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Briefcase: Business snippets from around SA

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In this week’s briefcase, Leigh Creek Energy secures debt finance for its $2.6 billion fertiliser plant project from a major Korean bank, BiomeBank applies to the TGA for approval of its world-leading gut drug and Duxton Broadacre Farms announces it will pay shareholders a dividend for the first time.

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Finance secured for massive Leigh Creek urea project

A$2 billion project to build a zero-carbon urea production facility in outback South Australia has received debt finance approval from a major South Korean bank.

Leigh Creek Energy has also awarded the Engineering, Procurement, Construction, Commissioning and Finance contract to Korean construction contractor, DL E&C Co.

Under the contract, about $1.5 billion, or 70 per cent of the turnkey price of the contract will be debt funded by the South Korean bank following a letter of support announced last week.

The funding is subject to usual commercial terms and a final investment decision, which is due late next year.

The project, 550km north of Adelaide, aims to become the largest underground coal gasification site in Australia and a globally significant producer of nitrogen-based fertiliser for agriculture.

Leigh Creek Energy will use unconventional technology – banned in Queensland and Scotland – to extract syngas from beneath the ground at the former coalfield. Syngas is a mixture of carbon monoxide, carbon dioxide, methane, hydrogen and other elements.

The publicly listed company last month raised $18 million to fund Stage 1 of the project to advance it towards the commercial production of syngas to initially be used to create power that can be sold on the national grid.

The larger Stage 2 part of the $2.6 billion project involves increasing gas production, a larger power plant and the construction of the processing plant to convert syngas into urea fertiliser, initially producing one million tonnes per year.

Leigh Creek Energy Managing Director Phil Staveley said DL E&C Co. was more than just a contractor and had been engaged as a partner for the project.

“We are committed to moving forward towards the first integrated Australian Urea Production Project and this will be the first large scale fertiliser project in the world with zero carbon emissions as we previously committed,” he said in a statement to the ASX last week.

“Awarding the Stage 2 construction contract moves the Leigh Creek project another major step closer to developing our large resource base in South Australia to be a leading supplier of urea to international markets and the Australian agriculture sector.”

Application lodged for world-leading treatment

South Australian biotechnology company BiomeBank has applied to Australian regulatory authority the Therapeutic Goods Administration for approval of its world-first biologic drug product.

The drug product submitted for Market Authorisation is for the treatment of recurrent Clostridioides difficile (C-diff) and Ulcerative Colitis in a bid to meet unmet medical need across Asia Pacific.

It is already used in Australia to treat C-diff through faecal microbiota transplantation (FMT) and has been positioned as an alternative to existing biologic therapies for Ulcerative Colitis.

BiomeBank CEO Mr Thomas Mitchell said it is believed this could be one of the first microbial therapies approved in the world, alongside companies such as Ferring Pharmaceuticals and Seres Therapeutics.

“We’re positioning BiomeBank as a global leader in microbial drug development with a facility in South Australia, a first-generation microbial therapy now submitted for approval and a rapidly growing portfolio of second-generation products in the pipeline,” he said.

“Official Market Authorisation of our existing product will enable more patients in Australia to access this as a treatment option and allow our company to extend into the Asia Pacific market, highlighting Australia’s capabilities in microbial drug discovery and development.

“While there are a number of like-minded companies across the globe working on discovering and developing similar products, we believe BiomeBank will be the first in the world to have an approved microbial therapy for these diseases.”

Listed farming company to pay first dividend

Listed agriculture company Duxton Broadacre Farms will pay a maiden dividend to its shareholders this month.

The SA company, which listed on the ASX in February 2018 wil pay an unfranked dividend of 6.2 cents per share on July 30.

In a statement to the market last week, DBF said it had endured three of the harshest drought years on record since listing.

The company said although it had grown its net assets from $74.3 million in June 2018 to $87.9 million in December 2020, prevailing conditions had prevented it from achieving operational profitability.

Duxton was listed with an opening share price of $1.57 in 2018. Its share price on Friday afternoon was $1.38, giving it a market capitalisation of $59.2 million.

The company is inviting its shareholders to reinvest dividends, offering a 3 per cent discount on shares if they participate.

The Board will consider the payment of a further dividend in December, which will depend on the outlook of the 2021/22 winter crop.

“It is the firm belief of the Board that, with nearly 23,000 hectares under management, an expanded livestock and cropping program, full soil moisture, and a strengthened balance sheet, DBF is very well positioned to capitalise on its investment thesis going forward,” the company said in the July 1 statement.

Graphite testing achieves high purity

Renascor Resources says recently concluded independent mineral processing trials of its graphite have achieved purity levels of 99.99 per cent without the use of hydrochloric acid as the leaching agent.

The SA company, which recently raised $15 million to head it towards construction of the Siviour graphite mine on Eyre Peninsula, instead used sulfuric acid, which it says reduces chemical, energy and water consumption during the leaching and water treatment phases.

The trials were undertaken by leading German battery mineral consultancy group Dorfner Analysenzentrum und Anlagenplanungsgesellschaft mbH.

In a statement to the ASX last week, Renascor said Siviour graphite consistently met or exceeded lithium-ion battery anode specifications, with results of up to 99.99% Carbon (C) (versus anode industry standard of 99.95% C).

Previously, Renascor has achieved similar purities using hydrochloric acid.

By replacing hydrochloric acid with sulfuric acid, the company expects to achieve operational benefits in the production of Purified Spherical Graphite (PSG) through a lower reagent cost.

“We are delighted with the leading position our technical team has taken in the purification of graphite to lithium-ion battery anode grade and the continuing improvements that have resulted from the recent optimisation trials,” Renascor Managing Director David Christensen said.

“These results suggest that, not only will we be able to produce ultra-high purity graphite at globally competitive costs, but we can achieve these results whilst also delivering positive ESG outcomes.

“We expect these results to further support our plans for our 100 per cent Australian-made Siviour Purified Spherical Graphite to become a world leader in sustainable and ethically-sourced battery anode material for the lithium-ion battery market.”

Renascor will now commence lock-cycle tests, with results to be used for detailed engineering design for the construction of Renascor’s planned PSG manufacturing facility in South Australia.

The Siviour graphite project is the world’s 2nd largest graphite reserve and the only graphite deposit on the federal critical minerals roadmap.

Adelaide house prices up 13.9 per cent

Adelaide home values increased by 13.9 per cent in the 12 months to June 30, narrowly out-pacing the national average according to latest CoreLogic data.

The stats released last Thursday show national home values rose 1.9 per cent in June, taking annual growth to 13.5 per cent for the financial year.

The growth in Australian dwelling values was led by houses, which rose 15.6 per cent over the year, compared to a 6.8 per cent lift in unit values.

Adelaide recorded a 1.6 per cent increase for the month of June to reach a median value of $508,712.

For the year, Darwin (21 per cent) had the highest growth of the capitals, followed by Hobart (19.6), Canberra (18.1) and Sydney (15).

Brisbane (13.2 per cent), Perth (9.8) and Melbourne (7.7) were all behind Adelaide in terms of growth.

CoreLogic Head of Research for Australia Eliza Owen said it was the highest annual rate of growth seen across the Australian residential property market since April 2004.

“However, there are some markets where performance is starting to ease more notably,” she said.

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