The Company is pleased to announce the acquisition of an interest in Hydrogen Valley Ltd and its subsidiary Greenswitch srl.
This transformative acquisition marks a significant step in 80 Mile's strategy to become a vertically integrated exploration & production company for petrochemicals as well as industrial and natural gases. The intention is that 80 Mile will establish a new industrial gas and petrochemical business unit, which will work to diversify the Company's portfolio to include biofuels, sustainable aviation fuels ('SAF'), glycerine and green hydrogen.
80 Mile is proposing to acquire up to a 49% stake in Hydrogen Valley for a consideration of up to £2.0 million in cash and the issue of such number of new Ordinary Shares as is equal 29% of the Issued Ordinary Share Capital of 80 Mile (subject to shareholder approval). Further, 80 Mile would also have the option to increase to a 100% interest in HV exercisable at any time commencing on the date falling 12 months and one day from the date of exercise of the foregoing option and lapsing on the date falling 24 months from the date of exercise of such option, for an aggregate consideration of £6.05 million (to be satisfied in cash or by the issue of new Ordinary Shares in 80 Mile, the split of cash and shares to be determined at the time of exercise of the option).
- Hydrogen Valley, through its wholly owned subsidiary, owns the Greenswitch biofuels and chemical production complex in the Basilicata region of Italy (subject to certain payments, see Risk Considerations below).
- The Greenswitch refining facilities are located within a Special Economic Zone ("ZES"), which includes a free trade zone that would afford the Group numerous economic incentives and subsidies.
- Greenswitch's facilities include fully permitted plants suitable for (amongst other things) biodiesel, epoxidized soybean oil ('ESO') and glycerine, with a capacity of up to 140,000 tonnes/year.
- A fundraising of £1.5m by accelerated book build managed by Zeus Capital Ltd will be launched to support this transaction alongside the Company's existing cash resources.
- The acquisition has the potential to create a vertically integrated petrochemical division through large-scale production of biofuels and the expected introduction of SAF and hydrogen, with cash flow then available to develop the Company's other advanced petroleum exploration assets.
- Revenue generation is expected during Q1 2025, with potential for revenue growth with production being scaled up over the coming quarters and through expected expansion to include SAF and hydrogen.
- The Company's plans for the facilities align with European Union ('EU') and Italian government initiatives, and the Directors expect to position Greenswitch to attract substantial grant funding and energy transition support. Grant applications are underway.
- 80 Mile expects to be able to finalise offtake agreements for 100% of the anticipated Greenswitch production.
- Robert Price is to join the Group as CEO of the newly formed industrial gas and petrochemical business unit with Eric Sondergaard remaining 80 Mile group CEO and MD.