South African natural gas and helium producer Renergen has successfully raised A$10-million through an equity raise to fund developments at its Virginia gas project, in South Africa’s Free State.
The placement was subscribed to by existing and new domestic and international institutions and sophisticated investors.
Renergen will use the majority of the funds from the placement to accelerate exploration at its 100%-owned Virginia gas project, following exceptional drilling results which have delivered helium grades of as high as 12%.
Virginia currently boasts a 3.4% average concentration of helium.
The company will also use funds to progress the feasibility studies for Phase 2 of the Virginia project and replenish working capital, which was negatively impacted on by delays in activities as a result of the Covid-19-enforced lockdowns in the 2021 financial year.
Renergen CEO Stefano Marani enthuses that the company is “just scratching the surface of the potential at Virginia and with a primary focus on hitting our Phase 1 and 2 milestones”.
Renergen intends to take this opportunity to strengthen its balance sheet and accelerate exploration and development activities at Virginia.
“Importantly, Virginia is shaping up to be a world-class project and the funds raised will allow us to efficiently advance our busy work schedule over the coming six months, as we work towards [the start] of Phase 1 production,” Marani says.
With Renergen’s Evander proving another world-class helium show, the additional 52 000 ha of exploration rights may begin to “add an interesting dimension to this business medium term”.