Hexagon Energy Materials Limited (ASX: $HXG) Key Announcement

Hexagon Energy Materials Limited (ASX: $HXG) has executed a Key Terms Agreement (KTA) with the Water Corporation of Western Australia, marking a significant step for its WAH2 low-emissions ammonia project. The KTA aims to confirm a water supply solution and negotiate a definitive agreement for the supply of water to the WAH2 Project. The KTA will expire upon execution of a definitive water supply agreement or one year after its execution.

Executive Commentary

This Key Terms Agreement with the Water Corporation is a significant step for Hexagon's WAH2 low-emissions ammonia project. It supports the removal of capital costs associated with a dedicated desalination plant and associated pipelines from the Base Case, leading to a reduction in the project's power and fuel gas requirements. Additionally, it significantly reduces the scope of environmental and regulatory approvals, thereby de-risking the project. Our target remains WAH2 FEED entry in mid-2024, contingent upon the completion of planned technical work and finalisation and execution of conditional commercial agreements for key aspects of the project.

Summary of Announcement

Hexagon Energy Materials Limited (ASX: $HXG) has made significant progress with the execution of a Key Terms Agreement (KTA) with the Water Corporation of Western Australia for its WAH2 low-emissions ammonia project. The KTA aims to confirm a water supply solution and negotiate a definitive agreement for the supply of water to the WAH2 Project. This agreement supports the removal of capital costs associated with a dedicated desalination plant and associated pipelines, leading to a reduction in the project's power and fuel gas requirements. Hexagon's target remains WAH2 FEED entry in mid-2024, and the company aims to be an early mover in supplying low-emissions ammonia to Asia Pacific markets, leveraging ammonia's advantages as a hydrogen carrier and its direct use in clean power generation.