Province Resources  ASX:PRL

Company

Current Price

Initial Coverage

Date

Price

Initial Entry Price

Returns from Initial Entry

$ 0.078

17-Feb-21

$ 0.026

$ 0.015

420%

Report Date Price Current Return
Province Resources Leads Australia into a Green Hydrogen Era 17-Feb-21 $0.026 200%
Wise-Owl is now Free Forever – Here is Our First Stock Pick 17-Feb-21 $0.026 200%
How Our Investments Performed in Q1 of 2021 21-Apr-21 $0.235 -67%
PRL Signs Binding MoU with Total Eren to Develop Green Hydrogen Project 22-Apr-21 $0.215 -64%
PRL the Early Mover in Green Hydrogen 15-Jun-21 $0.160 -51%
A New Market for PRL’s Hydrogen 09-Aug-21 $0.147 -47%
What have our portfolio companies been doing? (Part 1) 10-Nov-21 $0.185 -58%
PRL Announces Scoping Study, 550kt per annum of Green Hydrogen 02-Mar-22 $0.125 -38%
PRL Secures Native Title Consent for HyEnergy Project Land Access 06-Jul-22 $0.068 15%

ASX:PRL

Returns from Initial Entry

420%

Current Price

$ 0.078

First Coverage

17-Feb-21

$ 0.026

Initial Entry Price

$ 0.015

Returns from Initial Entry

420%

Past Coverage
Province Resources Leads Australia into a Green Hydrogen Era
Wise-Owl is now Free Forever – Here is Our First Stock Pick
How Our Investments Performed in Q1 of 2021
PRL Signs Binding MoU with Total Eren to Develop Green Hydrogen Project
PRL the Early Mover in Green Hydrogen
A New Market for PRL’s Hydrogen
What have our portfolio companies been doing? (Part 1)
PRL Announces Scoping Study, 550kt per annum of Green Hydrogen
PRL Secures Native Title Consent for HyEnergy Project Land Access

Overview

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

What is the macro theme behind PRL?

Decarbonisation using the latest green hydrogen technology.

As the world looks to cut its greenhouse gas emissions, green hydrogen may prove to be a major building block of a net-zero economy.

Industrial applications and large transport (like buses and trucks), and heavy industry applications like steel mills are the most likely candidates to start using this technology in the near future.

Investment Memo: Province Resources Ltd (ASX:PRL)

12-Jan-2022


Why did we invest?

  • Project set up by the people behind Vulcan Energy Resources (one of our most successful investments)
  • Ideal location for the project – PRL’s project is located in the Gascoyne region of WA, next to the town of Carnarvon. Gascoyne is a particularly sunny and windy area (ideal for green energy support) and coastal (important to build a hydrogen plant to undertake hydrolysis). The town of Carnarvon also has a gas pipeline.
  • Australia is aiming for net zero emissions by 2050, with particular targeted investments in hydrogen and we think PRL can be part of the solution.
  • PRL has a pathway to financing through their potential joint venture partner Total Eren.

What do we expect the company to deliver in 2022?

Objective #1 Deliver scoping study to better determine the commerciality of PRL’s project. ✅

Objective #2 Secure land tenure and key stakeholder support for the project, including a Heritage Agreement, Environmental Impact Assessment and other necessary permits so that the project can proceed.

Objective #3 – Begin Pre-Feasibility Study (PFS) – with a Scoping Study, land tenure and stakeholder support, the start of the PFS would enable PRL to get to work on understanding the specific factors needed in development to deliver an economic green hydrogen project in WA.

[NEW] Objective #4 – With PRL announcing the completion of the scoping study on 2nd March 2022, we next want to see PRL solidify its commitment from Total Eren to further develop the project.

Updated March 2nd 2022

What could go wrong?

  • Project Development Risk – Total Eren decides that after the Scoping Study has been completed that the project is not economically viable, and as such, chooses to abandon the project.
  • Hydrogen Market Risk – Hydrogen is a very new technology, and there are currently limited uses. Hydrogen is not easily transportable, it is extremely flammable and has also not been adopted on a large scale. If the hydrogen market doesn’t materialise, PRL may struggle to secure financing for its project – and sell its hydrogen at a commercial scale
  • Regulatory Risk – If PRL can’t secure the key permits for the project to go ahead (including heritage agreement, environmental impact assessment and the new development permit). This risk is increased for PRL because there are no regulations that exist for hydrogen projects, and governments will need to update laws to fit this emerging market.

What is our investment plan?

PRL is our second biggest holding behind Vulcan Energy Resources (ASX:VUL). PRL has delivered several impressive announcements since February and is up over 500% since we first invested over 12 months ago in August 2020.

After PRL delivered a number of material announcements and rose over 500%, we sold a portion of our holding to recoup our investment outlays.

We intend to hold our position now until the results of the Scoping Study are announced and re-evaluate our investment plan from there.


Disclosure: The authors of this investment memo and owners of Next Investors, S3 Consortium Pty Ltd, and associated entities, own 24,200,000 PRL shares at the time of publication.

Province Resources Company Milestones

// Q1 2021 (Jan-Mar)
Portfolio Initiation
✅ $1.5M Capital Raise @1.5c
HyEnergy Acquisition – Zero Carbon Hydrogen

✅ SODAR Machine Mobilised
✅ Major Board Appointments
// Q2 2021 (Apr-Jun)
✅ Increase Land Holdings
✅ Total Eren Partnership M0U
Capital Raise: $18M @15c
✅ Key Board Appointment (G. Walker, B. Maslen)
Positive Stakeholder Outcome – Carnarvon Shire and Community
// Q3 2021 (Jun-Sep)
Key Board Appointment (Roger Martin)
🔲 Execute Heritage Agreement
🔲 Positive Stakeholder Outcome – WA Government
🔲 Positive SODAR Results
[UPA] Feasibility Study with GEV
//
🔲 Positive Stakeholder Outcome – Federal Government
🔲 Unexpected Positive Announcement 1
🔲 Unexpected Positive Announcement 2
🔲 Positive Scoping Study
🔲 Total Eren Deal Finalised
🔲 Unexpected Positive Announcement 3
🔲 Initial Offtake Agreement Discussions
🔲 Offtake Agreement Signed
🔲 Review and determine further milestones for 2022

“Expected Company Milestones” are based on the company’s publicly available execution plan and some assumptions made by our team on potential announcements that should de-risk the investment. “Our investment milestones” show our current long-term investment plan. Early stage investments are risky and there is no guarantee that the expected events will occur. The lists are not in sequential order.

🔲 Expected Milestone
✅ Achieved Milestone
🟩 Above Average Result
🟨 Average (Expected) Result
🟧 Below Average Result
🟥 Negative Result
🌎 Macro Event
⚔️ Results from Other Company / Project
🔄 Progress Ongoing
[UPA] Unexpected Positive Announcement
[NEW] New Milestone Added

Why We Invested

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Zero Carbon Hydrogen
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Same Team as Vulcan
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Acquisition with Huge Solar and Wind potential
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