The Market Online - At The Bell

Join our daily newsletter At The Bell to receive exclusive market insights

  • Hexagon Energy Materials (HXG) is looking to diversify its minerals exploration business through an off-market takeover of Ebony Energy
  • Under the terms of the all-scrip deal, Hexagon will issue one of its own shares in exchange for each 1.32 shares in Ebony
  • Upon completion of the transaction, Ebony’s shareholders will own 23.24 per cent of the combined company
  • The acquisition gives Hexagon access to Ebony’s Pedirka Project, which has been proposed to host a surface gasification plant to produce blue hydrogen
  • Shares in Hexagon Energy Materials were down 10 per cent at the close of trading yesterday to 5.4 cents each

Hexagon Energy Materials (HXG) is looking to diversify its minerals exploration business through an off-market takeover of Ebony Energy.

Headquartered in Sydney, Ebony owns 100 per cent of the 796-square-kilometre Pedirka Hydrogen Project, located roughly 150 kilometres southeast of Alice Springs in the Northern Territory.

Under the terms of the all-scrip deal, Hexagon will issue one of its own shares in exchange for each 1.32 shares in Ebony. Once the transaction has been completed, and assuming Hexagon is successful in acquiring 100 per cent of Ebony, Ebony’s shareholders will own 23.24 per cent of the combined company.

Since the acquisition constitutes a change of activities, Hexagon will need to seek shareholder approval at a meeting scheduled for early February next year.

“This transaction perfectly aligns with our goal of progressing value-added businesses that are consistent with our strategy, skill set and focus on clean energy,” said Charles Whitfield, Chairman of Hexagon.

“We have formed a very good understanding of the next steps required for Ebony Energy to complete a major resource focused drilling program and pre-feasibility study,” he added.

Charles will continue as a consultant to Hexagon, while Ebony’s current Managing Director, Adam Bacon, will transition to assist Hexagon’s Chief Commercial Officer, Lianne Grove, with executive management duties.

It has been proposed that the Pedirka Project will host a surface gasification plant, which will be used to produce blue hydrogen for both international and domestic markets.

Ebony is expected to carry out an in-depth drilling program to finalise a JORC compliant resource that will form the basis of a pre-feasibility study. Once this study has been completed, Hexagon and Ebony will seek a partnership with a gasification group to progress an off-take arrangement.

Stephen Gerlach, Chairman of Ebony Energy, said the combination with Hexagon offers a “perfect platform” to advance the Pedirka Project.

“We are confident that the project’s upcoming drilling program and pre-feasibility study will yield excellent results and provide clear direction of the best way forward to become a substantial, zero-emission hydrogen producer,” he concluded.

To facilitate the transaction, Hexagon says it has received firm commitments from sophisticated and institutional investors to raise up to $500,000 by issuing just over 8.77 million new fully paid shares at a price of 5.7 cents each.

Roughly $300,000 will be used to cover costs associated with the acquisition of Ebony, while the remaining $200,000 will be used for general working capital and corporate purposes.

Shares in Hexagon Energy Materials were down 10 per cent at the close of trading yesterday to 5.4 cents each.

HXG by the numbers
More From The Market Online
The Market Online Video

Frontier Energy achieves key milestone for Waroona energy project

Frontier Energy (ASX:FHE) has announced it's achieved a key milestone in the Stage One development of…

Strike Energy secures $153 million for Perth Basin gas projects

Strike Energy has secured $153 million from Macquarie Bank to fund gas production and development costs…

Triangle gets approval for Perth Basin carbon sequestration project

Triangle Energy has been given the green light for a carbon sequestration project to go ahead…

Whitebark launches $1.5M capital raise to progress QLD geothermal assets

Whitebark Energy Ltd has launched a capital raise totalling A$1.5M to fund development of its geothermal…