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COAL BASED ENERGY
IN WESTERN TANZANIA

Open Offer and Notice of General Meeting

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE EU MARKET ABUSE REGULATION (596/2014). UPON THE PUBLICATION OF THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN ARE RESTRICTED AND ARE NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

Edenville Energy Plc (AIM: EDL) (‘EDL’ or ‘the Company’), the AIM quoted company developing a coal project in southwest Tanzania, today announces a non-underwritten Open Offer to Eligible Shareholders through the issue of up to 515,915,456 new Ordinary Shares at a price of 0.12 pence per Ordinary Share on the basis of 1 Open Offer Share for every 3 Existing Ordinary Shares held on the Record Date (the “Open Offer”).

In addition, the Open Offer presents Eligible Shareholders with an opportunity, provided that they take up their Open Offer Entitlements in full, to apply for additional Open Offer Shares through the Excess Application Facility.

A Circular setting out full details of the Open Offer, including the terms and conditions and details on how to accept the Open Offer, (the “Circular”) and an accompanying Application Form (for Qualifying Non-CREST Shareholders) will today be posted to Shareholders.

The Circular contains a notice of General Meeting (“GM”) of the Company to be held at the offices of Womble Bond Dickinson (UK) LLP, 4 More London Riverside, London, SE1 2AU at 11.00 am on 15 February 2019. The purpose of the GM is to grant the Board the authority to allot Ordinary Shares in order to proceed with the Open Offer and to issue and allot Ordinary Shares pursuant to the Company’s Funding Agreement with Lind that was announced on 6 November 2018.

A copy of the Circular will shortly be available from the Company’s website at www.edenville-energy.com.

Capitalised terms used but not otherwise defined in this announcement bear the meanings ascribed to them in the Circular.

Dr Jeffrey Malaihollo, Non-Executive Chairman, makes the following statement:

“I believe the Company has made great progress in moving from an exploration company to one that is producing and selling coal, whilst at the same time continuing to progress the longer-term goal of building a power plant. I and my fellow Directors believe the current share price and market capitalisation of the Company does not reflect this. We therefore believe it is important to seek authorities and support from our Shareholders to allow the Company to expand its coal mining operations in Tanzania and potentially seek other cash-flow generating, coal focused, opportunities in Africa.

“We therefore encourage our Shareholders to read the Circular, support the Open Offer and vote in favour of the Resolutions.”

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Record Date for the Open OfferClose of business on 29 January 2019
Announcement of the Open Offer7.00 a.m. on 30 January 2019
Ex-entitlement date for the Open Offer8.00 a.m. on 30 January 2019
Publication and posting of the Circular and the Application Form30 January 2019
Open Offer Entitlements and Excess Open Offer
Entitlements credited to stock accounts of Eligible CREST
Shareholders
8.00 a.m. on 31 January 2019
Recommended latest time & date for requesting withdrawal of Open Offer Entitlements and Excess
Open Offer Entitlements from CREST
4.30 p.m. on 8 February 2019
Latest time for depositing Open Offer
Entitlements and/or Excess Open Offer
Entitlements into CREST
3.00 p.m. on 11 February 2019
Latest time and date for splitting Application Forms
(to satisfy bona fide market claims only)
3.00 p.m. on 12 February 2019
Latest time and date for receipt of electronic votes to be valid at the General Meeting11.00 a.m. on 13 February 2019
Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST instruction (as appropriate)11.00 a.m. 14 February 2019
General Meeting11.00 a.m. on 15 February 2019
Announcement of the result of the General Meeting and Open Offer15 February 2019
Admission of the Open Offer Shares, Director Subscription Shares and Collateral Shares8.00 a.m. on 20 February 2019
New Ordinary Shares credited to CREST stock accounts8.00 a.m. on 20 February 2019
Expected date by which certificates in respect of New Ordinary Shares are to be despatched to certificated Shareholders (as applicable)Week commencing 25 February 2019

INTRODUCTION

Completion of the Open Offer and the other proposals are subject to shareholders approving certain Resolutions being put to the General Meeting. The Directors are seeking authority from Shareholders to allot:

(i) Open Offer Shares for cash and Ordinary Shares on a non-pre-emptive basis;

(ii) Equity Securities to Lind pursuant to the terms of the Funding Agreement the Company signed with Lind on 6 November 2018; and

(iii) Ordinary Shares for non-cash consideration in connection with an acquisition or acquisitions that the Company may wish to effect in the future.

