Yara Offtake Heads of Terms for Villeta Project

ATOME PLC

24 July 2024

 

​24 July 2024

ATOME PLC

("ATOME", "the Company", or "the Group")

Offtake heads of terms signed with Yara for 100% of Villeta Project production

Key gating item complete on the road to FID and start of construction later this year

Investor Meet Company Presentation

ATOME (AIM: ATOM), the leading developer of international green fertiliser projects, is pleased to announce the signing of Heads of Terms for the long-term sale to Yara International ASA ("Yara") of all of ATOME's renewable fertiliser from its 145MW Villeta Project in Paraguay ("Offtake" or "Heads of Terms").

Highlights:

·   Long-term Offtake with Yara for ATOME's renewable Calcium Ammonium Nitrate covering the entire planned 264,000 tonnes p.a production from Villeta

·    Yara is the world's leading crop nutrition, production and distribution company of fertiliser and ammonia product and is at the forefront of decarbonisation in its industry with Government of Norway the largest shareholder with 43% direct and indirect ownership

·   With Front End Engineering and Design ("FEED") completed, Offtake has now secured a key gating item on the way to achieve full financing of the Villeta Project, Final Investment Decision ("FID") and start of construction later this year

·    Validates ATOME's commercial proposition and leadership in the production of renewable fertilisers

·   Supports ATOME's pipeline of projects with income generation and operational profitability for Villeta targeted to commence in 2027

Olivier Mussat, ATOME CEO, commented:

"The entry into this strategic relationship with global crop nutrition leader Yara is a significant milestone for ATOME on the path to realise our flagship Villeta Project which will be one of the largest renewable fertiliser production facilities in the Western Hemisphere. Proving significant off-taker interest for our renewable product gives a clear path to the finalisation of funding, FID and the commencement of work onsite at Villeta.

Importantly, it provides the confidence for ATOME to now accelerate the development of its project pipeline, including the 300MW Yguazu project in Paraguay and the 120MW Costa Rica projects.

"We are grateful for the work and the trust of the team at Yara and we look forward to a long and mutually beneficial relationship."

Chrystel Monthean, EVP Americas at Yara, commented:

"Decarbonizing the food systems is at the forefront of our strategy. Many of the food companies active in South America have committed to decarbonization targets and our collaboration with them reveals that the decarbonization of the production of fertilisers combined with the use of agronomical best practices can significantly reduce the crops' carbon footprint. Signing the Heads of Terms with ATOME for the Villeta project is a first step to open the opportunity to further expand our portfolio with fertilisers produced with renewable energy in the Americas. The fertilisers from Villeta will become part of a new portfolio called Yara Climate Choice, including fertilisers based upon renewable energy and carbon, capture and storage. The project's in-land location could open logistical advantages for some of our growing markets in Mercosur.

We are looking forward to developing a strategic long term relationship with ATOME."

The Heads of Terms

Subject to the entry into a definitive agreement anticipated before the end of Q4 this year, the Heads of Terms covers all of ATOME's Villeta production and validates the commerciality of ATOME's business model reflecting both a price protection mechanism for ATOME underpinned by current market rates, and a premium upside sharing formula for ATOME's product pricing, whilst providing Yara, over a long term, the supply of renewable fertiliser with a particular emphasis on the growing Latin American markets.

Yara will work to maximise market potential and the premium value proposition of the renewable product benefitting from Yara's extensive sales, marketing and distribution network combined with decades of experience in global markets.

Gateway to Final Investment Decision ("FID")

Offtake was a key gating item successfully crossed in order to proceed with the next steps of finalising the funding for the project and deliver FID, leading to the commencement of construction later this year. This significant milestone follows on from the progress already achieved by ATOME including the grant of Environmental and Operational licenses, obtaining Free Trade Zone status at Villeta, necessary land acquisition, the FEED completion and the bringing of EPC discussions to a point of readiness for pressing the green button later this year.

