ReNu Energy Limited (ASX:RNE) Sells Legacy Geothermal Assets
Asset Sale Details
ReNu Energy Limited (ASX:RNE) has finalised a deal to sell its legacy geothermal assets to Hydro Lit Pty Ltd for a total consideration of $700,000. The payment will be made in multiple tranches, consisting of cash and convertible notes issued by Hydro Lit.
Geothermal Assets Overview
The assets include data and samples from ReNu Energy’s previous geothermal operations in the Cooper Basin, South Australia, along with Geothermal Retention Licence 3 (GRL 3) and related infrastructure. These assets had previously been fully written down in the company’s accounts. The transfer of GRL 3 requires approval from the South Australian Minister for Energy and Mining.
Future Opportunities in Lithium
Interest in these geothermal assets has grown, primarily due to their potential to recover lithium from the fluid in the underlying granite of the region. Hydro Lit, focusing on becoming a leader in green lithium production, owns Australia’s largest lithium JORC Resource, totalling 25.2 million tonnes of lithium carbonate equivalent.
Executive Comments
Greg Watson, Managing Director of ReNu Energy, expressed satisfaction in creating value from the legacy geothermal assets. He stated, “We are pleased to be able to create value from the Company’s legacy geothermal assets and to ensure that the data and insights gained can be put to good use by Hydro Lit.” This structure allows ReNu Energy to benefit from Hydro Lit’s future valuation as it progresses in the lithium sector.
Hydro Lit’s Managing Director, Daniel Fraser, highlighted the importance of the acquisition, noting, “The data and insights we’ve acquired from ReNu Energy…mark a significant step towards achieving our vision.” He added that this acquisition accelerates Hydro Lit’s efforts to launch Australia’s first green lithium project globally.
Agreement Terms
The agreement stipulates that payment will be made in the form of cash and convertible notes across several tranches, contingent on key milestones related to the delivery of geothermal data and capital raising activities by Hydro Lit. This ensures ReNu Energy maintains exposure to Hydro Lit’s future growth while expecting its ownership interest to remain below 10% upon the conversion of convertible notes.
Motley Fool contributor Lianne Eastty has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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