Hexagon completes A$1mn funding round for West Aussie ammonia project
Sydney-listed Hexagon Energy Materials has completed a A$1mn ($0.67mn) funding round to advance its WAH₂ low-emissions ammonia project in Western Australia to the FEED stage, it announced on June 20.
To minimise dilution to existing shareholders, the funding is structured as a convertible note, which references future share prices to allow Hexagon to achieve a higher effective issue price from any higher valuations after re-rating as announcements are made, while also guaranteeing a minimum conversion price of A$0.02.
The funding enables the company to progress technical work, regulatory approvals, and commercial negotiations with service and offtake partners. It is anticipated that, as part of those agreements, strategic partners would contribute to reimburse a portion of pre-FEED costs. An additional, similarly structured funding round of up to A$0.75mn is being progressed to be executed if necessary.
Hexagon's target remains WAH₂ FEED entry in Q3 2024. This will require the completion of planned technical work and the finalisation and execution of conditional commercial agreements for key aspects of the project. Confidential negotiations continue with key input providers, potential off-takers, and strategic partners, the company said.
"This funding clears the path for the company to finalise its technical work to FEED, which will in turn clear the final steps to engagement with our strategic partners,” chairman Charles Whitfield commented. “The placement has been specifically structured with the help of a key investor so that the company can benefit from any future uplift in the share price upon the achievement of key milestones.”
Last month, Hexagon signed a memorandum of understanding with Oceania Marine Energy to explore the development of an ammonia bunkering business in Dampier, situated in the Pilbara region of Western Australia. While the primary market for the WAH₂ project’s low-emissions ammonia remains the substitution of coal in thermal power generation in Japan and South Korea, ammonia bunkering has the potential to be a valuable, additional, domestic market, the company said.