REG - ATOME Energy PLC - Update on Paraguay Operations

AtomeAnnouncement

31/10/2023 07:00

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RNS Number : 7749R  ATOME Energy PLC  31 October 2023

31 October 2023

ATOME ENERGY PLC

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

 

Update on Paraguay Operations

 

ATOME Energy (AIM: ATOM), the only international green fertiliser project
development company on the London Stock Exchange, which is progressing
large-scale projects of 445MW in Paraguay provides an update on progress on
its current major projects.

Summary:

 * Front-end engineering design ("FEED") for the Villeta Project, Paraguay
nearing completion with engineering, procurement and construction ("EPC")
discussions at advanced stage

 * Environmental licence granted - tax-free zone status expected shortly

 * The Board is increasingly confident that the debt financing component of the
project can be achieved

 * Significant carbon credit potential from the Villeta Project following
independent estimates of up to 550,000 tons of CO2eq displaced per year with
new Paraguay law expected to support monetisation of carbon credits

 * 300MW Yguazu Project progresses

 

Villeta 145 MW Phase I Villeta Project

ATOME is pleased to report the continued progress is being made in relation to
this project:

 

FEED and EPC nearing completion

The FEED study is nearing completion, and advanced discussions and
negotiations are currently ongoing in relation to the EPC contract with the
main and specialist sub-contractors, led on ATOME's behalf by the Owner's
Engineer, AECOM, the international engineering consultancy. Completion of the
EPC contract is a prerequisite for taking final investment decision ("FID").

 

Environmental license granted and tax-free zone approved

On the ground, following a thorough process, the Environmental Licence has now
been granted to ATOME by Paraguay's Ministry of Environment and Sustainable
Development. This is a key project document which gives ATOME the rights to
commence preparation and clearance of the Villeta site and enables all
necessary permitting from construction to operation of the production
facility.

 

In addition, the grant of the tax-free zone has passed through all the
necessary inter-governmental processes and awaits only signing off by
Presidential decree which is expected shortly. All of this has been achieved
with the support of the Government whose backing for this project has been
key. Tax free zone status will provide significant financial benefits to the
project and its funders.

 

Phase I Villeta debt financing has seen a strong level of interest

In respect of debt financing, significant expressions of interest have already
been received from both Development Finance Institutions and international
banks. Whilst work continues in relation to this, the strong level of interest
shown to date has demonstrated the financeability of the Company's first
industrial scale green fertiliser project and the Board is increasingly
confident that the required debt financing component can be achieved.

 

It is worth repeating that the debt financing discussed is at the project
level which would provide significant value to ATOME shareholders. We will
provide further updates to shareholders on the timing of all aspects of the
project financing.

 

Sustainability credentials bring significant Carbon Credits opportunity

Further to the Company's August announcement of its preliminary carbon
footprint analysis of its CAN product, ATOME can confirm that the Company's
estimates have been independently reviewed by the specialist sustainability
division of its Owner's Engineer AECOM, which has assessed that ATOME's green
calcium ammonium nitrate ("CAN") fertiliser is estimated to have a
significantly lower carbon footprint than current grey alternatives,
potentially displacing up to 550,000 tons of CO2eq per year versus an imported
and applied grey CAN fertiliser in the Paraguay market.

 

This provides ATOME with a potentially significant value-added part of the
business in respect of any sale of these credits. The future value of any
projected offsets has also now been potentially significantly increased by the
new carbon credit law in Paraguay enacted this month under which there is a
Government backed verification and certification procedure for qualifying
credits to make them more acceptable in the global carbon market.

 

300MW project in Paraguay code named Yguazu

The Yguazu project is over twice the size of the world-scale Villeta facility
and, after discussions with state energy provider ANDE, studies are being
embarked upon to identify the best place to locate the Yguazu facility.

 

With the FEED study on Villeta now available to the Company, lessons learned
from Phase I, together with ATOME's own infrastructure and professional teams,
means that the Company will be in a position to expedite this major project
and others when the time comes. Both contractors and funders are aware that
participation in Phase I Villeta will confer early mover advantage for the
next major project.

 

Olivier Mussat, CEO, commented: "One by one, milestones continue to be
achieved by ATOME as our flagship world-scale green fertiliser project at
Villeta, Paraguay proceeds.

 

"The critical environmental licence has been obtained, a mandatory step in the
project development, opening the door to move to site clearance as the first
step of operations, with the additional benefit of enabling the formal decree
for tax-free zone status to be granted in the near future.

 

"The level and nature of the significant interest in the debt component of the
Villeta project finance is very encouraging, demonstrating international as
well as local financing interest in our project which has both strong economic
viability as well as clear development impact thanks to its green credentials.

 

"It is an increasingly busy time for ATOME and we will continue to keep
shareholders appraised of our progress."

 

Glossary

 

FEED means front-end engineering design

EPC means engineering, procurement, and construction

FID means final investment decision

Owner's Engineer meaning the independent technical and engineering
representative for the project owner

 

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, Rebecca Hislaire, Charles Baister   atome@tavistock.co.uk

 

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
production of green ammonia to produce industrial scale premium value green
fertiliser in 2025. It has procured 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 December 2022, ATOME entered into a 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, which is owned
equally by ATOME and Cavendish.

 

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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