Current Operations

As previously announced, 2018 was an important year in Edenville’s development, evolving from an exploration business to a small-scale coal producer, fulfilling several recently secured coal contracts at the Company’s Rukwa Coal Project site in southwest Tanzania (“Rukwa” or the “Project”) and other miscellaneous coal orders.

As stated in the announcements made on 6 November 2018, 17 December 2018, 20 December 2018 and 14 January 2019 the net proceeds of the US$750,000 Initial Advance from Lind are being used by the Company for a number of purposes to enhance and expand coal production activities at Rukwa, together with providing additional working capital to enable the fulfilment of coal supply contracts.

This has included the purchase of a second loader to load the pre-screen plant and coal delivery trucks; the purchase of a second excavator as the Company seeks to extend current mining operations to a new mining area to the north of the current excavations; the provision of further on-site trucks; the installation of mobile in-pit lighting to allow 24 hour per day operation; and the purchase of an additional spares package.

As announced on 20 December 2018, the Lamella clarifier water treatment plant that has been installed to enhance the quality of the water and reduce the amount used in the Company’s coal processing, along with ensuring that the Project site is following recognised international environmental practices, is now fully operational. Additionally, the pre-screening plant and conveyors, designed to remove the majority of coal fines before they reach the washing circuit, are now fully integrated into the Company’s washed coal production process.

At present the Company has long-term contracts in place to supply 8,000 tonnes of washed coal per month and several additional regular monthly orders (totalling around 1,000 tonnes for a mix of washed and unwashed material). The site improvements and expansion that have and are being undertaken are essential to fulfil this production and to provide appropriate infrastructure to deliver anticipated further orders that are currently being discussed with various groups, although at present no assurances can be given that these discussions will lead to firm orders.

Between 1 January 2018 and 31 December 2018 Edenville processed approximately 75,000 tonnes of Run of Mine (“ROM”) coal, producing approximately 15,000 tonnes of washed coal to customer’s specifications and approximately 32,000 tonnes of fine coal. Approximately 14,000 tonnes of coal have been sold and shipped, the vast 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 and part processed coal, in addition to the coal that is being mined on a daily basis.

To date there have been very limited sales of Fine Coal which is being stockpiled for future use, either by the planned power plant or by commercial customers. The Company is currently in discussions with a number of potential customers for the Fine Coal and although no assurances can be given at this stage, the Directors believe that the sale of fine coal could start to provide a revenue stream for the Company during H1 2019.

Rukwa Coal to Power Project

In addition, the Company is also working with Sinohydro Corporation of China (“Sinohydro”), the Chinese EPC (Engineering, Procurement and Construction) contractor to advance the Company’s Rukwa Coal to Power Project. On 7 December 2018 the Company re-submitted the documentation for the Request for Qualification (“RFQ”) for coal fired power generation projects in Tanzania to the Tanzania Electricity Supply Company (“Tanesco”). This re-submission was in response to Tanesco cancelling the original submission for all applicants previously submitted on 19 October 2018. The re-submission and opening of the documents took place in front of other bidders with Edenville’s documents officially accepted as complete and complying with Tanesco’s requirements.

This formal process is the initial stage in the selection of projects to provide power to the Tanzanian grid. A review by Tanesco is taking place to assess applications in order to select those to move to the next stage of the process. There is no defined time limit for the review and at present no assurances can be provided that this re-submission will lead to a successful outcome for Edenville. However, the Company and its partners are in regular dialogue with Tanesco and the Directors believe that the Company’s Rukwa project site is ideally situated to provide a power plant to feed into the planned Tanzanian electricity infrastructure.

Potential Acquisitions

The Company is currently focused on a single asset in Tanzania. The Directors believe that shareholder value could be enhanced through the Company undertaking an appropriate acquisition or acquisitions to provide both additional assets for the Company and extra management resource. In considering any potential acquisitions the Directors’ primary focus is on cash generative acquisition opportunities in the coal sector outside of Tanzania.

The Company is therefore seeking shareholder approval to issue Ordinary Shares for non-cash consideration in order to take advantage of any appropriate acquisition opportunities should they arise.

OPEN OFFER AND USE OF PROCEEDS

The Company is seeking to raise up to £619,099 (before expenses) by way of an Open Offer to Eligible Shareholders of up to an aggregate of 515,915,456 Open Offer Shares. The proposed Open Offer Shares will be issued at 0.12 pence per share.

The Issue Price represents the closing price of 0.12 pence per Existing Ordinary Share, on 29 January 2019.

Principal terms of the Open Offer

The Company sees that its current share price and market capitalisation does not reflect the value of the Company as a coal producer and therefore is keen for existing Shareholders to have the opportunity to participate in its fundraising activities.

