TIDMEDL
RNS Number : 6588A
Edenville Energy PLC
23 January 2020
23 January 2020
EDENVILLE ENERGY PLC
("Edenville" or the "Company")
GBP0.7m Placing with Existing Stakeholders
Corporate Update
Tender to Rwandan Power Station
Proposed Changes to the Board
Edenville Energy Plc (AIM: EDL), the AIM quoted company
developing the Rukwa coal project in southwest Tanzania, is pleased
to announce that the Company has now completed its previously
outlined fundraising initiative, thereby securing the necessary
working capital to meet the current contracted production demands
of up to 12,000 tonnes of washed coal per month from the Company's
flagship Rukwa Coal Project ("Rukwa" or the "Project").
Placing and Proposed Loan
The Company has raised GBP700,000 (before expenses) by way of a
placing of 1,750,000,000 new ordinary shares of 0.02p each in the
Company ("Ordinary Shares") at a placing price of 0.04p per
Ordinary Share (the "Placing Shares") (the "Placing Price") with
existing stakeholders through Brandon Hill Capital Limited
("Brandon Hill") (the "Placing"). In addition, subscribers in the
Placing will be issued with one warrant for every two Placing
Shares subscribed for (the "Warrants"). The Warrants have a 2-year
life and will expire on 23 January 2022 and have an exercise price
of 0.06p per Ordinary Share.
The issue and allotment of the Placing Shares will utilise the
majority of the Company's existing share authorities. As such, the
Company will shortly be calling a General Meeting in order to seek
renewal of share authorities in order to enable any Warrant holder
to exercise their Warrants. Specific details of the General Meeting
will be announced in due course.
On 29 November 2019 the Company announced it had entered into an
agreement with a private lender, Brian McMaster, regarding a
non-convertible GBP100,000 loan (the "November 2019 Loan"). The
November 2019 Loan carries a fixed coupon rate of 20% per annum and
must be repaid on or before 25 February 2020. Brian McMaster has
agreed to subscribe for 750,000,000 Placing Shares, representing a
cash subscription of GBP300,000 as part of the Placing on the
assumption that the Company will repay the GBP120,000 that he is
owed pursuant to the terms of the November 2019 Loan on or before
25 February 2020.
To ensure sufficient access to working capital if required, the
Company has been advised by Brian McMaster that, in addition to his
direct equity of subscription for GBP300K, he would be willing to
provide a loan of GBP300K to the Company (the "Proposed Loan"). The
Proposed Loan is subject to the completion of formal documentation
and the consent of Lind Partners LLC. The terms of the Proposed
Loan are as expected to be as follows:
-- Funds under the Proposed Loan are callable at Edenville's request.
-- There would be no warrants or arrangement fees attached to
the Proposed Loan or penalties ascribed in the event no drawdown is
required by the Company.
-- Any funds drawn under the Proposed Loan will incur interest
at a rate of 12% per annum, which is repayable in full, along with
any drawn principal, upon the one year anniversary of the initial
drawdown.
A further announcement will be made in due course.
Background to Capital Raise
During 2019, Edenville funded and undertook several operational
initiatives at Rukwa designed to expand production capacity and
improve the Project's economic potential. These included
significant upgrades to the wash plant and the opening up of the
Northern Area for mining (the "Northern Area"), which has
subsequently proven to have both a better quality of coal from
previously mined areas and also better recoveries. Despite these
improvements the lack of working capital has prevented the Project
from operating effectively and has materially impacted production,
with only a de minimis level of washed coal being produced between
30 November 2019 and 22 January 2020.
A sustained marketing initiative took place in Q4 2019,
following the appointment of Alistair Muir as the Company's new
CEO, coupled with in pit and stockpile sampling highlighting the
improved quality of Rukwa coal from the Northern Area. This was
well received by existing and potential customers, culminating in
the Company entering into two new long-term contracts, as announced
on 11 December 2019, to supply a combined 9,000 tonnes of washed
coal per month to industrial customers in Rwanda and Uganda,
complimenting the Company's existing coal supply contracts.
With the proceeds of the Placing and the additional support of
Brian McMaster's Proposed Loan, the Directors believe Edenville is
now able to address the shortfall in working capital and that the
Company is in a position to begin supplying these coal contracts.
In structuring the fundraising, the Company has sought to minimise
dilution by including a standby debt component, which will only be
utilised if required to bridge any additional working capital
requirements as the Project ramps up its production to satisfy the
current contracted demand for Rukwa washed coal, which is outlined
below.
Current Coal Contacts
As announced on 11 December 2019, Edenville entered into a
contract to supply up to 6,000 tonnes of washed coal per month with
Tara Group Ltd and a separate contract for up to 3,000 tonnes of
washed coal per month with Springwood Capital Ltd. These contracts
compliment a standing order for 500 tonnes per month from a
Tanzanian industrial user in Arusha and an up to 2,500 tonnes per
month order from a cement manufacturer located near Dar Es Salaam
in Tanzania.
In addition, the Company has received enquiries from a potential
customer in the Democratic Republic of the Congo for the supply of
washed coal to a cement works on Lake Tanganyika. The Company is
also engaged in discussions with several other potential purchasers
of Rukwa coal and although no assurances can be given that
long-term contracts will materialise, the Directors are confident
that once additional stockpiles are at site, new supply contracts
should be forthcoming.
