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RENERGEN LIMITED
Incorporated in the Republic of South Africa
(Registration number: 2014/195093/06)
JSE Share code: REN
A2X Share code: REN
ISIN: ZAE000202610
LEI: 378900B1512179F35A69
Australian Business Number (ABN): 93 998 352 675
ASX Share code: RLT
(“Renergen” or “the Company”)
RENERGEN QUARTERLY UPDATE
Highlights from the quarter include:
• US DFC approved US$ 500 million loan for Phase 2 at both the credit committee and
board committee;
• US DFC Congressional notification process is now complete, and only standard project
finance conditions precedent, similar to those of Phase 1, remain outstanding;
• Standard Bank credit committee approved US$ 250 million loan for Phase 2;
• LNG offtake agreement secured with Timelink Cargo for Phase 1 offtake with supply
anticipated to commence in Q4 FY24
• LNG production increased 12.8% relative to the previous quarter, amounting to 823
tons;
• Helium cold box commissioning complete, identifying a leak in vacuum circuit which is
now under repair; and
• New well Morpheus drilled, producing 3.2% helium and flow of 70,000 standard cubic
feet per day.
Phase 2 Debt Funding
Early this quarter we announced that following several months of due diligence on site
studying the Phase 1 construction, geological and market conditions for helium and LNG with
the lenders, Tetra4’s Phase 2 of the Virginia Gas Project went through the respective credit
and board committees which resulted in positive approvals to proceed with the cumulative
loans of US$ 750 million. The final step in this process was for the US DFC to present the
transaction to Congress, and following the stipulated notification period with no objections, the
loans are now approved and subject to typical project finance conditions precedent which are
not substantially different to the Phase 1 US DFC loan’s conditions precedent. This is a major
step forward in de-risking Phase 2.
LNG Offtake Agreement
Early this quarter we announced that we had secured an additional contract for the supply of
LNG to a logistics operator Timelink Cargo. Timelink will convert a significant portion of their
trucking fleet to run on LNG. This is a fantastic step forward and aligns with our vision of
assisting in the decarbonisation of the logistics sector within South Africa. The agreement will
see Timelink invest in the dual fuel conversion kits and Tetra4 invest in the associated
LNG dispensing equipment required for installation within Timelink’s Johannesburg depot.
Project and Operations report
Production operations
Following the successful performance testing of the LNG train, the team is now significantly
more familiar with the operations of the LNG system and have improved production by a
further 12.8% relative to the previous quarter, producing 823 tons. We expect this trend to
continue over time until the plant reaches full capacity early next calendar year.
Helium Cold Box
Whilst preparing for helium performance testing for the purposes of achieving a taking over
certificate., we identified a defect reducing efficiency of the liquefaction process of the helium.
The helium cold box operates in a vacuum to optimise the insulation of the cold box. During
liquefaction the vacuum chamber showed signs of losing its vacuum. Upon inspection the
team has located the circuit containing the leak and the OEM has commenced with planning
and preparation for repairing of the leak. The repair will be done off-site in order to ensure
maximum safety of the helium cold box and avoid any contamination of equipment from the
elements. Given the nature of repair we envisage to recommence the performance testing of
the helium system in October 2023..
Stakeholders, including our helium customer, are fully aware of the situation and fully aligned
with the decision to affect the repair prior to commencing commercial deliveries to our
customer, as this presents the lowest risk strategy both for the plant and our shareholders.
The Virginia Gas Project’s Phase 2 development is not impacted by this process.
Morpheus
We drilled a twin of a historic blower in the southern part of the Phase 1 wells footprints and
the new well which is flowing at 70,000 standard cubic feet per day, with helium at a
concentration of 3.2%. This new well has highlighted some important characteristics on the
migration path of the gas in this portion of the field, and further down hole studies will be done
in order to map the geology in this section of the field to bolster our underground geological
model. The drilling of the well has cost ZAR1.8 million to date.
Licenses and Other Matters
We have allowed all our Technical Cooperation Permits (TCP) to lapse as we have determined
them to be of little to no value. The TCPs are identifiable in the diagram above, coloured in
blue.
