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PRL the Early Mover in Green Hydrogen

June 15, 2021 | Price:$0.160

Province Resources (ASX:PRL) is aiming to develop Australia’s first truly Zero Carbon Green Hydrogen project. 

PRL has partnered with Total Eren, partly owned by Total S.A. – the fourth largest energy super major in the world. 

Green Hydrogen is a clean energy source, widely tipped to play a massive role in the world’s energy mix over the coming century. PRL is one of the earliest movers on the ASX in this sector. 

PRL’s project is located in Carnarvon, a place with lots of sun and wind, perfect for renewable energy generation. 

PRL is intending to use this abundant renewable energy to split water into hydrogen to supply domestic and Asian markets. 

Today PRL confirmed it is successfully engaging with the local communities, holding a stakeholder and community engagement meeting in Carnarvon. 

We added PRL to our Wise Owl portfolio on 17 February 2021, when it was trading at 2.6c. 

In April, PRL announced a binding MoU with renewable energy experts Total Eren – part owned by global energy super major Total SA. 

The intent of the MoU will be for Total Eren to fund, own and operate the upstream renewable power facility, and both partners (PRL and Total Eren) to own the downstream hydrogen production and distribution infrastructure 50/50:

Total Eren and PRL Deal Diagram

Whilst the deal is only at the MoU stage now – having a highly experienced, deep-pocketed project partner at this early stage is a large de-risking event for PRL.   

Since our April update, PRL has achieved the following key milestones: 

  • Signed an MoU with the Shire of Carnarvon: PRL and the Shire will also investigate the viability of a 12,311 ha area north of the Carnarvon township for development of project infrastructure.
  • Raised $18M at 15c per share: Heavily oversubscribed capital raise, led by ESG and other institutional funds. 
  • Scoping Study in progress: PRL has begun its Scoping Study, with results to feed into the next stage of project development.

Our Track Record 

Wise Owl makes around ten long term investments per year in carefully selected ASX companies and we share our analysis on why we are invested and the companies’ progress over the long term. 

Here are our current investments:

Wise-Owl Portfolio

Today’s PRL news

Getting a local community engaged early on a project is crucial to its success down the track. 

Last week PRL met with the local Carnarvon community, holding a successful early stage stakeholder and community engagement meeting.  

Local Council Meeting

PRL has also received letters of support from the Gascoyne Development Commission and the Shire of Carnavon highlighting their support, and identifying positive economic impacts that PRL’s project could deliver. 

PRL’s project has strong alignment with the WA Government’s State Hydrogen Strategy, so we are looking forward to seeing if PRL can engage the state government in a similar way to its success with local government. 

PRL is planning more stakeholder and community events later in the year. 

Green Hydrogen Macro news

There is plenty going on in the hydrogen space at the moment. Here’s a couple of headlines showing government backing:

Hydrogen Story 1

A new report from the International Renewable Energy Agency (IRENA) has spelled out why new policies are needed to help the sector grow quickly and according to IRENA, government policy will be crucial in the success of green hydrogen and the race to net zero.

Australia is already pledging support.

Prime Minister Scott Morrison is talking up Australia’s hydrogen plans at G7

Hydrogen Story 2

PRL’s latest news has coincided with Scott Morrison’s G7 pledge to develop lower emissions technology, suggesting there is the prospect of support for PRL type projects at federal government level as well as state level.

What to expect over the coming months from PRL: 

PRL’s medium term plans are fully funded, with PRL able to meet any capital requirements for scoping and feasibility studies at its green hydrogen project. 

Here’s what to expect in the coming months from PRL:

  • Wind and solar data collection – PRL is currently collecting wind and solar data to support renewable energy feasibility studies.  
  • Scoping Study – underway now. 
  • Finalisation of Total Eren deal – assuming the Scoping Study is positive, we would expect PRL to execute a full development agreement with Total Eren. 
  • Feasibility Studies – these are the next stage, and will build off the Scoping Study 
  • Initiate offtake discussions – PRL to start discussions with potential buyers and the owners of the Dampier-Bunbury Natural Gas Pipeline. 

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Disclaimer

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this report is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

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The information contained in this report is current at the finalised date. The information contained in this report is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

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