Amur Minerals — Gaining traction

Amur Minerals (LN: AMC)

Last close As at 27/03/2024

1.46

0.00 (0.00%)

Market capitalisation

21m

More on this equity

Research: Metals & Mining

Amur Minerals — Gaining traction

On 26 February, Amur announced the long-awaited results of its updated pre-feasibility study (PFS) into its Kun-Manie project in Russia’s Far East. In contrast to previous studies, the PFS considered just two options, namely a toll smelt option and a low-grade matte option, and dispensed with the high-grade matte and refinery options. Detailed financial models are not yet available. However, both considered a 6Mtpa mining operation and results are comparable to those published by Edison in our note, Cobalt-plated nickel, published on 16 April 2018.

Lord Ashbourne

Written by

Lord Ashbourne

Director of Content, Mining

Metals & Mining

Amur Minerals

Gaining traction

Updated PFS results

Metals & mining

27 February 2019

Price

3.3p

Market cap

£23m

US$1.3187/£

Net cash (US$m) at 30 June 2018

3.4

Shares in issue

699.1m

Free float

99.5%

Code

AMC

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(2.7)

2.9

(40.4)

Rel (local)

(7.0)

1.0

(39.1)

52-week high/low

5.6p

2.7p

Business description

Amur Minerals is an exploration and development company focused on base metal projects in Russia’s Far East. The company’s principal asset is the Kun-Manie nickel sulphide deposit in the Amur Oblast, comprising over a million tonnes of contained nickel in at least five deposits.

Next events

FY18 results

June 2019

Analyst

Charles Gibson

+44 (0)20 3077 5724

Amur Minerals is a research client of Edison Investment Research Limited

On 26 February, Amur announced the long-awaited results of its updated pre-feasibility study (PFS) into its Kun-Manie project in Russia’s Far East. In contrast to previous studies, the PFS considered just two options, namely a toll smelt option and a low-grade matte option, and dispensed with the high-grade matte and refinery options. Detailed financial models are not yet available. However, both considered a 6Mtpa mining operation and results are comparable to those published by Edison in our note, Cobalt-plated nickel, published on 16 April 2018.

Year
end

Revenue
(US$m)

PBT*
(US$m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

12/16

0.0

(3.8)

(0.7)

0.0

N/A

N/A

12/17

0.0

(1.9)

(0.3)

0.0

N/A

N/A

12/18e

0.0

(2.7)

(0.4)

0.0

N/A

N/A

12/19e

0.0

(3.7)

(0.5)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Good comparability to earlier estimates

Amur’s updated PFS on the toll smelt option calculated an NPV10 of US$614.5m and an IRR of 29.3% at a nickel price of US$8.00/lb (US$17,640/t) cf a spot price at the time of writing of US$5.88/lb (US$12,975/t). That compares with an Edison calculated NPV10 of US$398.0m at a nickel price of US$7.50/lb in April 2018 or US$533.7m at US$8.00/lb Ni. Its updated PFS on the low-grade matte option calculated an NPV10 of US$987.4m and an IRR of 34.7% at US$8.00/lb, which compares with an Edison calculated NPV10 of US$822.2m at US$7.50/lb Ni or US$967.2m at US$8.00/lb Ni. Initial capex for the toll smelt option is estimated at US$570.4m cf US$541.8m in our comparable model. For the low-grade matte option, it is US$695.0m cf our US$660.0m. C1 cash costs were estimated to be US$3.87/lb and US$2.34/lb for the toll smelt and low-grade matte scenarios, respectively, putting both in the second lowest-cost quartile globally.

