Why the Province Resources (ASX:PRL) share price just hit an all-time high

The Province Resources (ASX: PRL) share price is flying high today as the company announced a landmark new deal. We take a closer look.

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The Province Resources Ltd (ASX: PRL) share price is storming higher today as the company announced a new, global green hydrogen project.

Shares in the small-cap natural resources company have been surging higher in recent times, reaching an all-time high of 20 cents this morning.

Currently, the Province Resources share price is sitting at 18 cents, up 24.14% on Friday’s close.

Green hydrogen

Dubbed the ‘fuel of the future’, green hydrogen has been part of a global thematic that has “seen billions of dollars of invested capital” flow into the industry. According to an ABC report, the estimated potential demand for imported hydrogen in China, Japan, South Korea and Singapore alone could reach $9.5 billion by 2030.

Nonetheless, as the article explains, hydrogen still has caveats. Hydrogen is so small that it can escape through solid steel, meaning new piping systems would have to be developed. Moreover, it is one of the most flammable gases on the planet.

Total Eren partnership

Returning from its trading halt today, Province Resources announced that it had signed an agreement with France-based company Total Eren. Signed on 16 April, the binding memorandum of understanding (MoU) is to perform a feasibility study in the view of potentially developing a major green hydrogen project.

The project, earmarked for the Gascoyne region of Western Australia, will be equally owned by the two companies. However, it is conditional on the feasibility study which will be completed in approximately 4 months.

The project will be developed in two stages totalling up to 8 Giga Watts in installed renewable energy capacity. 

From the management

Commenting on the news, Province Resources managing director David Frances said:

Given the recent drive by state and federal governments to quickly develop and advance the green hydrogen industry in Australia, I am confident this project will be of strategic national importance.

Province is excited to have a global renewable energy leader such as Total Eren as a partner with the technical and financial capability to help Province deliver this project as part of the backbone of the nation’s hydrogen strategy.

So what

Total Eren is an independent power producer from renewable energy sources with more than 3.3 Giga Watts of renewable energy plants worldwide. In Australia, the company owns Victoria’s largest solar farm.

Regarding the news, the Province Resources share price has flown higher, gaining an impressive 24.14% at the time of writing.

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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