Aspiring renewables producer Montem Resources (ASX: MR1) has raised $3 million to advance feasibility studies for its Tent Mountain Renewable Energy Complex (TM-REX) in Alberta, Canada.
The funds were raised through a share placement to sophisticated and professional investors priced at $0.051 per share, which represents a 13.6% discount to the last closing price and a 21.8% discount to the 15-day volume weighted average price of Montem’s shares.
Money raised will go towards feasibility studies at TM-REX, which is also likely to be assisted by a C$5 million (A$5.44 million) grant under application from Canada’s Clean Fuels Fund. This additional funding is expected to be awarded in the 2022 first quarter.
Montem managing director and chief executive officer Peter Doyle said he is pleased with the support for the share placement and thanked the company’s existing shareholders for their ongoing backing.
“We also welcome a number of new investors to the register and are excited by their support for the new direction we are advancing at Tent Mountain,” he added.
The placement is expected to settle on or around 23 December with shares to be issued on 24 December.
In addition, Montem chairman Mark Lochtenberg will be issued about $150,000 in shares in the placement, subject to shareholder approval at a general meeting in February.
From coal to renewables
Formerly focused on developing the hard coking coal resource at its Chinook project in Alberta, Montem revealed a new strategy in October to transition to renewables with a view to becoming Canada’s first large-scale green hydrogen producer.
Last month, the company established a steering committee to transition the Tent Mountain mine into a renewables project.
The planned development will include 320 megawatts of pumped hydro energy storage (PHES), a 100MW green hydrogen electrolyser and a 100MW off-site wind farm.
Over the course of 2022, Montem plans to move the TM-REX through the front-end engineering and design (FEED) project phase.
Energy security for Alberta
Mr Doyle attributed Tent Mountain’s potential to become an “outstanding” renewable energy asset to its “ideal topography and location”.
“The PHES element of the project will provide stability to Alberta’s electricity supply as it looks to further transition to renewable energy sources,” he said.
“We are fortunate to have the ability for a second, different project at Tent Mountain, and are eager to get to work progressing TM-REX, developing a renewable energy project which has significant potential.”
In an investor presentation, Montem said coal-fired electricity represents 30% or more of Alberta’s power supply, but all coal-fired power plants in the province are scheduled to retire by the end of this decade.
Montem’s planned green hydrogen project would be a first-of-its-kind in Western Canada, offering about eight hours of continuous generation from the PHES element, plus security of supply and cost reductions through the addition of the integrated wind farm.