Edenville Energy PLC Two New Coal Supply Contracts Signed (4309W)
December 11 2019 - 2:00AM
UK Regulatory
TIDMEDL
RNS Number : 4309W
Edenville Energy PLC
11 December 2019
11 December 2019
EDENVILLE ENERGY PLC
("Edenville" or the "Company")
Two New Coal Supply Contracts Signed for up to 9,000 tonnes per
Month
Edenville Energy Plc (AIM: EDL), the AIM quoted company
developing the Rukwa coal project in southwest Tanzania, is pleased
to announce the signing of two new significant contracts to supply
washed coal from the Company's flagship Rukwa Coal Project ("Rukwa"
or the "Project").
Since the opening up the Northern Mining Area earlier this year,
the Company has expanded its marketing efforts in the countries to
the north of Tanzania, in particular Uganda, Rwanda, and Burundi,
where the Company's Directors believe Edenville has a competitive
advantage over other Tanzanian coal producers, many of whom are
located up to 700km further south of Rukwa.
As a result of this the Company is pleased to announce it has
signed two contracts to supply up to 6,000 tonnes and up to 3,000
tonnes respectively of washed coal per month to industrial
customers in Rwanda and Uganda.
The up to 6,000 tonnes per month contract has been signed with a
Rwandan company, Tara Group Ltd, which is a wholly owned subsidiary
of Tanzanian company, Kitanyoe Group Company Ltd, which currently
supplies coal, gypsum, limestone and calcite to industrial users.
The end user for the Company's coal is expected to be a major
cement manufacturer in Rwanda.
The up to 3,000 tonnes per month contract has been signed with a
Ugandan company, Springwood Capital Ltd, ("Springwood") with the
expected end user being a Kampala based steel works. As with the
Tanzanian agent, Springwood supplies limestone, gypsum, calcite and
iron ore to consumers in Uganda and Kenya.
The Rwanda contract is of particular note to the Project as it
has the potential to open up a major new transport route for the
Company's coal on Lake Tanganyika to both Rwanda and Barundi. This
is a route that is both shorter than conventional truck transport
and is more cost-effective, using low cost barge transport.
In aggregate these two new contracts represent a supply of up to
9,000 tonnes per month, which accounts for approximately 75% of the
current capacity of the recently refurbished wash plant. The new
contracts will also complement the existing long-term
contracts.
Progression of these supply arrangements is, however, dependent
on the Company securing sufficient operating capital to fund
production, as detailed in the Company's announcement on 29
November 2019.
In this regard discussions with the potential strategic investor
in the Project are progressing and a second investor has expressed
interest in becoming involved with the Company as a strategic
shareholder at the Company level. Whilst there is currently no
certainty that these negotiations will lead to a successful outcome
for Edenville, the Board believes that the two coal new contracts
increase the attractiveness of both the Project and the Company for
potential investors. Further announcements will be made on these
matters as appropriate.
Assuming sufficient working capital is available, the Company
expects to be in a position to supply coal on an ongoing basis
under these contracts before the end of Q1 2020. As previously
reported, Edenville expect cashflow breakeven at Rukwa at around
4,500 tonnes of washed coal sold per month and has a target of
achieving this by May 2020.
Alistair Muir, Chief Executive Officer of Edenville, commented:
"I would like to acknowledge the Project team's efforts, and
particularly those of former CEO Rufus Short, for their groundwork
and efforts in making these contracts possible. The Project has a
significant advantage being the most northerly coal mine in the
region by some 700km. I believe these contracts represent an
important first step; now Rukwa has to deliver and assuming the
required operational funds are secured we should see the mine and
plant delivering as initially planned and our goal of becoming cash
flow positive being realised. I look forward to providing our
shareholders with further updates in due course."
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
Alistair Muir - CEO +44 (0) 20 3934 6630
SP Angel Corporate Finance LLP
(Nominated Adviser and Joint Broker)
David Hignell
Charlie Bouverat
Abigail Wayne +44 (0) 20 3470 0470
Brandon Hill Capital Ltd
(Joint Broker)
Oliver Stansfield, Jonathan Evans +44 20 7936 5200
IFC Advisory Limited
(Financial PR and IR)
Tim Metcalfe
Graham Herring
Florence Chandler +44 (0) 20 3934 6630
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END
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