TIDMTLOU
RNS Number : 4321Q
Tlou Energy Ltd
26 February 2021
26 February 2021
Tlou Energy Limited
("Tlou" or "the Company")
Interim Results
Tlou Energy Limited is focused on delivering cleaner energy
solutions to Botswana and southern Africa using gas and solar to
alleviate some of the chronic power shortage in the region. Tlou's
objective is to be the first carbon neutral power producer in
Botswana.
The Company's half year report for the six months ended 31
December 2020 is available on the Company's website at
www.tlouenergy.com/reports
By Authority of the Board of Directors
Mr. Anthony Gilby
Managing Director
For further information regarding this announcement please
contact:
Tlou Energy Limited +61 7 3012 9793
Tony Gilby, Managing Director
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Solomon Rowland, General Manager
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+44 (0)20 7383
Grant Thornton (Nominated Adviser) 5100
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Colin Aaronson, Harrison Clarke, Samantha Harrison,
Seamus Fricker
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+44 (0) 207 408
Shore Capital (Broker) 4090
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Jerry Keen, Toby Gibbs, John More
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Company Information
Tlou Energy is focused on delivering Power solutions in Botswana
and southern Africa to alleviate some of the chronic power shortage
in the region. Tlou is currently developing projects using coal bed
methane (CBM) natural gas and plans to combine this with solar
power to provide a clean base load power source.
Botswana has a significant energy shortage and generally relies
on imported power and diesel generation to fulfil its power
requirements. Tlou's Lesedi Power Project provides investors with
access to a compelling opportunity to displace expensive, carbon
intensive diesel and imported electricity with a local clean, green
and more environmentally friendly alternative.
In addition to plans for clean energy, the Company is also
committed to developing community projects in Botswana adding real
value to peoples' lives in a region with sparse services and where
few opportunities exist for the local population. This includes
work to assist communities to become self-sustaining, develop
business opportunities, improve access to education, and create
opportunities for self-employment and wealth creation.
The Company is listed on the Australian Securities Exchange,
London's AIM market and the Botswana Stock Exchange and is led by
an experienced Board, management and advisory team.
The project is significantly de-risked. The Company produced its
first gas in 2014, has a Mining (or development) Licence valid to
2042 and 10 Prospecting (or exploration) Licences. The Company's
project acreage covers a vast area spanning approximately 9,300
Km(2) in total.
Tlou's 'Lesedi' and 'Mamba' projects already benefit from
significant independently certified 2P gas Reserves of 41 BCF. In
addition, 3P gas Reserves of 427 BCF and Contingent Gas Resources
of 3,043 BCF provide significant additional potential.
The Company is planning an initial scalable power project.
Following successful implementation of this first scalable project,
the Company looks forward to evaluating longer-term prospects for
the delivery of additional electricity in Botswana and to
neighbouring countries.
Forward-Looking Statements
This announcement may contain certain forward-looking
statements. Actual results may differ materially from those
projected or implied in any forward-looking statements. Such
forward-looking information involves risks and uncertainties that
could significantly affect expected results. No representation is
made that any of those statements or forecasts will come to pass or
that any forecast results will be achieved. You are cautioned not
to place any reliance on such statements or forecasts. Those
forward-looking and other statements speak only as at the date of
this announcement. Tlou Energy Limited undertakes no obligation to
update any forward-looking statements.
