I don't see what difference whether the students are from the same school or different school would make. Moodle is web-based, means remote. As I understand it, this is about a number of students doing a project together. The question is whether the Moodle platform could support them.
I would say, Yes, Moodle has a lot of helpful tools. The only danger is that there are too many. Unless somebody (you?) can guild them, they wouldn't go anywhere.
To quote a very, very old example I know first hand: Four good students built a "study group" right at the beginning of their four year programme. The college had an official but half-hearted Moodle. They requested a Moodle course for themselves and kept on uploading their notes, exercises, sample solutions and many more on all their subjects and courses as they were happening. They built a kind of alternative curriculum. Needless to say, they finished the programme with flying colours.
So, in essence, trying to imagine how your project teams would look like, without seeing Moodle, or any other collaboration tool for that matter, is fruitless. Get a trial Moodle, for example from
Moodle Cloud and see for yourself. Moodle comes all free and even for a time freely hosted, but there is no Moodle drink, free of otherwise, which makes you to dive in to it.
P.S. You know that there are countless collaboration tools. Unless you already
host Moodle, may be you want to evaluate other products too.
P.P.S. I can see you entered Moodle in December 2005. But then from somewhere 2006 until recently, you have a vacuum. Can you explain the history, so that people can give a more targeted answer?