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Leigh Creek Energy secures $4M facility to advance syngas project

The facility is with the Commonwealth Bank of Australia.
Leigh Creek Energy secures $4M facility to advance syngas project
Leigh Creek has started demonstration stage activities

Leigh Creek Energy (ASX:LCK) has established a $4 million research and development working capital facility with the Commonwealth Bank of Australia (ASX:CBA).

The company will utilise its eligibility to claim tax offsets for expenditure of circa $21 million to be incurred on the pre-commercial demonstration stage of the Leigh Creek Energy Project (LCEP).

The 12-month facility with the CBA effectively allows Leigh Creek to bring forward access to refundable tax offsets by providing a progressive drawdown of eligible project expenditure of up to $4 million.

The LCEP is located in South Australia and has a resource of 2,964 petajoules (PJ) of syngas.

Syngas, or synthesis gas, is a fuel gas mixture consisting primarily of hydrogen, carbon monoxide, and very often some carbon dioxide.

Last month, Leigh Creek completed a successful scoping study for the LCEP and has now commenced a pre-feasibility study.

The company has concluded that the cases for both syngas fired electricity generation and natural gas are sufficiently robust to support advancing LCEP to the next stage.

The new facility provides Leigh Creek with funds to expedite progress on the pre-commercial demonstration stage activities at LCEP.

The company had a cash balance of about $3 million as at 31 December 2016.

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