Valuation: 8.7–22.5cps cf a share price of 4.4c

In our report, Gold stars and Black holes: Analysing the discount: From resource to sanction, published in January 2019, we calculated that, excluding outliers, the average value of companies with projects at PFS stage is 9.9% of attributable NPV, with a range between -15.4% and 51.3%. On the basis of Amur’s published NPVs (at US$8.00/lb Ni), this would imply a valuation for the company of US$60.8m (or 8.7c/share) based on the toll smelt option, or US$97.8m (or 14.0c/share), based on the low-grade matte option. However, given the relationship between valuations and IRRs seen in our report, coupled with both scenarios’ high IRRs, these percentages could increase to 13.0% for the toll smelt option and 15.9% for the low-grade matte option, implying valuations of US$79.9m (or 11.4c/share) and US$157.0m (or 22.5c/share), respectively. These compare with valuations calculated in our April 2018 note of 15c and 27c respectively, based on a 10% discount rate applied to forecast dividends (although these were calculated at a nickel price of US$7.50/lb and assumed equity dilution at a 4.4p share price). Note that our detailed valuations will be updated as soon as practicably possible.

Exhibit 1: Financial summary

US$'000s

2010

2011

2012

2013

2014

2015

2016

2017

2018e

2019e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

0

0

0

0

0

0

0

0

0

0

Cost of Sales

0

0

0

0

0

0

0

0

0

0

Gross Profit

0

0

0

0

0

0

0

0

0

0

EBITDA

 

 

(1,928)

(2,892)

(1,750)

(2,539)

(2,358)

(4,114)

(3,768)

(1,924)

(2,236)

(3,768)

Operating Profit (before GW and except.)

(1,928)

(2,892)

(1,750)

(2,539)

(2,358)

(4,114)

(3,768)

(1,924)

(2,236)

(3,768)

Intangible Amortisation

0

0

0

0

0

0

0

0

0

0

Exceptionals

(328)

(1,505)

(435)

(151)

1,158

1,184

(2,007)

767

0

0

Other

0

0

0

0

0

0

0

0

0

0

Operating Profit

(2,256)

(4,397)

(2,185)

(2,690)

(1,200)

(2,930)

(5,775)

(1,157)

(2,236)

(3,768)

Net Interest

0

(211)

(1,813)

(1,141)

(161)

2,224

4

3

(452)

33

Other

0

0

0

0

0

0

0

0

0

0

Profit Before Tax (norm)

 

 

(1,928)

(3,103)

(3,563)

(3,680)

(2,519)

(1,890)

(3,764)

(1,921)

(2,688)

(3,735)

Profit Before Tax (FRS 3)

 

 

(2,256)

(4,608)

(3,998)

(3,831)

(1,361)

(706)

(5,771)

(1,154)

(2,688)

(3,735)

Tax

0

0

0

0

0

0

0

0

0

0

Profit After Tax (norm)

(1,928)

(3,103)

(3,563)

(3,680)

(2,519)

(1,890)

(3,764)

(1,921)

(2,688)

(3,735)

Profit After Tax (FRS 3)

(2,256)

(4,608)

(3,998)

(3,831)

(1,361)

(706)

(5,771)

(1,154)

(2,688)

(3,735)

Average Number of Shares Outstanding (m)

193.9

271.8

345.1

387.2

431.2

445.7

547.9

613.3

660.2

692.5

EPS - normalised (c)

 

 

(1.0)

(1.1)

(1.0)

(1.0)

(0.6)

(0.4)

(0.7)

(0.3)

(0.4)

(0.5)

EPS - FRS 3 (c)

 

 

(1.2)

(1.7)

(1.2)

(1.0)

(0.3)

(0.2)

(1.1)

(0.2)

(0.4)

(0.5)

Dividend per share (c)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Gross Margin (%)

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

EBITDA Margin (%)

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Operating Margin (before GW and except.) (%)

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

BALANCE SHEET

Fixed Assets

 

 

14,151

13,903

17,928

18,955

12,035

12,162

19,903

25,260

27,944

35,612

Intangible Assets

13,685

13,503

17,084

18,318

11,783

11,513

17,167

22,376

24,964

24,964

Tangible Assets

466

400

844

637

252

649

2,736

2,884

2,980

10,648

Other receivables

0

0

0

0

0

0

0

0

0

0

Current Assets

 

 

7,215

7,386

8,389

11,074

9,090

11,355

9,723

4,065

3,740

1,510

Stocks

167

165

224

269

237

512

756

769

769

769

Trade Debtors

0

0

0

0

0

0

0

0

0

0

Cash

3,066

4,436

2,048

2,392

1,389

9,613

8,199

2,555

2,230

0

Other receivables/other

3,982

2,785

6,117

8,413

7,464

1,230

768

741

741

741

Current Liabilities

 

