REG - ATOME Energy PLC - Update on Paraguay Operations

AtomeAnnouncement

17/01/2024 07:00

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RNS Number : 9019Z  ATOME Energy PLC  17 January 2024

17 January 2024

 

ATOME ENERGY PLC

("ATOME", "the Company", or "the Group")

 

Update on Paraguay Operations

 

Excellent progress on multiple workstreams coming to a head in Q1 2024

 

 

ATOME Energy (AIM: ATOM), the only international green fertiliser project
development company on the London Stock Exchange, provides an update on its
Paraguay operations.

 

Summary:

·      Front-End Engineering Design ("FEED") study and Engineering,
Procurement and Construction ("EPC") progressing well and to be concluded in
this Q1

·      Multiple offtake proposals received from leading international
players with Company in advanced negotiations for offtake of Villeta's full
production volume of its green fertiliser with concrete news expected this Q1

·      Company confident in finalising the Villeta Project financing
with interest in the debt financing component extending to over 2x
oversubscribed and interest from international heavyweight investors in the
equity component all at project level

·      Pre-PPA studies in respect of the 300MW Yguazu Project to be
completed this month to confirm best location for the project with the 300MW
PPA targeted for this H1

 

145MW Villeta Phase 1, Paraguay

 

Detailed FEED, EPC, and financing negotiations for this first of a kind
project are now in their final stages as management continue to push to
achieve the best possible expedient outcome for ATOME shareholders. The
Company is pleased to report solid progress continuing across key development
workstreams.

 

FEED and EPC in final stages

The FEED study for the Villeta Project will be completed this Q1.

 

EPC contract discussions with the main and specialist sub-contractors, led by
AECOM, the international engineering consultancy and ATOME's Owner's Engineer,
will conclude in the coming weeks. Discussions have been focussed on
delivering a lump sum fixed price turnkey contract in order to provide
certainty on costs and delivery timelines with AECOM contributing value
engineering. This contractual structure being negotiated will create alignment
between ATOME and its EPC contractor which has the responsibility for
delivering the plant in working order, on the agreed timeline and budget,
thereby lowering project risk and increasing its bankability, all of which
significantly contributes to maximising project returns.

 

Offtake of CAN from Villeta

The Company is in advanced negotiations with leading international players for
the offtake of the full production of green Calcium Ammonium Nitrate ("CAN")
fertiliser from Villeta. ATOME has now received multiple proposals from
prospective offtakers and management is actively considering a number of
proposals which satisfy the financial and strategic objectives set out by the
Board.

 

It has become clear to the Board that there is a significant and growing
market for CAN on the doorstep of Paraguay, in Brazil and Argentina,
particularly with the latter market becoming significantly more open due to
the change in government there. Furthermore, ATOME's offering is particularly
attractive to European and UK markets where increasing emphasis is made
throughout the vertical supply chain for green fertiliser and carbon tax
penalties are now in place and will grow increasingly in the next few years.

 

An agreement on offtake of ATOME's CAN is expected to be announced before the
end of Q1. Further details of the offtake arrangements will be disclosed when
terms with an offtaker are settled.

 

Project financing gains momentum

The Company's financial advisor, Natixis Corporate & Investment Banking,
has received multiple formal expressions of interest from Development Finance
Institutions, international lenders and export credit agencies leading to an
indicative oversubscription in respect of the debt financing component of the
project of some 2x. As such, the Board is confident that the debt element of
the financing can be achieved on terms acceptable and as envisaged by the
Company and we expect to mandate the lead arrangers in Q1.

 

Discussions are ongoing with prospective international equity and strategic
investors at the project level who are continuing to show ongoing interest in
financing Villeta due to the project's robust economic case and strategic
importance given that it is expected to be the world's first industrial scale
green ammonia-to-fertiliser facility and capable of exporting its product
economically worldwide.

 

300MW "Yguazu Project"

 

Following entry into a pre-PPA with ANDE, the state power company of Paraguay,
both parties continue to cooperate on mechanical engineering and feasibility
studies to establish the best location for the Yguazu Project.

 

Yguazu will benefit from the blueprint created by the Villeta project
development for green fertiliser production both in terms of timescale and
costs. A further update on Yguazu along with an expected roadmap toward a
300MW PPA will be made in this Q1 with a formal 300MW PPA targeted to be
entered into within H1.

