Update on Paraguay Operations

ATOME Energy PLC

17 January 2024

 

17 January 2024

ATOME ENERGY PLC

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

Update on Paraguay Operations

Excellent progress on multiple workstreams coming to a head in Q1 2024

ATOME Energy (AIM: ATOM), the only international green fertiliser project development company on the London Stock Exchange, provides an update on its Paraguay operations.

Summary:

·      Front-End Engineering Design ("FEED") study and Engineering, Procurement and Construction ("EPC") progressing well and to be concluded in this Q1

·      Multiple offtake proposals received from leading international players with Company in advanced negotiations for offtake of Villeta's full production volume of its green fertiliser with concrete news expected this Q1

·      Company confident in finalising the Villeta Project financing with interest in the debt financing component extending to over 2x oversubscribed and interest from international heavyweight investors in the equity component all at project level

·      Pre-PPA studies in respect of the 300MW Yguazu Project to be completed this month to confirm best location for the project with the 300MW PPA targeted for this H1

145MW Villeta Phase 1, Paraguay

Detailed FEED, EPC, and financing negotiations for this first of a kind project are now in their final stages as management continue to push to achieve the best possible expedient outcome for ATOME shareholders. The Company is pleased to report solid progress continuing across key development workstreams.

FEED and EPC in final stages

The FEED study for the Villeta Project will be completed this Q1.

EPC contract discussions with the main and specialist sub-contractors, led by AECOM, the international engineering consultancy and ATOME's Owner's Engineer, will conclude in the coming weeks. Discussions have been focussed on delivering a lump sum fixed price turnkey contract in order to provide certainty on costs and delivery timelines with AECOM contributing value engineering. This contractual structure being negotiated will create alignment between ATOME and its EPC contractor which has the responsibility for delivering the plant in working order, on the agreed timeline and budget, thereby lowering project risk and increasing its bankability, all of which significantly contributes to maximising project returns.

Offtake of CAN from Villeta

The Company is in advanced negotiations with leading international players for the offtake of the full production of green Calcium Ammonium Nitrate ("CAN") fertiliser from Villeta. ATOME has now received multiple proposals from prospective offtakers and management is actively considering a number of proposals which satisfy the financial and strategic objectives set out by the Board.

It has become clear to the Board that there is a significant and growing market for CAN on the doorstep of Paraguay, in Brazil and Argentina, particularly with the latter market becoming significantly more open due to the change in government there. Furthermore, ATOME's offering is particularly attractive to European and UK markets where increasing emphasis is made throughout the vertical supply chain for green fertiliser and carbon tax penalties are now in place and will grow increasingly in the next few years.

An agreement on offtake of ATOME's CAN is expected to be announced before the end of Q1. Further details of the offtake arrangements will be disclosed when terms with an offtaker are settled.

Project financing gains momentum

The Company's financial advisor, Natixis Corporate & Investment Banking, has received multiple formal expressions of interest from Development Finance Institutions, international lenders and export credit agencies leading to an indicative oversubscription in respect of the debt financing component of the project of some 2x. As such, the Board is confident that the debt element of the financing can be achieved on terms acceptable and as envisaged by the Company and we expect to mandate the lead arrangers in Q1.

Discussions are ongoing with prospective international equity and strategic investors at the project level who are continuing to show ongoing interest in financing Villeta due to the project's robust economic case and strategic importance given that it is expected to be the world's first industrial scale green ammonia-to-fertiliser facility and capable of exporting its product economically worldwide.

300MW "Yguazu Project"

Following entry into a pre-PPA with ANDE, the state power company of Paraguay, both parties continue to cooperate on mechanical engineering and feasibility studies to establish the best location for the Yguazu Project.

Yguazu will benefit from the blueprint created by the Villeta project development for green fertiliser production both in terms of timescale and costs. A further update on Yguazu along with an expected roadmap toward a 300MW PPA will be made in this Q1 with a formal 300MW PPA targeted to be entered into within H1.

Olivier Mussat, ATOME's CEO, commented: "The Board is confident that 2024 will be a transformational year for ATOME and we are grateful to the team and our strategic partners who have continued to work throughout the end of the year in order to make rapid progress on the engineering, financial and commercial fronts.

"Whilst taking slightly longer than we originally hoped, the work and de-risking during this extended time has allowed for significant benefit in enhancing the efficacy of our first 145MW project in Paraguay as well as enabling beneficial impact on design, offtake, and financing. We are confident that in this Q1, further key project milestones will be achieved, and we look forward to taking FID on the Villeta project once these workstreams are completed.

"At the same time, work is continuing in parallel on other projects and in particular Costa Rica which, combined with Yguazu in Paraguay, provides a pipeline of projects extending to world-scale in excess of half a gigawatt."

For more information, please visit https://www.atomeplc.com or contact:

ATOME Energy PLC Nikita Levine, Investor Relations	[phone] [e-mail]
Beaumont Cornish (Nominated Adviser) Roland Cornish, Michael Cornish	[phone]
Liberum (Joint Broker) Scott Mathieson, Kane Collings	[phone]
SP Angel (Joint Broker) Richard Hail, Harry Davies-Ball	[phone]
Cavendish Capital Markets Limited (Broker) Simon Hicks, George Dollemore	[phone]
Tavistock (Financial PR and IR) Simon Hudson, Charles Baister, Saskia Sizen	[phone] [e-mail]

Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated Adviser and is authorised and regulated by the FCA. Beaumont Cornish's responsibilities as the Company's Nominated Adviser, including a responsibility to advise and guide the Company on its responsibilities under the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed solely to the London Stock Exchange. Beaumont Cornish is not acting for and will not be responsible to any other persons for providing protections afforded to customers of Beaumont Cornish nor for advising them in relation to the proposed arrangements described in this announcement or any matter referred to in it.

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 acquired 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 Costa Rica, ATOME has a green fertiliser 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. As well as straddling the Pacific and Atlantic Oceans, Costa Rica is a democratic Central American country. In agriculture, Costa Rica is the second largest supplier of pineapples in the world and is in the top ten banana growers.

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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