Natural gas producer Renergen said on Thursday that its liquefied natural gas (LNG) deliveries had resumed following a planned maintenance outage, but gave no indication when helium production would start.
Renergen sells LNG to Italtile and Ardagh (formerly Consol Glass).
Some investors lost interest in Renergen after it missed its targets to start producing at least 300kg of helium per day in 2021, before missing another target in July 2022.
Renergen’s share price is much lower than its peak of R43, reached just less than two years ago and is down more than 31% so far in 2024. The share closed 2.48% higher at R10.76 on Thursday, after jumping nearly 7% in midmorning trade.
Renergen said that it had briefly produced helium in January 2023, which was halted due to technical glitches, although it is not entirely clear if it did in fact produce the gas.
Renergen, headed by CEO Stefano Marani, who lives in the US, said it was paying attention to the helium system following the successful repair and testing of the helium cold box, which went offline in 2023.
The small-cap player said it was waiting for the original equipment manufacturer from China to arrive in SA after the end of Chinese New Year celebrations.
“Once in the country, they will finalise the integration of the helium system into the overall plant and then undertake a final performance test to ensure the entire plant performs according to its original design,” the company said in a statement.
The company is increasingly drawing scepticism on social media as it has not shown it can produce gas and helium at reliable and consistent levels. Mining projects are high risk with many delays and investors want to see it deliver on its promises. However, some say delays are normal for a new energy development company.
Canadian miner Ivanhoe sold 20% of its 4.35% stake in the firm between November and January.
LNG is seen as a potential alternative to diesel and has a relatively low carbon footprint, while helium has a wide variety of applications, including being a critical ingredient in magnetic resonance imaging (MRI) scans used to diagnose patients with serious medical conditions.
Marani is drumming up financial support to push through phase 2 of its Virginia gas project.
The second phase of the project aims to catapult Renergen into a significant supplier of helium and LNG. However, it has battled to attract backing by large institutional investors, prompting the company to seek a third listing on the Nasdaq, where it believes the global helium market is better appreciated. It also has a listing in Australia.
The proposed Nasdaq listing of Renergen has been delayed after it was initially scheduled for 2023.
Renergen needs to raise $200m (R3.786bn) from the US listing or private investors as part of the conditions to access $750m in promised cash for further development of its reserves.
Update: February 15 2024
This story has been updated with new information.
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