Consolidated statement of comprehensive income
for the half-year ended 31 December 2020
Consolidated
Note Dec 2020 Dec 2019
$ $
Interest income 399 340
Other income 50,000 -
Expenses
Employee benefits expense (264,897) (624,243)
Depreciation expense (286,999) (311,775)
Foreign exchange gain/(loss) (35,300) 42,885
Share based payment expense - (49,881)
Professional fees (98,305) (67,730)
Occupancy costs (15,427) (30,748)
Other expenses 2 (417,717) (528,535)
------------ ------------
LOSS BEFORE INCOME TAX (1,068,246) (1,569,687)
Income tax - -
------------ ------------
LOSS FOR THE PERIOD (1,068,246) (1,569,687)
------------ ------------
OTHER COMPREHENSIVE INCOME/(LOSS)
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations (935,201) 167,611
Tax effect - -
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS) (935,201) 167,611
------------ ------------
TOTAL COMPREHENSIVE INCOME/(LOSS) (2,003,447) (1,402,076)
------------ ------------
Earnings per share
Cents Cents
Basic loss per share (0.2) (0.3)
Diluted loss per share (0.2) (0.3)
Consolidated statement of financial position
as at 31 December 2020
Consolidated
Note Dec 2020 June 2020
$ $
CURRENT ASSETS
Cash and cash equivalents 3,031,957 1,576,471
Trade and other receivables 254,672 206,799
Other current assets 48,286 87,682
TOTAL CURRENT ASSETS 3,334,915 1,870,952
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NON-CURRENT ASSETS
Exploration and evaluation assets 3 47,737,940 48,163,968
Other non-current assets 691,568 708,908
Property, plant and equipment 4 1,027,186 1,273,953
TOTAL NON-CURRENT ASSETS 49,456,694 50,146,829
------------- -------------
TOTAL ASSETS 52,791,609 52,017,781
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CURRENT LIABILITIES
Trade and other payables 251,490 161,463
Provisions 202,775 236,010
TOTAL CURRENT LIABILITIES 454,265 397,473
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NON-CURRENT LIABILITIES
Provisions 114,000 114,000
TOTAL NON-CURRENT LIABILITIES 114,000 114,000
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TOTAL LIABILITIES 568,265 511,473
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NET ASSETS 52,223,344 51,506,308
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EQUITY
Contributed equity 6 102,284,970 99,753,504
Reserves (5,861,951) (5,115,767)
Accumulated losses (44,199,675) (43,131,429)
------------- -------------
TOTAL EQUITY 52,223,344 51,506,308
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Consolidated statement of changes in equity
for the half-year ended 31 December 2020
Contributed Equity Share Based Foreign Currency Accumulated Losses Total
Payments Reserve Translation
Reserve
$ $ $ $ $
Consolidated
Balance at 1 July
2019 99,753,504 686,706 (1,858,760) (30,180,828) 68,400,622
------------------- ------------------- ------------------- ------------------- ------------
Loss for the period - - - (1,569,687) (1,569,687)
Other comprehensive
income, net of tax - - 167,611 - 167,611
Total comprehensive
income - - 167,611 (1,569,687) (1,402,076)
------------------- ------------------- ------------------- ------------------- ------------
Transactions with owners in their
capacity as owners
Share based
payments - 49,881 - - 49,881
- 49,881 - - 49,881
------------------- ------------------- ------------------- ------------------- ------------
Balance at 31
December 2019 99,753,504 736,587 (1,691,149) (31,750,515) 67,048,427
------------------- ------------------- ------------------- ------------------- ------------
Balance at 1 July
2020 99,753,504 736,587 (5,852,354) (43,131,429) 51,506,308
------------------- ------------------- ------------------- ------------------- ------------
Loss for the period - - - (1,068,246) (1,068,246)
Other comprehensive
income, net of tax - - (935,201) - (935,201)
Total comprehensive
income - - (935,201) (1,068,246) (2,003,447)
------------------- ------------------- ------------------- ------------------- ------------
Transactions with owners in their capacity as owners
Share based
payments - 189,017 - - 189,017
Shares issued, net
of costs 2,531,466 - - - 2,531,466
2,531,466 189,017 - - 2,720,483
------------------- ------------------- ------------------- ------------------- ------------
Balance at 31
December 2020 102,284,970 925,604 (6,787,555) (44,199,675) 52,223,344
------------------- ------------------- ------------------- ------------------- ------------
Consolidated statement of cash flows
for the half-year ended 31 December 2020
Consolidated
Dec 2020 Dec 2019
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees (inclusive of GST and VAT) (819,217) (1,271,026)
Interest received 399 340
Other receipts 50,000 -
GST and VAT received 19,548 306,397
NET CASH USED IN OPERATING ACTIVITIES (749,270) (964,289)
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CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation assets (512,549) (1,078,191)
Payment for property, plant and equipment (38,972) (151,196)
NET CASH USED IN INVESTING ACTIVITIES (551,521) (1,229,387)
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares 3,000,754 -
Share issue costs (280,271) -
NET CASH PROVIDED BY FINANCING ACTIVITIES 2,720,483 -
---------- ------------
Net (decrease)/increase in cash held 1,419,692 (2,193,676)
Cash at the beginning of the period 1,576,471 5,204,948
Effects of exchange rate changes on cash 35,794 (53,388)
---------- ------------
CASH AND CASH EQUIVALENTS AT THE OF THE PERIOD 3,031,957 2,957,884
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Notes to the consolidated financial statements
for the half-year ended 31 December 2020
Note 1. Significant accounting policies
Introduction
Tlou Energy Limited (Tlou) is a company domiciled and
incorporated in Australia. The Financial Report for the half-year
ended 31 December 2020 consists of the Financial Statements of Tlou
Energy Limited and the entities it controlled during the period
('Consolidated Entity').
