Ivanhoe Mines dumps Renergen shares

Canadian miner Ivanhoe Mines sold a significant portion of its stake in Renergen in December 2023, according to Cilandia Capital activist investment manager Albie Cilliers.

Cilliers revealed in a social media post that Ivanhoe Mines had sold 186,192 Renergen shares In December, reducing its stake in the company to 5.45 million shares.

He confirmed to Daily Investor that this information was obtained from the SA securities register of Renergen as of 29 December 2023 and that this was the first time Ivanhoe had reduced its interest in the company.

Ivanhoe had initially acquired a significant stake in Renergen in 2022 following a deal between the two companies that fell flat in the same year.

Renergen announced in March 2022 that Ivanhoe Mines had secured options to use electricity generated from renewable, green, solar power and liquefied natural gas (LNG) to power its tier-one Platreef project in South Africa. 

The company said Ivanhoe expected its Platreef mine to require approximately 30 MW of installed electrical power for its Phase 1 operations and approximately 100 MW for its Phase 2 operations at full production. 

“In addition to moving forward on constructing its first solar-power facility at the Platreef mine, Ivanplats has acquired the exclusive right to negotiate an offtake agreement with South Africa-based Renergen,” the company said.

This agreement was for electricity generated from Renergen’s gas and solar hybrid-power facility to be constructed at the Virginia Gas Project.

The Virginia Gas Project is located in South Africa’s Witwatersrand Basin, approximately 600 km southwest of the Platreef mine.

“Ivanhoe believes the electricity generated from Renergen’s gas and solar hybrid-power facility could be combined with Ivanhoe’s solar power facilities to provide Platreef with an uninterruptible power supply to meet the mine’s baseload requirements,” Renergen said. 

“Ivanhoe has made an initial equity investment in Renergen of approximately $13 million, which gives Ivanhoe a 4.35% interest in Renergen.”

However, in July 2022, Renergen informed shareholders that the deal between the two companies had fallen flat.

Renergen explained that following Ivanhoe’s initial investment to become a 4.35% shareholder in Renergen, a 120-day period was agreed to “for the fulfilment of all conditions”.

These conditions included completing further due diligence and progressing various stakeholder and regulatory approvals to finalise the strategic investment and cooperation agreement.

However, Rernegen said the 120-day assessment period expired without meeting the agreement conditions, leading to the termination of the transaction.

“The 120-day period wherein the fulfilment of the Strategic Agreement conditions had to be achieved has been reached without meeting those conditions in full,” Renergen said. 

“Consequently, the transaction cannot progress further, and the Second Subscription (to 25%) and Third Subscription (to 55%) proposed in the Strategic Agreement are no longer applicable and have lapsed.”

Ivanhoe president Marna Cloete said the company continued to explore “the potential for Renergen’s liquefied natural gas to be part of a cleaner, reliable energy solution for our Platreef mine”. 

“We look forward to the Renergen team completing commissioning and ramping up the Phase One operation,” Cloete said.

Daily Investor reached out to Renergen and Ivanhoe Mines for comment but did not receive a response from either.