Gas and energy company Renergen’s share price on the JSE surged by more than 78% on May 20, after the company and Nasdaq-listed advanced materials company ASP Isotopes announced that ASP Isotopes would make an offer to acquire all shares in Renergen and create a strategic materials company with vertical and horizontal business integration.

ASP Isotopes, which in April announced that it would also list on the JSE, will issue new common stock to JSE- and ASX-listed Renergen shareholders as part of the proposed transaction.

Renergen's financial position faces significant liquidity concerns owing to a delayed Phase 1 of the Virginia gas project, as it addressed some of the technical challenges common in commissioning a highly technical and specialised liquefaction facility.

The business, however, has several significant tailwinds and unique opportunities, which makes it an attractive asset, Renergen said in a statement.

“After a tumultuous year and a half, I am excited about the combined prospects of our new company and its future.

“Access to a US investor base [that has] a deep understanding of critical minerals, as well as oil and gas, has for the longest time been the final critical ingredient required to unlock the Virginia gas project and the longer-term expansion of this unique natural resource,” said Renergen CEO Stefano Marani.

“As the world becomes more insular, critical materials are quickly becoming the most sought-after commodities and our merger places ASP Isotopes front and centre. Offering customers a fully integrated supply chain reduces a significant amount of risk for them, and makes our offering incredibly valuable.

“In joining our two companies, there are expansion opportunities for the business horizontally across our key helium customer bases of nuclear, healthcare, semiconductors and rocketry,” he added.

The proposed transaction addresses Renergen's immediate liquidity needs, and will provide the necessary capital to complete Phase 1 and progress to Phase 2 of the Virginia gas project.

Global demand for helium in semiconductor manufacturing alone is projected to increase total consumption significantly. Therefore, this merger combines ASP Isotopes' silicon-28 enrichment capabilities with Renergen's helium reserves to address critical supply vulnerabilities.

Renergen's Virginia gas project boasts some of the highest helium concentrations recorded globally, providing a secure supply alternative at a time when helium prices have surged over 400% amid severe supply constraints.

Further, the companies have a shared, complementary customer base with both serving end markets in medical (helium, carbon-14, ytterbium), nuclear (uranium, helium) and semiconductor (silicon-28, helium, germanium) industries, enabling immediate operational and sales synergies.

Renergen had already built an extensive sales network within the semiconductor sector, which may significantly increase sales targets for ASP Isotopes, Renergen said.

“With the imminent spin-out of [eco-friendly products company] QLE, I have been considering the expansion of the ASP Isotopes business, and this opportunity is the perfect fit for us. Both isotopes and helium are viewed by many governments as critically and strategically important materials,” said ASP Isotopes chairperson and CEO and QLE chairperson and CEO Paul Mann.

“The combination of these two companies will create a company with huge strategic value and a vital part of a fragile supply chain that enables many industries," he said.

In today's volatile geopolitical landscape, where critical materials security has become paramount to national interests, the strategic business combination between ASP Isotopes and Renergen creates a uniquely positioned global entity in critical and strategically important materials vital to the healthcare, semiconductor manufacturing and energy sectors, the companies said.

ASP ISOTOPES
Meanwhile, ASP Isotopes has completed the commissioning phase and is starting commercial production at its C-14 and Si-28 enrichment facilities in Pretoria, South Africa.

It has also completed the commissioning phase and is commencing production of commercial samples of highly enriched Yb-176 at its Yb-176 enrichment facility, also in Pretoria.

Its C-14 and Si-28 enrichment facilities use the ASP technology and its Yb-176 enrichment facility uses QE technology.

ASP Isotopes expects its first three enrichment facilities to generate commercial product this year.

Additionally, it has started planning additional isotope enrichment plants both in South Africa and in other jurisdictions, including Iceland and the US.

The company believes the C-14 could be used in the development of new pharmaceuticals and agrochemicals, while the Si-28 may be used to create advanced semiconductors and in quantum computing. The Yb-176 may be used to create radiotherapeutics that treat various forms of oncology.

Further, ASP Isotopes is currently pursuing an initiative to apply its enrichment technologies to the enrichment of Uranium-235 in South Africa.

The company says the U-235 it may produce using QE technology may be commercialised as a nuclear fuel component for use in the new generation of high-assay low-enriched uranium- (HALEU-) fuelled small modular reactors that are now under development for commercial and government uses.

In further developing its uranium enrichment initiative, in October 2024, ASP Isoptopes entered into a term sheet with TerraPower, which contemplates TerraPower providing funding for the construction of a HALEU production facility and agreeing to purchase all HALEU produced at the facility over a ten-year period after the planned completion of the facility in 2027.

In addition, in November 2024, ASPI entered into a memorandum of understanding with the State-owned South African Nuclear Energy Corporation to collaborate on the research, development and, ultimately, the commercial production, of advanced nuclear fuels.

Subject to the receipt of funding and all required permits and licences to begin enrichment of U-235 in South Africa, it is anticipated that the research, development and ultimate construction of a HALEU production facility will take place at South Africa's main nuclear research centre at Pelindaba, in Pretoria.

Additionally, ASP Isotopes is considering the future development of the ASP technology for the separation of Zinc-68, Xenon-129/136 for potential use in the healthcare end market, Germanium 70/72/74 for potential use in the semiconductor end market, and Chlorine-37 for potential use in the nuclear energy end market.

It is also considering the future development of QE technology for the separation of Nickel- 64, Gadolinium-160, Ytterbium-171, Lithium-6 and Lithium-7.

The offer presents Renergen shareholders with a premium on their investment, with the offer consideration amounting to a roughly 41% premium above the 30-day volume weighted average price.

Renergen’s share price on the JSE rose to a high of R12.50 apiece on May 20, compared with R7 a share at the market close on May 19. The share price retreated somewhat to R9.91 a share by 16:00 on May 20 – still more than 40% higher than the previous day’s close.