“This is the largest tenure position on potential naturally occurring hydrogen resources in Australia,” the pitch said.
As hydrogen is the new energy terrain for the Australian energy market, the company is taking the age-old route of the Australian resource explorer to fund itself in production: an IPO and reliance on equity capital markets. It is seeking to raise $25 million at 50¢ per share, for a one-third stake in Gold Hydrogen Ltd.
Fund managers and brokers in the Morgans Network have begun digging into Gold Hydrogen’s claims, including that it will be able to produce hydrogen for 50¢ per kilogram (which is 10 to 20 times cheaper than the natural gas, coal, etc.), and would be 100 percent carbon neutral. Morgans is trying to bring investors up to speed on the natural hydrogen industry, as well as the IPO candidate.
On Thursday, Gold Hydrogen will pitch potential investors in Brisbane – the heartland of Morgans – and made calls with funds in Melbourne and Sydney this week.
The group told potential backers that more than 80% of the proceeds from the IPO would be used for exploration and development over the next two years. Underwriting and IPO costs would be just $1.64 million.
Its stage one drilling program was due to start in the third quarter of next year on the Yorke Peninsula.
Although this is a relatively small deal, there will be heightened interest given the changes in the energy sector and investors’ search for the next big thing. If nothing else, we’re sure this will be the first of many hydrogen IPOs to cross Street Talk’s desk in the years to come.