 

(109)

(102)

(119)

(123)

(407)

(539)

(416)

(768)

(768)

(9,537)

Creditors

(109)

(102)

(119)

(123)

(407)

(539)

(416)

(768)

(768)

(768)

Short term borrowings

0

0

0

0

0

0

0

0

0

(8,769)

Long Term Liabilities

 

 

0

0

0

0

0

(509)

(3,461)

(176)

(176)

(176)

Long term borrowings

0

0

0

0

0

0

0

0

0

0

Other long term liabilities

0

0

0

0

0

(509)

(3,461)

(176)

(176)

(176)

Net Assets

 

 

21,257

21,187

26,198

29,906

20,718

22,469

25,749

28,381

30,740

27,409

CASH FLOW

Operating Cash Flow

 

 

(1,201)

(2,761)

(1,071)

(1,556)

(1,960)

(3,090)

(2,210)

(2,703)

(2,236)

(3,768)

Net Interest

0

0

0

0

0

0

4

3

(452)

33

Tax

0

0

0

0

0

0

0

0

0

0

Capex

(492)

(20)

(3,482)

(2,315)

(748)

(2,751)

(4,533)

(3,704)

(2,684)

(7,668)

Acquisitions/disposals

363

0

0

0

0

0

0

0

0

0

Financing

3,527

4,344

2,165

4,242

1,841

14,407

6,589

570

5,046

404

Dividends

0

0

0

0

0

0

0

0

0

0

Net Cash Flow

2,197

1,563

(2,388)

371

(867)

8,566

(150)

(5,834)

(326)

(10,999)

Opening net debt/(cash)

 

 

(997)

(3,066)

(4,436)

(2,048)

(2,392)

(1,389)

(9,613)

(8,199)

(2,555)

(2,230)

HP finance leases initiated

0

0

0

0

0

0

0

0

0

0

Other

(128)

(193)

0

(27)

(136)

(342)

(1,264)

190

0

0

Closing net debt/(cash)

 

 

(3,066)

(4,436)

(2,048)

(2,392)

(1,389)

(9,613)

(8,199)

(2,555)

(2,230)

8,769

Source: Company sources, Edison Investment Research

General disclaimer and copyright

This report has been commissioned by Amur Minerals and prepared and issued by Edison, in consideration of a fee payable by Amur Minerals. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the Edison analyst at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd who holds an Australian Financial Services Licence (Number: 427484). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

Neither this document and associated email (together, the "Communication") constitutes or form part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares in the Company in the proposed placing should be made solely on the basis of the information to be contained in the admission document to be published in connection therewith.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document (nor will such persons be able to purchase shares in the placing).

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a) (11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Amur Minerals and prepared and issued by Edison, in consideration of a fee payable by Amur Minerals. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the Edison analyst at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd who holds an Australian Financial Services Licence (Number: 427484). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

Neither this document and associated email (together, the "Communication") constitutes or form part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares in the Company in the proposed placing should be made solely on the basis of the information to be contained in the admission document to be published in connection therewith.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document (nor will such persons be able to purchase shares in the placing).

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a) (11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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Renergen — OPIC funding a key endorsement

Renergen has announced that US government agency, Overseas Private Investment Corporation (OPIC), has approved a US$40m loan facility in favour of the Renergen subsidiary Tetra4’s Virginia gas field project. The funds, which have a 12-year term and 30 months’ grace period, are to be utilised for the first phase of development and commercialisation of a 36.4bcf natural gas and 0.87bcf helium field in South Africa’s Free State province. First phase development includes the construction and operation of a 52km gas gathering system and new liquefied natural gas (LNG) and helium liquefaction plant. Renergen now has funding in place for phase one development providing visibility on first gas sales, which we currently assume at the end of 2020. Our last published NAV valuation stood at ZAR21.8/share based on a 15% discount rate and US$280/mcf crude helium price. Renergen is looking at an Australian Stock Exchange (ASX) dual listing to increase liquidity. We expect further details to be released in early 2019.

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