Burwell Battery Storage Partner Buyout

RNS Number : 0775H

Corcel PLC

01 December 2020

 

Corcel PLC

("Corcel" or the "Company")

Burwell Battery Storage and Solar Project: Economic Review, Project Sanction and Partner Buyout

01 December 2020

Corcel Plc, the natural resource exploration and development company with interests in battery metals and flexible grid solutions, is pleased to announce an update on its Burwell battery storage and solar project (the "Burwell Project"), including the completion of its project economic review and the buyout of the other 50% shareholders.

Highlights:

· Positive project economic review, resulting in Project Sanction to proceed to "shovel ready" status and Financial Close

· Corcel to buy out the remaining 50% interest in Weirs Drove Development Limited ("WDD") thereby becoming the 100% owner of the Burwell Project for £90,000.

Burwell Update

Following a positive project economic review, the Company confirms its conclusion that, based on current revenue projections (provided by Limejump Ltd, a subsidiary of Shell New Energy Ventures ("Limejump")) and current capital cost estimates, the 50MW battery storage project at Burwell has the potential to offer a robust investor return profile.  The Company has therefore sanctioned the project to proceed to "shovel ready" status and thereafter Financial Close.  The Company is securing the 100MW 132kV UK Power Networks grid connection offer (previously announced on 22 September 2020) by paying the associated deposit.

The Burwell Project is expected to begin operations in 2022, and as such the project will be entered into the Capacity Market auction for 2025, which would provide a fixed guaranteed source of revenue for the project over a 15-year initial period.  The Capacity Market is a government mandated scheme which offers developers guaranteed returns to maintain a reliable energy supply and to avoid potential blackout situations in the UK.  Limejump will utilize the battery's capacity for electricity trading purposes in the years prior to the project entering the Capacity Market, at which point the guaranteed revenue stream will come online alongside ongoing trading activities.

Partner Buyout

The Company also announces the buyout of Tim Dobson's 40% and Christian Yates' 10% interests in WDD for a total potential consideration of £90,000, payable £15,000 in cash and £75,000 in Corcel new ordinary shares ("Consideration Shares") at financial close of the initial 50MW of capacity of the Burwell Project.  Financial close is defined as having a fully funded SPV to take the project forward to energization (i.e. operational capability) or any potential disposal or sale before that point.  Consideration Shares are to be priced at the 10-day trailing VWAP at the time of execution of this agreement and upon issuance will be locked up for 12 months. 

The Company thanks Tim Dobson and Christian Yates for their significant efforts originating and maturing the Burwell Project.  As future shareholders of Corcel, the Board is also delighted to maintain Tim and Christian's support with both indicating that they are available to the Company to assist with the funding of Burwell and origination of other sites as required. 

Scott Kaintz, Chief Executive Officer, commented:

"I am delighted to report that after our review we believe the project economics at the Burwell Project are robust and have therefore sanctioned the project to proceed to "shovel ready" status.  The Burwell Project has the potential to generate significant revenue for Corcel and will be a key asset for the business going forward.

"This review has also provided us with the confidence to buy out our legacy partners, thereby positioning Corcel with a 100% equity interest in the project.  We expect to be initiating discussions with project funders (likely at an SPV level) shortly whilst also remaining open to the potential for a quick sale of the project to a third party. "

For further information, please contact:

Scott Kaintz 020 7747 9960          CEO Corcel Plc

Roland Cornish/ Rosalind Hill Abrahams 020 7628 3396    NOMAD Beaumont Cornish Limited

Thomas Smith 020 7392 1432                                                 Broker Monecor (London) Ltd (ETX Capital)

Simon Woods 0207 3900 230                                                 IR Vigo Communications     

This announcement contains inside information under Article 7 of Regulation (EU) 596/2014 .

 

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