Frontier Energy Ltd (ASX:FHE) has exercised its option to acquire key ground adjacent to the Bristol Springs Renewable (BSS) Energy Project south of Perth in WA and completed the extension of options over other strategic land parcels.
Essential to long-term strategy
Securing this ground is essential for the company’s long-term strategy to produce more than a gigawatt of renewable energy in the region to power its green hydrogen strategy.
The $4.8 million acquisition will also benefit Stage One’s development, ushering in lower initial capital costs as a result of better access to critical infrastructure.
This area covers 238 hectares and is 0.3 kilometres from the Landwehr terminal.
Funding for this acquisition is from existing cash reserves of approximately $11.3 million as of the end of October 2022.
Sufficient funding in place
Based on the company’s current forecast, there is sufficient funding in place through to a final investment decision (FID) on the Stage One development, given the expected lower future project cash burn due to the advanced stage of development.
The option extension on the other areas will last until July 2023. This land covers 93 hectares and is adjacent to Stage One.
FHE will continue to negotiate and assess additional land opportunities in the region as part of its strategy and is in advanced discussions with a property fund to finance future land acquisitions as well as the cost of the acquired ground.
The company is also close to finalising the pre-FEED study, which remains on track to be released in the coming weeks.
Lower capital cost
Managing director Sam Lee Mohan said: “This ground holds the greatest strategic importance to the company due to its position adjacent to Stage One (114MW).
“This acquisition will result in lower capital cost for Stage One development, given a more direct route to essential infrastructure, while also eliminating potential ‘red tape’ that can occur if ground is leased either through third parties or the government.
“In the longer term, the benefit is clear as this ground will be used as part of meeting the company’s renewable energy target of +1GW in immediate vicinity to the project.
“The cost of the acquired ground has been funded from existing cash reserves, which remain extremely strong and are more than sufficient to take us through to FID (Stage One development).
“However, we are in advanced discussions with a property fund that has the potential to fund the acquired ground transaction retrospectively as well as all future land acquisitions.”
There are no other fees payable in connection with these land options or the subsequent purchase of the underlying land other than stated above.
ESG committee established
In other news, the company has established an ESG Committee as a sub-committee of the board.
Chaired by Amanda Reid and with Dixie Marshall and Sam Lee Mohan as members, the committee will further develop the company’s strategy on ESG matters.