Kinetiko Energy Ltd (ASX:KKO and OTCQB:KKOBF) (Kinetiko or the Company) is focused on commercialising its 100% owned shallow conventional gas projects in South Africa. Kinetiko advises that its wholly owned South African subsidiary Afro Energy (Pty) Ltd (Afro Energy), the holder of ER270, has executed a co-operation and settlement agreement (Agreement) with MNWP and Mulilo. Kinetiko Energy Limited is also a party to the Agreement. The Agreement grants MNWP an exclusive use arrangement over a defined exclusion zone.
HIGHLIGHTS
- Afro Energy (Pty) Ltd, Kinetiko’s 100% owned South African subsidiary, to receive a co-operation fee of A$1.26 million (Rand equivalent) in cash consideration under a Co-operation and Settlement Agreement with Mulilo Newcastle Wind Power (MNWP) and Mulilo Renewable Project Developments (Mulilo).
- Resolves overlapping land-use with the proposed Newcastle wind energy facility, providing certainty for Kinetiko’s exploration programme to continue up to the boundaries of the defined zones.
- Agreement affects only 18.54 km², approximately 1.1% of Kinetiko’s Exploration Right ER 270.
- Delivers a right of first refusal for Kinetiko to supply natural gas to the Newcastle project should gas-fired electricity generation be procured, a potential future gas offtake opportunity.
- Non-dilutive cash consideration payable in two tranches, with an initial payment of 20% due on signing and the balance payable following the wind project reaching Financial Close. (targeted on or before 31 December 2026).
- Kinetiko retains all exploration and related rights outside the defined zones, including the ability to renew or convert its Exploration Right.
- The non-dilutive funding will be applied to expediting the Phase 1 gas production cluster at Brakfontein. The Company is in discussions with other renewable energy developers regarding similar land access arrangements.
Details of Agreement
Exclusive Access Area
MNWP is developing the Newcastle wind energy facility and associated grid connection infrastructure in KwaZulu-Natal (Newcastle Project) over areas that overlap Afro Energy’s Exploration Right 270 (ER270). The parties have agreed to co-operate so that the Newcastle Project and Afro Energy’s exploration operations can proceed without interference. Afro Energy has agreed to an exclusive use arrangement over a defined exclusion zone of 18.54km2 on the eastern boundary of ER270.
Right of First Refusal for Gas Supply
The Agreement provides Afro Energy with a right of first refusal to supply natural gas should Mulilo or MNWP procure gas-fired electricity generation in connection with the Newcastle Project. The Agreement does not oblige Mulilo or MNWP to procure gas.
Co-operation Fee
Afro Energy will receive the Rand equivalent of A$1,260,720 in cash consideration. An initial non refundable payment of 20% is due following execution of the Agreement, with the balance payable following Financial Close of the MNWP targeted for 31 December 2026.
Use of Funds
The co-operation fee is non-dilutive and will be applied to expediting the Phase 1 gas production cluster at Brakfontein.
– ENDS –
Authorised for release by the Board of Kinetiko Energy Limited
For more information visit: www.kinetiko.com.au or contact
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