to the 30-day VWAP, in consideration for cash or shares in Ivanhoe.

$250 million

Further to this second subscription, Ivanhoe said it would have the option to subscribe for up to 55 percent of the total issued and outstanding shares, at a 10 percent discount to the 30-day VWAP, to provide the equity funding for Phase 2 at the Virginia gas project.

Ivanhoe would spend up to $250 million to buy the controlling stake.

Renergen recently signed another liquefied natural gas supply deal for its Virginia LNG and helium development.

The firm will supply LNG from the first phase of its project to Johannesburg-based tile manufacturer and a unit of Italtile, Ceramic Industries.

This deal marked the second and final industrial contract from the first phase of the Virginia LNG project.

Last year, the natural gas and helium producer revealed it had signed its first LNG supply deal for its project with Consol Glass.

Also, a unit of Italian contractor Saipem said last year it had won a front-end engineering and design contract for the second phase of Renergen’s project.

The second phase would significantly boost LNG volumes for distribution in South Africa while helium would go for exports, according to Renergen.

Power for Platreef project

Ivanhoe said it has now secured options to use electricity generated from solar power together with LNG to power its Platreef palladium, rhodium, nickel, platinum, copper and gold project in South Africa.

Ivanhoe expects to start construction on its first solar power plant at the Platreef mine next month.

The initial 5-megawatt (MW) plant would begin supplying solar-generated electricity to the mine in early 2023, it said.

The firm indirectly owns 64 percent of the Platreef project through its subsidiary, Ivanplats, and is directing all mine development work.

As part of the deal with Renergen, Ivanplats has acquired the exclusive right to negotiate an offtake agreement with Renergen for electricity generated from the latter’s gas and solar hybrid-power facility to be constructed at the Virginia gas project in Witwatersrand Basin.

The electricity generated from Renergen’s facility could be combined with Ivanhoe’s solar power facilities to provide Platreef with an uninterruptible power supply to meet the mine’s base-load requirements, it said.

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