In respect of the funding of Villeta, led by ATOME's international financial advisors, Natixis CIB, the debt portion for the project is now nearly three times covered by solid expressions of interest with substantive and encouraging equity discussions with international players taking place and moving to next stage of the process, all such being on a project level.

Investor Presentation via Investor Meet Company

Olivier Mussat, CEO of ATOME will provide a live presentation via Investor Meet Company on Thursday 25 July 2024 at 11:00am BST relating to the announcement on offtake and general business update.

The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via the Investor Meet Company dashboard up until 09:00 BST, 25 July 2024, or at any time during the live presentation. Investors who already follow ATOME PLC on the Investor Meet Company platform will automatically be invited.

Investors can sign up to Investor Meet Company for free and add to meet ATOME PLC via:

https://www.investormeetcompany.com/atome-plc/register-investor

A copy of the the updated presentation along with a recording of the live presentation via Investor Meet Company will be available on the Company's website: https://www.atomeplc.com/

For more information, please visit https://www.atomeplc.com or contact:

ATOME PLC Nikita Levine, Investor Relations	[phone] [e-mail]
Beaumont Cornish (Nominated Adviser) Roland Cornish, Michael Cornish	[phone]
SP Angel (Broker) Richard Hail, Caroline Rowe	[phone]
FTI Consulting (Strategic Communications) Elizabeth Adams, Ben Brewerton	[phone] [e-mail]

About Yara International ASA

Yara's mission is to responsibly feed the world and protect the planet. Yara pursues a strategy of sustainable value growth through reducing emissions from crop nutrition production and developing low-emission energy solutions. Yara's ambition is focused on growing a nature-positive food future that creates value for its customers, shareholders and society at large and delivers a more sustainable food value chain.

To drive the green transition in fertiliser production, shipping, and other energy-intensive industries, Yara will produce ammonia with significantly lower emissions. Yara provides digital tools for precision farming and work closely with partners at all levels of the food value chain to share knowledge and promote more efficient and sustainable solutions.

Founded in 1905 to solve the emerging famine in Europe, Yara has established a unique position as the industry's only global crop nutrition company. With 18,000 employees and operations in more than 60 countries, sustainability is an integral part of our business model. In 2023, Yara reported revenues of USD 15.5 billion.

About ATOME

ATOME PLC is an AIM listed company targeting green fertiliser production with 445-megawatt of projects in Paraguay and a further pipeline of potential projects in Central America.

The first project is at Villeta in Paraguay. It benefits from a 145MW renewable power purchase agreement and 30 hectares of land in a tax free zone. Front End Engineering Design studies have been completed and Heads of Terms signed with Yara, the leading international fertiliser company for offtake of all of Villeta's production. The Company is now negotiating the project finance with a view to closing that and declaring FID before end 2024. There is a further 300MW of renewable power reserved for ATOME in Paraguay.

In Costa Rica, The National Ammonia Corporation S.A. was formed in 2022 with local partner Cavendish S.A. based in Costa Rica to develop green fertiliser projects for the region. As well as straddling the Pacific and Atlantic Oceans, Costa Rica is a democratic Central American country. In agriculture, Costa Rica is the second largest supplier of pineapples in the world and is in the top ten banana growers.

All power for ATOME is from 100% renewable sources and all chosen sites are located close to the power and water sources and export facilities to serve significant domestic and then international demand.

The Company has a green-focused Board which is supported by major shareholders including Peter Levine, Schroders, a leading fund manager, and Baker Hughes, a global technology company operating in the energy and industry sectors.

MAR

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon publication of this announcement, this inside information is now considered to be in the public domain. The person who arranged for the release of this announcement on behalf of the Company was Peter Levine, Chairman.

Other information

Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated Adviser and is authorised and regulated by the FCA. Beaumont Cornish's responsibilities as the Company's Nominated Adviser, including a responsibility to advise and guide the Company on its responsibilities under the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed solely to the London Stock Exchange. Beaumont Cornish is not acting for and will not be responsible to any other persons for providing protections afforded to customers of Beaumont Cornish nor for advising them in relation to the proposed arrangements described in this announcement or any matter referred to in it.

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