Renergen closer to first helium production

RENERGEN, the natural gas and helium mining development company, said yesterday that it was making strong progress in commissioning Phase One of its Virginia Gas Project.

First production from the Virginia project, the first of its kind in South Africa, is crucial for Renergen’s future – the company yesterday reported a preliminary unaudited 20.7 percent decline in its loss for the 12 months to February 28, to R33.8 million.

“The cold boxes are in the process of being purged and pre-cooled using liquid nitrogen, an important process in preparing the units for acceptance of gas from the field in the coming week,” chief executive Stefani Marani said in an announcement yesterday.

“We have already completed and commissioned fire protection, Instrument air systems and various smaller subsystems.

“The conduction oil system is the next major item to be completed for process unit start up,” he said.

He said a key focus area that had been completed was testing of the fire systems, which had been important in light of all the recent plant failures globally.

The company had made a final drawdown of R112.1 million on the loan facility from the US International Development Finance Corporation in September 2021 and acquired a new loan from the Industrial Development Corporation of R160.7m in December 2021, of which R158.8m was drawn down at year end, with some of it used to fund investments in the company and intangible assets.

Tangible net asset value per share increased 33.1 percent to 106.74 cents from 80.21c.

This increase was driven mainly by additional investments in property, plant and equipment, increases in the deferred tax asset, working capital and restricted cash and a decrease in lease liabilities, offset by increases in borrowings and provisions and cash utilisation. The share capital also increased by 6.4 million shares during the year.

“The transition from largely a project company to an operational focused company is well underway,” said Marani.

Highlights for the year included five out of six drilling successes from the exploration campaign, securing a pre-paid forward sell agreement with Argonon Helium which will also issue helium backed tokens known as ArgHes, a significant increase in proven reserves and completion of a Phase 2 Front End Engineering Design study.

The share price was 3.21 percent lower at R40.46 just after midday yesterday. It closed 4.31 percent lower at R40 on the JSE.