Metgasco is pleased to announce the execution of a binding term sheet for a phased investment to
acquire Patriot Hydrogen, a developer of modular waste to hydrogen production projects.
“This deal marks an important step for Metgasco as it commences its journey to becoming a leading
low-emissions, multi-fuel producer. With completion of the recent Cooper Basin sub-surface program
and gas production at Vali due to start in the fourth quarter of this year, the acquisition of Patriot
should enable us to offset these emissions while also delivering a compelling standalone commercial
opportunity” said Metgasco Managing Director, Ken Aitken.
Background and Opportunity of Patriot
Patriot is a waste to energy project developer with access to pyrolysis and gasification system
technology (supported by market exclusivity arrangements with its relevant technology partner) that
takes biomass and converts it into energy.
The 100% renewable pyrolysis gas generation model involves slowly heating biomass in an oxygen-
free chamber without burning it, meaning no carbon emissions are generated and that, over
renewable biomass gasification cycles, the carbon footprint of Patriot’s systems are negative, given
biochar by-product is reintroduced to ground as an agricultural soil improver.
The decentralised hydrogen production systems turn waste into five high-value revenue streams —
syngas (dense hydrogen) for fuel, turbine generated electricity, biochar, carbon credits and wood
vinegar for industrial and agricultural applications.
The modular units are capable of powering remote communities and operations, where appropriate
feedstock is available, making them scalable across a wide range of industries looking to reduce
emissions intensity or transition from diesel powered generation. Metgasco shares Patriot’s
enthusiasm for this potential and will bring its engineering, project management and corporate
experience and skills to bear to optimise and deliver on the large pipeline of commercial opportunities
Patriot has developed.
Patriot’s maiden unit for deployment to Kimberley Clean Energy is already manufactured and due to
be commissioned on site in Q4 CY22.
Patriot holds a memorandum of understanding with KCE for up to a further 75 units, which will be
used to reduce emissions across KCE’s operational value chain and in the wider Northern WA
After the delivery and commissioning of the first unit, Patriot will look to begin the design and
manufacturing process for the several further identified potential clients who are interested in the
Binding Term Sheet Summary: MEL’s Phased Acquisition of Patriot
The binding term sheet has been designed to allow a phased acquisition of Patriot’s business subject
to conditions precedents including successful delivery of project technical and commercial objectives
over each project stage. Key terms are outlined below.
Stage 1 – Delivery of Equipment to KCE in WA
? On execution of the binding term sheet, Metgasco will provide Patriot with certain logistical
and financial support (including a modest secured working capital facility) to provide for plant
shipment and delivery.
Stage 2- MEL equity investment into Patriot
? Subject to certain project delivery milestones, MEL will undertake a $750,000 equity
investment into Patriot as the first stage of an option to acquire 100% of the company, on the
same valuation as the final acquisition. This funding is expected to take Patriot’s KCE project
#1 to first commercial gas and revenue.
Stage 3 – All-scrip acquisition of 100% of Patriot at agreed valuation
? Subject to remaining conditions precedent, which include project and commercial outcomes,
MEL has the right to purchase 100 per cent of Patriot via an all-scrip acquisition at a
valuation of $5.9m (net of stage one and two financial investments), subject to the following
o Meeting of all project deadlines over a six-month period; including safety, technical
and commercial conditions (profitable diesel replacement / power delivery);
o Patriot confirming to Metgasco’s satisfaction execution of relevant Purchase Power
Agreement and feedstock contracts for a second energy project MEL; and,
o Subject to the other condition precedents described above having been met, and the
deal proceeding, MEL obtaining shareholder approval at the 2022 AGM for the
issuance of shares to the value of the transaction.