On and subject to the terms and conditions of the Open Offer, the Company invites Eligible Shareholders to apply for the Offer Shares at the Issue Price.

The Open Offer provides an opportunity for all Eligible Shareholders to participate in the fundraising by both subscribing for their respective Open Offer Entitlements and by subscribing for Excess Shares under the Excess Application Facility, subject to availability. If the Open Offer is over-subscribed, applications will be scaled back on a pro-rata basis according to shareholdings in the Company as at the Record Date.

Pursuant to the Open Offer, Eligible Shareholders will be given the opportunity to subscribe for one Open Offer Share for every three Existing Ordinary Shares held on the Record Date.

The Open Offer will raise gross proceeds of up to £619,099, assuming full take-up. If the Open Offer is not fully subscribed the Company may seek to raise additional funds via a placing of Ordinary Shares following the General Meeting, assuming that Resolutions 1 and 4 have been approved. The price at which any Ordinary Shares are placed with new or existing investors in the future may differ from the Issue Price.

Open Offer Entitlement

Eligible Shareholders are invited, on and subject to the terms and conditions of the Open Offer, to apply for any number of Open Offer Shares (subject to the limit on the number of Excess Shares that can be applied for using the Excess Application Facility) at the Issue Price. Eligible Shareholders have an Open Offer Entitlement of:

One Open Offer Share for every three Existing Ordinary Shares registered in the name of the relevant Eligible Shareholder on the Record Date.

Open Offer Entitlements under the Open Offer will be rounded down to the nearest whole number and any fractional entitlements to Open Offer Shares will be disregarded in calculating Open Offer Entitlements and will be aggregated and made available to Eligible Shareholders under the Excess Application Facility.

The aggregate number of Open Offer Shares available for subscription pursuant to the Open Offer will not exceed 515,915,456 New Ordinary Shares.

Allocations under the Open Offer

In the event that valid acceptances are not received in respect of all of the Open Offer Shares under the Open Offer, unallocated Open Offer Shares will be allotted to Eligible Shareholders to meet any valid applications under the Excess Application Facility.

Excess Application Facility

Subject to availability and assuming that Eligible Shareholders have accepted their Open Offer Entitlement in full, the Excess Application Facility enables Eligible Shareholders to apply for any whole number of Excess Shares in addition to their Open Offer Entitlement up to an amount equal to the total number of Open Offer Shares available under the Open Offer less an amount equal to an Eligible Shareholder’s Open Offer Entitlement.

Excess Applications may be allocated in such manner as the Directors determine, in their absolute discretion, and no assurance can be given that applications by Eligible Shareholders under the Excess Application Facility will be met in full or in part or at all.

Directors’ Participations in the Open Offer and Director Subscription Shares

Rufus Short, the Company’s CEO, intends to subscribe for his full Open Offer Entitlement of 1,111,142 Open Offer Shares. In addition, Rufus Short has applied for 7,222,192 Open Offer Shares under the Excess Application Facility.

In addition, Jeffrey Malaihollo the Company’s Chairman, who is not currently a Shareholder and therefore is ineligible to apply for Open Offer Shares, has agreed to subscribe for 12,500,000 Ordinary Shares at the Issue Price (the “Director Subscription Shares”). Rufus Short’s participation in the Open Offer and the issue of the Director Subscription Shares are conditional upon Resolution 1 and Resolution 4 being passed at the General Meeting. Following Rufus Short’s participation in the Open Offer and the issue of the Director Subscription Shares to Jeffrey Malaihollo, the percentage holdings of the Directors in the enlarged issued share capital of the Company will be as follows:

Director: Rufus Short

Number of Ordinary Shares Currently Held: 3,333,428

Number of Open Offer Shares or Director Subscription shares subscribed for: 8,333,333

Holding following Admission: 11,666,761

Percentage Holding of Enlarged Share Capital*: 0.55

Director: Jeffrey Malaihollo

Number of Ordinary Shares Currently Held: 0

Number of Open Offer Shares or Director Subscription shares subscribed for: 12,500,000

Holding following Admission: 12,500,000

Percentage Holding of Enlarged Share Capital*: 0.59

*Please note this percentage assumes that all of the 515,915,456 New Ordinary Shares have been issued.

Arun Srivastava, the Company’s Non-Executive Director, does not currently hold any Ordinary Shares.

Application will be made for the Director Subscription Shares, which will rank pari passu with the Company’s existing Ordinary Shares, to be admitted to trading on AIM. Subject to Resolutions 1, 2, 4 and 5 being passed at the General Meeting, it is anticipated that Admission will become effective at 8.00 a.m. on 20 February 2019.

