Edenville Energy PLC Corporate Update (5748U)
April 01 2019 - 2:00AM
UK Regulatory
TIDMEDL
RNS Number : 5748U
Edenville Energy PLC
01 April 2019
1 April 2019
EDENVILLE ENERGY PLC
("Edenville" or the "Company")
Corporate Update
Edenville Energy Plc (AIM: EDL), the AIM quoted company
developing a coal project in southwest Tanzania, provides an update
on corporate developments and current operations at the Company's
Rukwa Coal Project (the "Project").
On 15 February 2019 the Company announced that it had raised
gross proceeds of GBP62,418 from an open offer to existing
shareholders (the "Open Offer"), coupled with a further GBP15,000
that was raised following a subscription for ordinary shares by
Jeffrey Malaihollo, the Company's Chairman. The Open Offer sought
to raise gross proceeds of up to GBP619,099 to strengthen
Edenville's balance sheet and to progress the Company's operations
at the Project, one task to specifically increase the available Run
of Mine ("ROM") coal for processing through the opening up of the
Company's northern pit area.
Given the low level of take up from the Open Offer, progress at
the Project has been limited and the Company's operations have been
constrained due to cost cutting measures implemented by the
Company's Directors to preserve working capital. As a result, and
despite having the requisite approvals, the Company has as yet been
unable to expand its operations or increase mining capacity by
opening up the northern mining area.
Coal Production and Sales
ROM Coal
Between 1 January 2019 and 26 March 2019, Edenville processed
approximately 17,760 tonnes of ROM coal, producing approximately
3,116 tonnes of washed coal to customer's specifications and
approximately 7,992 tonnes of fine coal. In 2019 to date,
approximately 3,510 tonnes of coal have been sold and shipped, the
majority being washed coal. These production numbers are currently
unaudited and may be subject to variations upon plant and mine
reconciliation. In addition, the Company has stockpiles of
unprocessed, part processed and fine coal, in addition to the coal
that is being mined on a daily basis.
The recent upgrades on the plant are all operational. The
Lamella water treatment plant has been operating since January 2019
and is providing clean recycled water for the main wash plant. The
pre-screen has been fully operational since the end of January 2019
and separates out fines and large size material prior to the coal
reaching the main plant. These units are performing as planned.
Due to constrained working capital, the supply of consumables
such as fuel and magnetite have been adversely affected, resulting
in falling production rates over Q1 2019. In addition, access to
the northern mining area and 24 hour operation has been put on hold
until capital is available to open up this additional supply of
coal. Until additional capital can be applied to these and other
parts of the Project, management do not expect production to
increase from current levels.
The Company has been conserving available capital and cash
wherever possible whilst keeping the operation producing for our
core customers.
Fine Coal
Fine coal is being sold from the approximately 40,000 tonne fine
coal stock pile the Company has at the Project site and that is
being produced on a daily basis from the mining and processing
activities. The sale of fine coal is providing an additional income
stream for the Company and several customers are taking regular
shipments.
In addition, the Company has received an order for 1,000 tonnes
of fine coal. The Board anticipate that this order will be followed
up with a continuing regular monthly order for between 5,000 and
10,000 tonnes per month. Detailed planning on logistics and
transport is currently taking place and although no assurances can
be given, the Directors are confident that an appropriate contract
can be finalised. The Directors expect the sales of fine coal to
provide an increasing source of revenue for the Company over the
remaining three quarters of 2019 and beyond.
Tanesco Update
To date the Company has received no detailed explanation as to
why Tanzania Electricity Supply Company ("Tanesco") did not move
forward with the previously anticipated coal to power generation
plans following the recent Request for Qualification (RFQ)
submissions in October and December 2018. Subsequently the Company
is concentrating on its commercial coal operations, whilst
maintaining a dialogue with Tanesco, until the economic and
political environment for coal to power generation in Tanzania is
more clearly defined by the appropriate authorities.
Company Funding
Due to the shortfall in the proceeds of the Open Offer the
Company will need to raise additional capital in the near term in
order to meet its Project and corporate commitments and is
currently exploring several options at both a Company and Project
level. A further update regarding financing will be made as soon as
practicable.
In addition, the Directors have implemented certain cost cutting
measures at the Project, including stopping overburden movement and
focusing on more easily accessible coal. Further corporate cost
cutting measures have been undertaken and the Directors have not
taken their salaries since December 2018, after only taking part of
their salary entitlements in 2018.
2018 Annual Results
The audit for the year ended 31 December 2018 is now underway
and Edenville expects to release its full year results for the year
ended 31 December 2018 in early June 2019.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
For further information please contact:
Edenville Energy Plc
Jeff Malaihollo - Chairman
Rufus Short - CEO +44 (0) 20 3934 6630
SP Angel Corporate Finance
LLP
(Nominated Adviser and Broker)
David Hignell
Jamie Spotswood
Abigail Wayne +44 (0) 20 3470 0470
IFC Advisory
(Financial PR and IR)
Tim Metcalfe
Graham Herring
Heather Armstrong +44 (0) 20 3934 6630
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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