Share Code: REN – Market Cap: R2.4bn – PE: -55.6x – DY: 0.0%

Discovery of Helium at Evander & Other Wells; Pipeline Update

• Renergen has found world-class helium concentrations at the MDR1 (3.15%) and P007 (4.38%) wells along with intersecting gas at R2D2. These wells all either point towards a better/larger resource and/or higher well density potential (i.e. lower capex/well) that incrementally adds upside to the Group’s existing Phase I and II of its Virginia Gas Project.
• Helium has now also been found at the Group’s Evander Exploration Right prospect at 1.1% concentrations. While this is lower than Virginia, 1.1% is still a world-class concentration and adds a further 52,000 hectares of exploration rights to the Group’s already exciting gas resource.
• Finally, the Virginia Gas Project’s pipeline has been completed and performance tested with very pleasing results (+7% higher than planned flow rate; 30% less power consumption) that should have positive operational and valuation impact.

Incremental Capital Raise Strongly Supported

• Renergen has placed c.5.6m shares (c.4.8% dilution to c.117.5m shares in issue) at c.1910cps (c.9.5% discount to the 30-day VWAP) with two key considerations to this placement:
• It was quickly and fully subscribed, adding 3 South African and 9 Australian institutional investors, and, somewhat, derisking the likely Phase II capital raise through the process, &
• Funds will debottleneck the Group’s exploration of the Virginia Project, Feasibility Studies for Phase II & offer some working capital runway for existing operations.

Forecast, Valuation and Implied Return: Updated for Spot Changes

• Leaving our model unchanged and only updating it to reflect current spot prices (ZAR, Diesel, & lower share price), we see REN’s fair value as 4535cps (previously: 4978cps) and its 12m TP as 5330cps (previously: 5850cps).