 

Olivier Mussat, ATOME's CEO, commented: "The Board is confident that 2024 will
be a transformational year for ATOME and we are grateful to the team and our
strategic partners who have continued to work throughout the end of the year
in order to make rapid progress on the engineering, financial and commercial
fronts.

 

"Whilst taking slightly longer than we originally hoped, the work and
de-risking during this extended time has allowed for significant benefit in
enhancing the efficacy of our first 145MW project in Paraguay as well as
enabling beneficial impact on design, offtake, and financing. We are confident
that in this Q1, further key project milestones will be achieved, and we look
forward to taking FID on the Villeta project once these workstreams are
completed.

 

"At the same time, work is continuing in parallel on other projects and in
particular Costa Rica which, combined with Yguazu in Paraguay, provides a
pipeline of projects extending to world-scale in excess of half a gigawatt."

 

For more information, please visit https://www.atomeplc.com
(https://www.atomeplc.com) or contact:

 

 ATOME Energy PLC                              +44 (0) 113 337 2210
 Nikita Levine, Investor Relations
info@atomeplc.com
 Beaumont Cornish (Nominated Adviser)          +44 (0) 20 7628 3396
 Roland Cornish, Michael Cornish
 Liberum (Joint Broker)                        +44 (0) 20 3100 2000
 Scott Mathieson, Kane Collings
 SP Angel (Joint Broker)                       +44 (0) 20 3490 0470
 Richard Hail, Harry Davies-Ball
 Cavendish Capital Markets Limited (Broker)    +44 (0) 20 7220 0500
 Simon Hicks, George Dollemore
 Tavistock (Financial PR and IR)               +44 (0) 20 7920 3150
 Simon Hudson, Charles Baister, Saskia Sizen   atome@tavistock.co.uk

 

Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated
Adviser and is authorised and regulated by the FCA. Beaumont Cornish's
responsibilities as the Company's Nominated Adviser, including a
responsibility to advise and guide the Company on its responsibilities under
the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed
solely to the London Stock Exchange. Beaumont Cornish is not acting for and
will not be responsible to any other persons for providing protections
afforded to customers of Beaumont Cornish nor for advising them in relation to
the proposed arrangements described in this announcement or any matter
referred to in it.

 

The information communicated within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No
596/2014 which is part of UK law by virtue of the European Union (Withdrawal)
Act 2018. Upon publication of this announcement, this inside information is
now considered to be in the public domain. The person who arranged for the
release of this announcement on behalf of the Company was Peter Levine,
Chairman.

 

About ATOME

ATOME Energy PLC is an AIM listed company targeting green fertiliser
production with 445-megawatt of projects in Paraguay and a further pipeline of
potential projects in Central America and Iceland.

 

Since its admission to AIM in December 2021 ATOME signed a 145MW power
purchase agreement with ANDE, the state energy company in Paraguay for
acquired 30 hectares of land in Villeta, Paraguay for that facility, mandated
Natixis Corporate & Investment Banking and the multilateral IDB Invest to
lead the project funding and with Front End Engineering and Design studies
currently underway with the international companies Urbas and Casale. ANDE has
also allocated a further 300MW for ATOME's second project subject to
studies.

 

In Costa Rica, ATOME has a green fertiliser joint venture with Cavendish, the
renewable energy arm of the substantial and well-established Purdy Group based
in Costa Rica and formed The National Ammonia Corporation S.A. As well as
straddling the Pacific and Atlantic Oceans, Costa Rica is a democratic Central
American country. In agriculture, Costa Rica is the second largest supplier of
pineapples in the world and is in the top ten banana growers.

 

ATOME is in the process of operational planning, sourcing and negotiations
with green electricity suppliers, equipment providers and offtake partners,
including signed memoranda of understanding and cooperation agreements in
place with key parties, to produce green ammonia at an industrial scale using
electricity generated from existing geothermal sources in Iceland and
hydroelectric power in Paraguay and Costa Rica. All chosen sites are located
close to the power and water sources and export facilities to serve
significant domestic and then international demand.

 

The Company has a green-focused Board which is supported by major shareholders
including Peter Levine, Trafigura, one of the world's leading commodity and
logistics company, and Schroders, a leading fund manager, and since May 2023,
Baker Hughes, a global energy technology company operating in the energy and
industry sectors.

 

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