LONDON (Alliance News) - Nova Resources Ltd Monday said Enersty Co Ltd has secured an offtake contract with Hansung Industries Co Ltd.
The energy investor said, as part of the deal, Hansung will purchase steam from a renewable energy plant which is to be built, owned and managed by Enerstry Co Ltd.
Nova has a 23.72% holding in Enerstry Group, which has a 93.33% holding in Enersty Co Ltd.
The plant will use wood pellets as fuel to create heat energy and steam at the Korean site, which the company expects to complete, test and commission by August 31.
Construction of the plant will be funded through a combination of debt finance, which has already been secured, and existing cash resources.
Under the ten-year agreement, Hansung will pay for the heat energy supplied and at the end of the term, the offtake agreement may be renegotiated.
Enerstry expects the Hansung plant to start generating revenues in September 2014 and could achieve revenues of roughly USD700,000 per year.
Nova Resources also receives revenues from Enersty's ongoing deal with Yonsei Milk, under which Enersty provides heat energy and steam for the milk producer, through a plant that was commissioned at the end of November 2013.
The company said that the Hansung and Yonsei plants are worth expected total combined revenues of USD19.5 million over ten years.
Nova Resources shares were up 17% to 2.22 pence, putting it in the top three AIM movers in early trading Monday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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