Johannesburg
26 June 2023
Authorised by: Stefano Marani
Chief Executive Officer
Designated Advisor
PSG Capital
To readers reviewing this announcement on the Stock Exchange News Service (SENS), this
announcement may contain graphics and/or images which can be found in the PDF version
posted on the Company’s website.
www.renergen.co.za
Rule 5.5
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Name of entity
RENERGEN LIMITED
ABN Quarter ended (“current quarter”)
93998352675 31 May 2023
Current Year to date
quarter (3 months)
Consolidated statement of cash flows
ZAR’000 ZAR’000
1. Cash flows from operating activities
1.1 Receipts from customers 14 188 14 188
1.2 Payments for
(a) exploration & evaluation (12) (12)
(b) development - -
(c) production (3 685) (3 685)
(d) staff costs (4 170) (4 170)
(e) administration and corporate costs (19 665) (19 665)
1.3 Dividends received (see note 3) - -
1.4 Interest received 742 742
1.5 Interest and other costs of finance paid (72) (72)
1.6 Income taxes paid - -
1.7 Government grants and tax incentives - -
1.8 Other (provide details if material) –
- Restricted cash 10 682 10 682
1.9 Net cash used in operating activities (1 992) (1 992)
2. Cash flows from investing activities
2.1 Payments to acquire or for:
(a) entities - -
(b) tenements - -
(c) property, plant and equipment (33 019) (33 019)
(d) exploration & evaluation (2 020) (2 020)
(e) investments - -
(f) other non-current assets – other (2 141) (2 141)
intangible assets
ASX Listing Rules Appendix 5B (17/07/20) Page 1
+ See chapter 19 of the ASX Listing Rules for defined terms.
Appendix 5B
Mining exploration entity or oil and gas exploration entity quarterly cash flow report
Current Year to date
quarter (3 months)
Consolidated statement of cash flows
ZAR’000 ZAR’000
2.2 Proceeds from the disposal of:
(a) entities - -
(b) tenements - -
(c) property, plant and equipment - -
(d) investments - -
(e) other non-current assets - -
2.3 Cash flows from loans to other entities - -
2.4 Dividends received (see note 3) - -
2.5 Other (provide details if material) - -
2.6 Net cash used in investing activities (37 180) (37 180)
3. Cash flows from financing activities
3.1 Proceeds from issues of equity securities
(excluding convertible debt securities) - -
3.2 Proceeds from issue of convertible debt - -
securities
3.3 Proceeds from exercise of options 18 172 18 172
3.4 Transaction costs related to issues of equity - -
securities or convertible debt securities
3.5 Proceeds from borrowings 15 000 15 000
3.6 Repayment of borrowings (37 362) (37 362)
3.7 Transaction costs related to loans and
borrowings - -
3.8 Dividends paid - -
3.9 Other – lease payments (321) (321)
3.10 Net cash from financing activities (4 511) (4 511)
4. Net increase/(decrease) in cash and
cash equivalents for the period
4.1 Cash and cash equivalents at beginning of
period 55 704 55 704
4.2 Net cash used in operating activities
(item 1.9 above) (1 992) (1 992)
4.3 Net cash used in investing activities
(item 2.6 above) (37 180) (37 180)
4.4 Net cash from financing activities (item 3.10
above) (4 511) (4 511)
4.5 Effect of movement in exchange rates on
cash held 3 568 3 568
4.6 Cash and cash equivalents at end of
period 15 589 15 589
ASX Listing Rules Appendix 5B (17/07/20) Page 2
+ See chapter 19 of the ASX Listing Rules for defined terms.
Appendix 5B
Mining exploration entity or oil and gas exploration entity quarterly cash flow report
5. Reconciliation of cash and cash
equivalents Current Year to date
at the end of the quarter (as shown in the
quarter (3 months)
consolidated statement of cash flows) to the
ZAR’000 ZAR’000
related items in the accounts
5.1 Bank balances 9 245 9 245
5.2 Call deposits 6 344 6 344
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
5.5 Cash and cash equivalents at end of
quarter (should equal item 4.6 above) 15 589 15 589
6. Payments to related parties of the entity and their associates Current
quarter
ZAR’000
6.1 Aggregate amount of payments to related parties and their
associates included in item 1 655
6.2 Aggregate amount of payments to related parties and their
associates included in item 2 3 270
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a
description of, and an explanation for, such payments.
The amounts disclosed under 6.1 and 6.2 relate to remuneration paid to directors and prescribed
officers.
7. Financing facilities
Note: the term “facility’ includes all forms of
financing arrangements available to the
Total facility Amount drawn
entity.
amount at quarter at quarter
Add notes as necessary for an end end
understanding of the sources of finance ZAR’000 ZAR’000
available to the entity.
7.1 Loan facilities 953 741 953 741
7.2 Credit standby arrangements - -
7.3 Other (please specify) - -
7.4 Total financing facilities 953 741 953 741
7.5 Unused financing facilities available at quarter end -
7.6 Include in the box below a description of each facility above, including the lender, interest
rate, maturity date and whether it is secured or unsecured. If any additional financing facilities
have been entered into or are proposed to be entered into after quarter end, include a note
providing details of those facilities as well.