Compliance with accounting standards
The half-year financial report is a general purpose financial
report prepared in accordance with the requirements of the
Corporations Act 2001 and Australian Accounting Standard AASB 134:
Interim Financial Reporting.
The half-year financial report does not include all the notes of
the type normally included in an annual financial report and shall
be read in conjunction with the most recent annual financial report
of the group.
Basis of preparation
The financial statements have been prepared on an accruals basis
and are based on historical costs. The financial report is
presented in Australian dollars.
The accounting policies and methods of computation applied by
the Consolidated Entity in the consolidated interim financial
report are the same as those applied by the Consolidated Entity in
its consolidated financial report as at and for the year ended 30
June 2020, except as noted below.
New and revised standards
A number of new or amended standards became applicable for the
current reporting period. The impact of the adoption of these
standards did not have any impact on the group's accounting
policies and did not require retrospective adjustments.
Going Concern
The consolidated financial statements have been prepared on a
going concern basis which contemplates that the group will continue
to meet its commitments and can therefore continue normal business
activities and the realisation of assets and settlement of
liabilities in the ordinary course of business.
Because of the nature of the operations, exploration companies,
such as Tlou Energy Limited, find it necessary on a regular basis
to raise additional cash funds to fund future exploration activity
and meet other necessary corporate expenditure. At the date of this
financial report, the ability of the group to execute its currently
planned exploration and evaluation activities requires the group to
raise additional capital within the next 12 months. Accordingly,
the group is in the process of investigating various options for
the raising of additional funds which may include but is not
limited to an issue of shares or the sale of exploration assets
where increased value has been created through previous exploration
activity.
At the date of this financial report, none of the above fund
raising options have been concluded and no guarantee can be given
that a successful outcome will eventuate. The directors have
concluded that as a result of the current circumstances there
exists a material uncertainty that may cast significant doubt
regarding the group's and the Company's ability to continue as a
going concern and therefore the group and Company may be unable to
realise their assets and discharge their liabilities in the normal
course of business. Nevertheless, after taking into account the
current status of the various funding options currently being
investigated and making other enquiries regarding other sources of
funding, the directors have a reasonable expectation that the group
and the Company will have adequate resources to fund its future
operational requirements and for these reasons they continue to
adopt the going concern basis in preparing the financial
report.
The interim financial report does not include adjustments
relating to the recoverability or classification of recorded assets
amounts nor to the amounts or classification of liabilities that
might be necessary should the group not be able to continue as a
going concern.
Fair values
The fair values of Consolidated Entity's financial assets and
financial liabilities approximate their carrying values. No
financial assets or financial liabilities are readily traded on
organised markets in standardised form.
Accounting estimates and judgements
Critical estimates and judgements are continually evaluated and
are consistent with those disclosed in the previous annual
report.
Exploration & evaluation assets
In a prior period the Consolidated Entity converted a
prospecting licence into a mining licence. A mining licence allows
the commencement of commercial development. Despite this management
believe that it is not practical to commence amortisation of the
exploration and evaluation assets held in relation to the mining
licence as the Consolidated Entity has not yet entered into
production of a commercially viable resource.