Funding Agreement with Lind
As previously announced, it is the current intention of the
Company to repay its outstanding funding agreement (the "Funding
Agreement") with Lind Partners LLC ("Lind"), that was first
announced on 6 November 2018 and further detailed in the Company's
announcement of 29 April 2019, in cash. Since the repayment holiday
ended in August 2019 all cash payments under the repayment schedule
have been made to Lind to date. Consequently, a balance of
US$737,437.48 now remains outstanding under the Funding Agreement,
repayable on a monthly basis at an amount of US$50,637.38 per
month.
Rwandan Power Station Tender
The Company is pleased to advise that its subsidiary Edenville
International (Tanzania) Limited recently lodged a tender for the
supply of 12,000 tonnes of washed coal to a Rwandan power station.
The Company believes it is geographically well placed to provide
coal at a competitive price compared to other potential suppliers
and is awaiting the outcome of this tender. Further announcements
regarding this tender will be made as appropriate.
Proposed Board Changes
The Company announces that Rufus Short has indicated his desire
to step down from his current role as Non-Executive Director before
31 March 2020. The Company would like to thank Rufus for his
service to the Company during exceedingly difficult times in global
markets, particularly for junior mining companies.
The Company intends to appoint a new Non-Executive Director to
coincide with Mr Short stepping down as a Director and will make a
further announcement in due course.
Edenville CEO, Alistair Muir, commented:
"Firstly, I would like to thank all our existing shareholders
for their patience and support. Whilst I have only been involved
with the Company for a comparatively short space of time, I am
encouraged by what I have seen at site and during the various
discussions with potential customers. There is a clear demand for
Rukwa coal and my energies are focused on translating this interest
into sales and cashflow for Edenville.
"Following the work undertaken at site last year, the coal seams
have been opened up in the Northern Area and the wash plant has
been upgraded to improve efficiencies. Now that the working capital
issues have been addressed, I believe Edenville is well placed to
be cash flow positive this year, as we start to deliver on our
contracted orders. To ensure this happens I will be spending much
of the next few months in Tanzania to both monitor the ramp up of
the Project, whilst overseeing the proposed consolidation and
expansion of our customer base.
"Moreover, we are also looking at development scenarios that
will enable us to further increase production beyond the current
capacity of the wash plant, which we estimate is in the order of
12,500 tonnes per month (assuming a plant availability of 66%), in
the event some of the targeted additional contracts come to
fruition."
Admission to AIM
Application will be made for the admission of the Placing Shares
to trading on AIM ("Admission"). Admission is expected to occur at
8am on or around 29 January 2020. The Placing Shares will rank pari
passu with the existing Ordinary Shares.
Significant Shareholder Participation
Brandon Hill and its executives, namely Neal Griffith and Oliver
Stansfield (collectively the "Brandon Hill Group"), who currently
hold 1,201,000,500 Ordinary Shares representing 23.7% of the
Company's issued share capital, have agreed to subscribe for, in
aggregate, 225,000,000 Placing Shares representing a cash
subscription of GBP90,000. Upon Admission of the Placing Shares,
the Brandon Hill Group's revised holding of 1,426,000,500 Ordinary
Shares will represent 20.9% of the Company's enlarged share
capital.
Pitchcroft Capital Limited and its executives, namely Alexander
Fullard, William Orgee and David Thomas (collectively the
"Pitchcroft Group"), who currently hold 1,053,959,224 Ordinary
Shares representing 20.8% of the Company's issued share capital,
have agreed to subscribe for, in aggregate, 150,000,00 Placing
Shares representing a cash subscription of GBP60,000. Upon
Admission of the Placing Shares, the Pitchcroft Group's revised
holding of 1,203,959,224 Ordinary Shares will represent 17.7% of
the Company's enlarged share capital.
Brian McMaster, the provider of the November 2019 Loan and the
Proposed Loan, has also agreed to subscribe for 750,000,000 Placing
Shares, representing a cash subscription of GBP300,000. Upon
Admission of the Placing Shares Brian McMaster's holding of
750,000,000 Ordinary Shares will represent 11.0% of the Company's
enlarged share capital.
John Story, who currently has a beneficial interest in
250,000,000 Ordinary Shares has agreed to subscribe for 625,000,000
Placing Shares, representing a cash subscription of GBP250,000.
Upon Admission of the Placing Shares, John Story's holding of
875,000,000 Ordinary Shares will represent 12.8% of the Company's
enlarged share capital.
Related Party Transaction
Both the Brandon Hill Group and the Pitchcroft Group are
existing substantial shareholders of the Company (the "Related
Parties"). Accordingly, the participation of the Related Parties in
the Placing constitutes a related party transaction pursuant to
Rule 13 of the AIM Rules for Companies.
The Directors, having consulted with the Company's nominated
adviser, consider that the terms of the Related Parties'
participation in the Placing are fair and reasonable insofar as
Edenville's shareholders are concerned.
Total Voting Rights
Following Admission, the Company will have 6,812,241,762
Ordinary Shares in issue, each share carrying the right to one
vote. The Company does not hold any Ordinary Shares in treasury.
The above figure of 6,812,241,762 Ordinary Shares may be used by
shareholders in the Company as the denominator for the calculations
by which they will determine if they are required to notify their
interest in, or a change to their interest in, the share capital of
the Company under the Financial Conduct Authority's Disclosure and
Transparency Rules.
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
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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