ASX Listing Rules Appendix 5B (17/07/20) Page 3
+ See chapter 19 of the ASX Listing Rules for defined terms.
Appendix 5B
Mining exploration entity or oil and gas exploration entity quarterly cash flow report
The foreign currency (US$) denominated loan included in the amount disclosed above was
translated at a rate of R19.7383/US$1 on 31 May 2023.
DFC Loan
Tetra4 entered into a US$40.0 million finance agreement with the US International
Development Finance Corporation (“DFC”) on 20 August 2019 (“Facility Agreement”). The
first draw down of US$20.0 million took place in September 2019, the second draw down of
US$12.5 million in June 2020 and the final drawdown of US$7.5 million on 28 September
2021. Tetra4 shall repay the loan in equal quarterly instalments of US$1.1 million (R21.7
million using the rate at 31 May 2023) on each payment date beginning on 1 August 2022
and ending on 15 August 2031. The loan is secured by a pledge of Tetra4’s assets under
construction, land and the Debt Service Reserve Account.
The first drawdown of $20.0 million attracts interest of 2.11% per annum. Interest on the
second and final drawdowns is 1.49% and 1.24% per annum, respectively. Interest is payable
by Tetra4 to the DFC quarterly on 15 February, 15 May, 15 August and 15 November of each
year (“Repayment Dates”) for the duration of the loan. This interest is capitalised to assets
under construction within property, plant and equipment in line with the Group policy. Interest
paid during the quarter totalled US$0.16 million (R3.1 million).
A guarantee fee of 4% per annum is payable by Tetra4 to the DFC on any outstanding loan
balance. The guarantee fee is payable quarterly on the Repayment Dates. Tetra4 paid
guarantee fees totalling US$0.37 million (R7.0 million) during the quarter.
A commitment fee of 0.5% per annum was payable by Tetra4 to the DFC on any undisbursed
amounts under the Facility Agreement. Commitment fees were payable quarterly on the
Repayment Dates. Tetra4 did not pay any commitment fees during the quarter as there were
no undrawn amounts during the period.
An annual maintenance fee of US$0.04 million is payable by Tetra4 to the DFC for the
duration of the loan term and is payable on 15 November of each year, commencing on 15
November 2020. The maintenance fee covers administrative costs relating to the loan. Tetra4
did not pay maintenance fees during the quarter.
The DFC loan outstanding at 31 May 2023 amounted to US$35.1 million (R704.1 million).
ASX Listing Rules Appendix 5B (17/07/20) Page 4
+ See chapter 19 of the ASX Listing Rules for defined terms.
Appendix 5B
Mining exploration entity or oil and gas exploration entity quarterly cash flow report
IDC loan
Tetra4 entered into a R160.7 million loan agreement with the IDC on 17 December 2021. An
amount of R158.8 million was drawn down on 22 December 2021 and is repayable in 102
equal monthly payments commencing in July 2023. The loan terms include a 12-month
interest capitalisation and an 18-month capital repayment moratorium. The loan accrues
interest at the prime lending rate plus 3.5% and is secured by a pledge of the Tetra4’s assets
under construction, land and the Debt Service Reserve Account. The IDC loan outstanding
at 31 May 2023 amounted to R181.8 million and interest capitalised to assets under
construction within property, plant and equipment in line with the Group policy amounted to
R6.7 million for the quarter.
Molopo loan
Tetra4 entered into a R50.0 million loan agreement with Molopo on 1 May 2013. This loan
was part of the conditions of the sale of shares in Tetra4 from Molopo to Windfall Energy
Proprietary Limited. The original loan term was for the period from inception of the loan on 1
May 2013 until 31 December 2022. During this period, the loan was unsecured and interest
free.
As the loan was not repaid on 31 December 2022, it now accrues interest at the prime lending
rate plus 2%. The loan is still unsecured and does not have repayment terms. The loan can
only be repaid when Tetra4 declares a dividend and utilising a maximum of 36% of the
distributable profits in order to pay the dividend. It is not expected that the loan will be repaid
in the next 12 months given the unavailability of distributable profits based on Tetra4's most
recent forecasts. As such, the loan has been classified as long term. The loan advanced to
Tetra4 by Renergen can only be repaid after the loan from Molopo has been settled.
Interest included in profit and loss amounted to R1.7 million. The loan amount outstanding at
31 May 2023 amounts to R52.8 million.
Debt covenants
The following debt covenants apply to the DFC loan:
a) Tetra4 is required to maintain at all times i) a ratio of all interest bearing Debt to EBITDA
of not more than 3.0 to 1; (ii) a ratio of Current Assets to Current Liabilities of not less than 1
to 1; and (iii) a Reserve Tail Ratio of not less than 25%.
