Invictus Energy (ASX: IVZ) signs MOU for gas supply to power Eureka gold mine - Kalkine Media

Highlights

• Invictus Energy has signed a gas sales MOU for a gas-to-power project supplying the Eureka Gold Mine.
• Natural gas is planned to be supplied from Invictus’ Cabora Bassa Project as feedstock for the project.
• A feasibility study is planned to optimise power delivery and maximise project scalability.
• IVZ aims to seize early monetization opportunities and expedite timelines for initial production and revenue generation.
• IVZ shares surged by 6% following announcement of significant milestone in energy development.

Invictus Energy Limited (ASX: IVZ) has achieved a significant milestone in its journey towards sustainable energy development in Zimbabwe. The company has executed a Memorandum of Understanding (MOU) for a proposed gas-to-power project to supply electricity to the Eureka Gold Mine. The MOU was signed with Dallaglio Investments Pvt Ltd and Himoinsa Southern Africa Proprietary Limited.

Eureka, one of Zimbabwe’s largest gold producing mines, is owned and operated by Dallaglio. Situated 50km south of the Mukuyu gas field, the Eureka project currently relies on supplementary and backup diesel power generation provided by Himoinsa.  

Invictus to supply gas from Cabora Bassa Project

Invictus Energy and One Gas Resources through Geo Associates (Private) Limited (80% held by Invictus) have executed the MOU with Dallaglio and Himoinsa. The objective is to supply natural gas from the company’s Cabora Bassa Project as feedstock for the gas-to-power project to Eureka.

Himoinsa will furnish the proposed power generation plant and equipment, initially designed to have an estimated capacity of 12MW but with potential for expansion to 50MW.

Monetisation Opportunities

With the recent confirmation of the Mukuyu gas-condensate discovery within the Cabora Bassa Project, Invictus believes that it is strategically positioning itself to seize early monetisation prospects and expedite the timelines towards achieving initial production and generating revenue.

The high-quality natural gas discovered at Mukuyu-2, boasting minimal impurities, allows for a simple early production system at the wellsite, catering to both power generation or compressed natural gas delivery to Eureka.

Gas-fired power will provide Eureka with a dependable and cleaner energy source compared to the existing coal-fired power and backup diesel generators, which are relied upon during frequent power outages in the country.

The MOU offers flexibility to gradually expand the pilot project through modular increments, aligning with the growth of the resource base and the signing of additional power offtake agreements.

Future Plans   

A feasibility study will be conducted to determine the optimal delivery of power to Eureka. Following the feasibility study, Invictus and Himoinsa plan to execute a binding Gas Sale and Purchase Agreement (GSPA).

Under the agreement, IVZ will provide natural gas to Himoinsa, facilitating power generation equipment supply and electricity provision to Dallaglio at Eureka, under back-to-back GSPA and Power Purchase Agreements (PPAs).

Part of the feasibility study involves the company assessing the use of Mukuyu-2, post-well testing, as a producer in the pilot project.

Reflecting on the MOU, Invictus Energy Managing Director Scott Macmillan commented: “Signing this MOU is a major step forward in our early commercialization strategy and demonstrates the immediate monetization opportunities available to Invictus as we look to progress the Cabora Bassa project following our significant gas discovery at Mukuyu.”

IVZ shares trade higher

Following the announcement, the share price of IVZ increased by around 6% to trade at AU$0.075 (23 April at 11:31 AM AEST).