Montem Resources studies confirm potential for TM-REX as key renewable energy project

Montem Resources Ltd (ASX:MR1) is buoyed by positive pre-feasibility studies (PFS) for two elements of the Tent Mountain Renewable Energy Complex (TM-REX) in Alberta, Canada, that confirm it as an important renewable energy project with robust economics.

The company says the studies for the Pumped Hydro Energy Storage (PHES) and Green Hydrogen Electrolyser elements show the project is “outstanding” and the economics are “compelling”.

Pre-feasibility engineering and design, cost estimates and project economics for the PHES element have been completed by Hatch Engineering while a business case analysis has been carried out by GHD for the Green Hydrogen Electrolyser element.

Adding to Montem’s confidence in the TM-REX future has been the signing of a framework agreement with the Piikani Nation with Tent Mountain lying within the Piikani’s traditional territory.

Our conviction “yielding results”

Montem’s CEO Peter Doyle said: “Following a period of sustained activity, we are excited to complete the PFS and have confirmed the TM-REX as an important energy infrastructure project.”

“Our conviction to explore an alternate development pathway to the coal mine at Tent Mountain is yielding results.

“We now have a viable alternate investment at Tent Mountain, with the potential for strong returns, and importantly, a social licence to pursue this investment.

“We continue to receive support for TM-REX from Indigenous and local communities, and the provincial government. We are working with the Piikani Nation on advancing this important infrastructure project for southern Alberta.

“We have an exciting phase of work ahead at Tent Mountain and we are well underway in advancing commercial aspects to find a strategic partner to work with us to develop the TM-REX.”

Leveraging existing assets

The proposed Tent Mountain PHES will leverage Montem’s existing assets at Tent Mountain, including a large water reservoir on Montem’s freehold land, which was left behind from historical mining operations.

TM-PHES design and layout positioned on current landscape, of the historical Tent Mountain Mine, on freehold land owned by Montem.

The site, in the Crowsnest Pass, Alberta, is close to important infrastructure including high voltage power lines and interprovincial Highway 3.

Montem has completed its initial investigations into the potential transition of the Tent Mountain Mine into a renewable energy complex.

Strong economics

It says the results of the PFS are compelling, identifying no fatal flaws and strong economics.

Together, the Tent Mountain PHES (TM-PHES) and Green Hydrogen Electrolyser have the potential to provide strong returns for shareholders and to create value for Alberta.

The TM-REX development concept includes three primary elements:

• 320 MW/2,560 MWh Pumped Hydro Energy Storage;
• 100 MW Green Hydrogen Electrolyser; and
• 100 MW Wind Farm (offsite).

The PFS by Hatch details the TM-PHES development concept for an 80+ year project life with a 320 MW installed capacity, 2,560 MWh storage capacity allowing for eight hours of continuous generation.

Proposal to lift reservoir size

It determined that based on the current data, there are no geotechnical fatal flaws in developing the TM-PHES and recommends that optimization work be completed to investigate increasing the size of the TM-PHES upper reservoir.

This could be done with potentially low capital cost and would have the potential to almost double the energy storage capacity to 4,955 MWh, providing continuous generation for 15 hours.

Hatch estimates an additional direct capital cost of approximately C$35 million will be required to increase the upper reservoir storage capacity.

Tent Mountain Mine Pit 4 which will be repurposed as the TM-PHES upper reservoir.

The PFS also identified nearby interconnection options for both the 500 kV and 240 kV transmission line to connect the TM-PHES to the Alberta power grid, and the relevant applications for connection are lodged.

Montem says results of the PFS returned compelling capital cost estimates for the TM-PHES that support attractive base case economics, with material upside for project economics in an evaluated 'Net Zero Electricity' market scenario.

Favourable comparison

The TM-PHES compares favourably to similar PHES projects in North America and to the Kidston PHES project in Queensland, Australia.

Primary reasons for the TM-PHES cost competitiveness are due to the 300-metre head between the upper and lower reservoirs and the ability to leverage Montem’s existing assets at Tent Mountain, including the large water reservoir on Montem’s freehold land.

TM-PHES also benefits from its proximity to the Alberta power grid, which significantly reduces the capital cost, permitting requirements, and environmental footprint typical of large-scale energy projects.

The next stage of project engineering will be to complete additional geotechnical work in order to provide site-specific geotechnical conditions for each of the major PHES civil structures. Following the geotechnical work, Montem will complete the front-end engineering design (FEED) work.

Green Hydrogen Electrolyser

The GHD study for the Green Hydrogen Electrolyser identified the optimum business case which includes co-location of the electrolyser facility 'behind the meter' with a renewable energy source, such as an offsite wind farm.

Subject to further evaluation, the Tent Mountain Green Hydrogen Electrolyser has the potential to meet growing global hydrogen demand. The project could be scalable, starting with a 10 MW pilot plant before expanding to a 100 MW facility.

In conjunction with GHD, Montem continues to explore potential customers for the green hydrogen produced at TM-REX, aiming to leverage nearby key infrastructure and major transportation industries.

Piikani Nation agreement

Tent Mountain is in the traditional territory of the Piikani Nation, with Piikani’s reserve lands in the heart of southern Alberta’s wind power generating region.

Signing of the agreement with the Piikani was witnessed by Alberta Minister of Indigenous Relations Rick Wilson and Alberta Minister of Environment and Parks Whitney Issik.

The agreement creates a framework for cooperation in relation to review of the development concept of the PHES. Under the agreement:

• The parties agree to work together to implement a negotiation process.
• To work together to jointly develop an engagement strategy with relevant stakeholders.
• Montem commits to provide regular updates on the PHEs, including its potential impacts, benefits and economic opportunities.
• The parties nominate the primary representatives of each party.
• Montem agrees to reimburse certain costs of Piikani.

“A major milestone”

Peter Doyle said: “The signing of an agreement with the Piikani Nation is a major milestone for Montem.

"We are excited by the opportunity to develop a meaningful partnership with the Nation that will deliver mutual benefits. Piikani will add value to our developments within the Piikani Traditional Territory.

"For Montem it represents our first significant agreement with an Indigenous group, and we couldn't be more pleased than to have an agreement with the Piikani Nation.”