High Peak Royalties (ASX:HPR) Sells Geothermal Assets to Northstar Energy
Transaction Overview
High Peak Royalties Limited has sold its wholly owned subsidiary, Torrens Energy (SA) Pty Ltd, to Northstar Energy Limited. The sale includes Geothermal Energy Licenses 571, 572, 573, 574, and related applications. The consideration comprises 12,500,000 Completion Shares and a 1.0% gross royalty on geothermal energy produced, valued at over $2,000,000. The transaction will be completed in two tranches, with the second tranche subject to ministerial consent.
Strategic Partnership
Alongside the sale, High Peak and Northstar have established a strategic partnership. High Peak will appoint a non-executive director to Northstar’s board and commit a minimum of $150,000 to Northstar’s proposed IPO in 2025, with an option to invest up to $750,000. Additionally, High Peak will leverage its industry expertise to support Northstar’s development plans and facilitate funding and investor attraction.
Executive Comments
High Peak Royalties Executive Chairman Mr James Knowles stated, “I am very pleased with the sale of Torrens Energy to Northstar – our team has done a tremendous job in negotiating and executing this transaction, which represents a strategic step forward for High Peak by aligning the Torrens geothermal assets with a company that has the expertise, focus, and resources to develop them to their full potential. The transaction removes the complexity of direct resource ownership to High Peak and focuses its asset base wholly on royalties and is aligned with the core objective of developing High Peak to become a meaningful royalty Company, whilst providing an opportunity to retain a meaningful exposure to the future success of these assets through the agreed royalties and equity holding in Northstar. I am particularly excited about our Strategic Partnership with Northstar. Northstar’s strategic goal to produce base load renewable electricity and clean fuels positions it uniquely to harness the geothermal resources within these assets as part of its broader strategic objectives at a time where the renewable energy sector is evolving rapidly. Northstar is positioning itself at the forefront of developing geothermal and hydrothermal energy production projects in Australia, which through its ownership and Strategic Partnership with Northstar, High Peak will have the opportunity to participate and maintain its exposure to these positive developments, whilst achieving its core objective of becoming a meaningful royalty company.”
Motley Fool contributor Abbie Stokes 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 recommended BHP Group. 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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