THE BOURSE WHISPERER: Renascor Resources (ASX: RNU) announced a strategic partnership agreement with international Engineering, Procurement and Construction (EPC) contractor, Royal IHC Australia (Royal IHC).
Renascor Resources said the agreement would accelerate the development of the company’s Siviour graphite project in South Australia.
Under the terms of the agreement, Royal IHC, with the support of Brisbane-based engineering firm Wave International and Renascor, will establish an integrated team to deliver the Siviour Definitive Feasibility Study.
Royal IHC has also committed $1 million to undertake early project works, including metallurgical testing and detailed engineering and design work.
Renascor said the Strategic Partnership Agreement is the first step in what is planned to be a long and mutually beneficial relationship for both Renascor and Royal IHC, leading to project financing and completion of the Siviour project under an EPC contract.
“We are delighted to have entered into a strategic partnership with a high-quality global engineering partner such as Royal IHC,” Renascor Resources managing director David Christensen said in the company’s announcement to the Australian Securities Exchange.
“This is an innovative partnership that we expect will accelerate the development of the Siviour graphite project towards production.
“Royal IHC have demonstrated their strong belief in Siviour by contributing $1 million to undertake early works thereby ensuring we can continue to rapidly advance the DFS.”
Renascor explained that in the event the project proceeds, the agreement provides that Royal IHC will assist the company in obtaining project finance commitments to support the capital development of Siviour.
Such assistance is expected to include utilising Royal IHC’s Treasury team which has strong connections with major commercial banks and export credit agencies that may participate in project financing.
The agreement further provides that, in the event Renascor does not obtain financing for Siviour within three months after final regulatory approvals, IHC may convert its contribution into Renascor shares, subject to any necessary shareholder approvals, at the greater of Renascor’s current share price and the share price at time of conversion.