(b) Tetra4 is required to maintain at all times (i) a ratio of Cash Flow for the most recently
completed four (4) consecutive full fiscal quarters, taken as a single accounting period, to
Debt Service for the most recently completed four (4) consecutive full fiscal quarters, taken
as a single accounting period, of not less than 1.30 to 1; and (ii) a ratio of Cash Flow for the
most recently completed four (4) consecutive full fiscal quarters, taken as a single accounting
period, to Debt Service for the next succeeding four (4) consecutive full fiscal quarters of not
less than 1.3 to 1.
(c) Tetra4 is required to ensure that the Debt Service Reserve Account is funded in the
aggregate of all amounts due to the DFC within the next 6 months.
The covenants in a) and b) will apply 18 months after the completion of the construction of
the Virginia Gas Plant. Tetra4 has complied with the covenant under c) above for the quarter
and believes that it will be able to comply with the covenants throughout the tenure of the
loan.
ASX Listing Rules Appendix 5B (17/07/20) Page 5
+ See chapter 19 of the ASX Listing Rules for defined terms.
Appendix 5B
Mining exploration entity or oil and gas exploration entity quarterly cash flow report
“Reserve Tail Ratio” means for any calculation date, the quotient obtained by dividing (a) all
of the Borrower’s remaining Proved Reserves as of such calculation date by (b) all of the
Borrower’s Proved Reserves as of the date of this Agreement.
The following debt covenants apply to the IDC loan.
a) Tetra4 is required to maintain the same financial and reserve tail ratios, and Debt Service
Reserve Account as mentioned under the DFC loan.
b) In addition, Tetra4 shall not make any shareholder dividend distribution, repay any
shareholders' loans and/or pay any interest on shareholders' loans or make any payments
whatsoever to its shareholders without the IDC’s prior written consent, if:
- Tetra4 is in breach of any term of the loan agreement; or
- the making of such payment would result in a breach of any one or more of the financial
ratios above.
The covenants in a) will apply from 1 August 2023. Tetra4 has complied with the covenant
under b) above for the quarter and believes that it will be able to comply with the covenants
throughout the tenure of the loan. Tetra4 also maintains a Debt Service Reserve Account with
respect to the IDC loan.
8. Estimated cash available for future operating activities ZAR’000
8.1 Net cash generated from operating activities (item 1.9) (1 992)
8.2 Payments for exploration and evaluation classified as investing
(2 020)
activities) (item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 8.2) (4 012)
8.4 Cash and cash equivalents at quarter end (item 4.6) 15 589
8.5 Unused finance facilities available at quarter end (item 7.5) -
8.6 Total available funding (item 8.4 + item 8.5) 15 589
8.7 Estimated quarters of funding available (item 8.6 divided by
3.89
item 8.3)
Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3,
answer item 8.7 as “N/A”. Otherwise, a figure for the estimated quarters of funding available
must be included in item 8.7.
8.8 If item 8.7 is less than 2 quarters, please provide answers to the following questions:
8.8.1 Does the entity expect that it will continue to have the current level of net operating
cash flows for the time being and, if not, why not?
Answer:
8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise further
cash to fund its operations and, if so, what are those steps and how likely does it
believe that they will be successful?
Answer:
ASX Listing Rules Appendix 5B (17/07/20) Page 6
+ See chapter 19 of the ASX Listing Rules for defined terms.
Appendix 5B
Mining exploration entity or oil and gas exploration entity quarterly cash flow report
8.8.3 Does the entity expect to be able to continue its operations and to meet its business
objectives and, if so, on what basis?
Answer:
Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above
must be answered.
Compliance statement
1 This statement has been prepared in accordance with accounting standards and policies which
comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Date: 30 June 2023
Authorised by: By the Board
(Name of body or officer authorising release – see note 4)
Notes
1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the
entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An
entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is
encouraged to do so.
2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions
in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash
Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting
standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.
3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities,
depending on the accounting policy of the entity.
4. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”.
If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the
[name of board committee – eg Audit and Risk Committee]”. If it has been authorised for release to the market by a
disclosure committee, you can insert here: “By the Disclosure Committee”.
5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as
complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and
Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial
records of the entity have been properly maintained, that this report complies with the appropriate accounting standards
and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a
sound system of risk management and internal control which is operating effectively.
ASX Listing Rules Appendix 5B (17/07/20) Page 7
+ See chapter 19 of the ASX Listing Rules for defined terms.