Note 2. Expenses
Loss before income tax includes the following specific expenses: Dec 2020 Dec 2019
$ $
Other expenses
Stock exchange and secretarial
-- fees 135,919 140,801
-- Engineers and consultants 196,764 20,760
Note 3. Exploration and evaluation expenditure
Exploration and evaluation expenditure incurred is accumulated
in respect of each identifiable area of interest. Such expenditures
comprise net direct costs and an appropriate portion of related
overhead expenditure but do not include overheads or administration
expenditure not having a specific nexus with a particular area of
interest. These costs are only carried forward to the extent that
they are expected to be recouped through the successful development
of the area or where activities in the area have not yet reached a
stage which permits reasonable assessment of the existence of
economically recoverable reserves and active or significant
operations in relation to the area are continuing.
Accumulated costs in relation to an area no longer considered
viable are written off in full in the year the decision is made.
Regular reviews are undertaken on each area of interest to
determine the appropriateness of continuing to carry forward costs
in relation to that area of interest.
Dec 2020 June 2020
$ $
Exploration and evaluation assets 47,737,940 48,163,968
47,737,940 48,163,968
----------- -----------
Dec 2020 Dec 2019
$ $
Movements in exploration and evaluation phase
Balance at the beginning of period 48,163,968 60,896,127
Exploration and evaluation expenditure during the half-year 418,103 1,053,501
Foreign currency translation (844,131) 166,383
Balance at the end of period 47,737,940 62,116,011
----------- -----------
The recoupment of costs carried forward in relation to areas of
interest in the exploration and evaluation phase is dependent on
successful development and commercial exploitation, or
alternatively, sale of the respective areas of interest.
Note 4. Property, plant and equipment
Property, plant and equipment is stated at historical cost less
accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the
items.
Depreciation is calculated on a straight-line basis to write off
the net cost of each item of property, plant and equipment
(excluding freehold land) over their expected useful lives as
follows:
Plant and equipment 3-7 years
Leasehold property 25 Years
The residual values, useful lives and depreciation methods are
reviewed, and adjusted if appropriate, at each reporting date.
An item of property, plant and equipment is derecognised upon
disposal or when there is no future economic benefit to the
consolidated entity. Gains and losses between the carrying amount
and the disposal proceeds are taken to profit or loss.
Dec 2020 June 2020
$ $
Property, plant and equipment at cost 4,072,780 4,101,326
Accumulated depreciation (3,045,594) (2,827,373)
1,027,186 1,273,953
------------ ------------
Movements in Carrying Amounts Dec 2020 Dec 2019
Movement in the carrying amount of property, plant and equipment between $ $
the beginning and
the end of the current period:
Balance at the beginning of year 1,273,953 1,867,025
Additions 73,074 137,874
Depreciation (286,999) (311,775)
Foreign exchange movements (32,842) 7,061
Carrying amount at the end of year 1,027,186 1,700,185
------------ ------------
Note 5. Contingent liabilities
The Directors are not aware of any contingent liabilities at 31
December 2020.
Note 6. Contributed equity
Issued and paid up capital is recognised at the fair value of
the consideration received by the consolidated entity. Incremental
costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the
proceeds.
Consolidated
Dec 2020 June 2020 Dec 2020 June 2020
Shares Shares $ $
Opening balance 450,180,185 450,180,185 99,753,504 99,753,504
Issue of ordinary shares during the year* 75,018,854 - 3,000,754 -
Share issue costs - - (469,288) -
Ordinary shares -- fully paid 525,199,039 450,180,185 102,284,970 99,753,504
------------ ------------ ------------ -----------
*Ordinary shares
Ordinary shares entitle the holder to participate in dividends
and the proceeds on the winding up of the Company in proportion to
the number of, and amounts paid on, the shares held. The fully paid
ordinary shares have no par value. On a show of hands every member
present at a meeting, in person or by proxy, shall have one vote
and upon a poll, each share shall have one vote. The Company does
not have authorised capital or par value in respect of its issued
shares.
Options and performance rights
At 31 December 2020, the following options for ordinary shares
in Tlou Energy Limited and performance rights were on issue.
Options
Issued to: Exercise Price Expiry Date 30/12/2020 31/12/2019
Shareholders $0.08 20 July 2022 37,509,400 -
Service providers $0.08 20 July 2022 20,000,000 -
57,509,400 -
----------- -----------
Performance shares
The following table shows the number, movements and exercise
price of performance rights for the period ended 31 December
2020.
Issue Date Hurdle Conditions 1/07/2020 Issued Exercised Expired 31/12/2020
Price
31 January 2017 $0.28 See (i) 2,275,000 - - - 2,275,000
19 October 2018 $0.165 See (ii) 2,475,000 - - - 2,475,000
19 October 2018 $0.22 See (iii) 2,475,000 - - - 2,475,000
7,225,000 - - - 7,225,000
----------- -------------------- --------------------- ------------------------ --------------------
The outstanding performance shares have the following key terms
and conditions:
Number Performance condition
(i) 2,275,000 The shares will only vest once the share price of the Company's securities listed on the ASX
reaches $0.28 and closes at that price or above for a period of 10 consecutive trading days.
---------- -----------------------------------------------------------------------------------------------
(ii) 2,475,000 The shares will only vest once the share price of the Company's securities listed on the ASX
reaches $0.165 and closes at that price or above for a period of 10 consecutive trading days.
---------- -----------------------------------------------------------------------------------------------
(iii) 2,475,000 The shares will only vest once the share price of the Company's securities listed on the ASX
reaches $0.22 and closes at that price or above for a period of 10 consecutive trading days.
---------- -----------------------------------------------------------------------------------------------
The Performance Shares will lapse if:
* None of the pricing conditions are met; or
* the participant does not meet the service conditions.
Note 7. Share-based payments
Options may be granted on terms determined by the directors or
otherwise approved by the company at a general meeting. The options
are granted for no consideration. Options and entitlements to the
options are vested on a time basis and/or for services provided or
on specific performance-based criteria. Options granted as
described above carry no dividend or voting rights. When
exercisable, each option is convertible to one ordinary share.
During the half-year 20 million options were granted for the
performance of services. The amount recognised for the period under
the share-based payment reserve in relation to share based payments
amounts to $189,017. The fair value of options at grant date is
determined using generally accepted valuation techniques that take
into account exercise price, the term of the option, the impact of
dilution, the share price at grant date, the expected price
volatility of the underlying share, the expected dividend yield and
the risk-free rate for the term of the option/performance right and
an appropriate probability weighting to factor the likelihood of
the satisfaction of non-vesting conditions.
Inputs used to calculate the value of options granted during the
year are as follows:
Grant date 20/07/2020
Dividend yield -
(%)
Expected volatility
(%) 81
Risk-free interest
rate (%) 0.26
Expected life of
options (years) 2
Exercise price
($) $0.08
Model used Black Scholes
Note 8. Segment information
Identification of reportable segments
Operating segments are identified on the basis of internal
reports that are regularly reviewed by the executive team in order
to allocate resources to the segment and assess its performance.
The Company currently operates in one segment, being the
exploration, evaluation and development of coalbed methane
resources and power generation in southern Africa.
Segment revenue
As at 31 December 2020 no revenue has been derived from its
operations (2019: $nil).
Segment assets
Segment non-current assets are allocated to countries based on
where the assets are located as outlined below.
Dec 2020 June 2020
$ $
Botswana 49,453,611 50,142,417
Australia 3,083 4,412
49,456,694 50,146,829
----------- -----------
Note 9. Events occurring after balance date
Other than the matters discussed in this report, there has not
arisen in the interval between the end of the half-year and the
date of this report any item, transaction or event of a material
and unusual nature likely, in the opinion of the directors, to
affect significantly the operations of the group, the results of
those operations or the state of affairs of the group in subsequent
financial periods.
Directors' declaration
In the directors' opinion:
(a) the attached financial statements and notes are in
accordance with the Corporations Act 2001 including:
(i) the attached financial statements and notes thereto comply
with the Corporations Act 2001, Australian Accounting Standard AASB
134 'Interim Financial Reporting', the Corporations Regulations
2001 and other mandatory professional reporting requirements;
(ii) the attached financial statements and notes thereto give a
true and fair view of the consolidated entity's financial position
as at 31 December 2020 and of its performance for the financial
half-year ended on that date; and
(iii) there are reasonable grounds to believe that the Company
will be able to pay its debts as and when they become due and
payable.
Signed in accordance with a resolution of directors made
pursuant to section 303(5)(a) of the Corporations Act 2001.
On behalf of the directors
Anthony Gilby
Managing Director
Dated at Brisbane this 26(th) day of February 2021
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