USE OF PROCEEDS OF THE OPEN OFFER

The Directors intend that the net proceeds of the Open Offer will be used primarily for the following purposes:

· to increase the available ROM coal for processing through the opening up of the Company’s northern pit area;

· to support the advancement of the Rukwa Coal to Power Project that the Company is currently working on; and

· to provide the Company with additional working capital.

CONVERTIBLE FUNDING AGREEMENT WITH LIND

On 6 November 2018, the Company announced that it had entered into a Funding Agreement with an entity managed by The Lind Partners, LLC under which up to US$2,750,000 has been conditionally made available to the Company for working capital and expansion purposes.

Under the terms of the Funding Agreement the Company received an initial advance of US$750,000 (the “Initial Advance”) in November 2018 and may receive a further advance of up to US$2,000,000 to be drawn with mutual agreement between the Company and Lind (the “Further Advance”) prior to 6 January 2021, subject to the Company having repaid to Lind an amount equal to 75 per cent. of the Initial Advance.

Both the Initial Advance and the Further Advance (if any) may be converted by Lind into Ordinary Shares at a conversion price of 0.29p per Ordinary Share (subject to Resolutions 2 and 5 being passed).

The face value of the Initial Advance was US$900,000. Commencing on 16 February 2019 the Company must repay the face value in monthly instalments equal to 1/20 of the face value (US$45,000) (“Repayments”). At the Company’s option every month the Repayments may be made either in cash (at a 3 per cent. premium to face value), or in Ordinary Shares (priced at 90 per cent. of the average five day VWAP chosen by Lind during the 20 consecutive Business Days before issuance (“Repayment Price”)); or a combination of both.

Correspondingly the “Further Advance” of up to US$2,000,000 will have a face value of 120 per cent. of the amount advanced (i.e. up to US$2,400,000) and will be repayable under the same terms as the “Initial Advance” in monthly instalments equal to 1/20 of the face value or in Ordinary Shares, or a combination of both.

At its sole discretion the Company has the right to buy back the entire outstanding face value of the convertible securities at any time at a 5 per cent. premium to face value. Should the Company exercise this right, Lind will have the option to convert, subject to the Company having the necessary allotment authorities, up to 25 per cent. of the face value of the convertible securities into Ordinary Shares at the lesser of (i) the Repayment Price and (ii) 0.29 pence per Share (“Conversion Price”).

The Company has paid to Lind a commitment fee of US$37,500 on the Initial Advance and will pay a commitment of 5 per cent. of the value of any Further Advance.

The Company has also agreed to grant Lind options to acquire 99,568,966 Ordinary Shares, and additional options to acquire such number of Ordinary Shares equal to the sterling equivalent of half of the Further Advance, divided by the WVAP during the 20 consecutive Business Days prior the Further Advance, in each case with an exercise price of 0.29p (“Lind Options”).

The Company has also agreed to issue 36,000,000 Ordinary Shares to Lind as collateral for advancing funds under the Funding Agreement (the “Collateral Shares”) within 10 Business Days following the approval by Shareholders of Resolutions 2 and 5. Lind will subscribe for the Collateral Shares at their nominal value. Provided all funds advanced have been repaid, Lind is required to transfer the Collateral Shares back to the Company after expiry of the term of the Funding Agreement. Lind may however at any time elect to own the Collateral Shares outright by paying the difference between the nominal value and the average five day VWAP chosen by Lind during the 20 consecutive Business Days before making any such election.

The issue of any Ordinary Shares, Collateral Shares and the grant of the Lind Options under the terms of the Funding Agreement is in each case conditional on Resolutions 2 and 5 being passed.

Under the terms of the Funding Agreement none of the convertible securities may be converted into Ordinary Shares and no options over Ordinary Shares may be granted unless the Company has obtained the requisite allotment authorities under section 551 of the Act and authority to dis-apply pre-emption rights under section 561 of the Act. The Company will therefore seek the requisite shareholder approvals at the General Meeting.

If the Company however does not obtain the requisite authorities to allot Equity Securities to Lind prior to 16 February 2019 then the Company is required under the terms of the Funding Agreement to pay Lind the following additional amounts in cash: (i) US$45,000 on 18 February 2019; (ii) US$46,300 one month following repayment of the Initial Advance; and (iii) US$46,300 two months following repayment of the Initial Advance.

As such, the Directors believe it is in the best interests of the Company’s Shareholders to approve the Resolutions at the General Meeting. If the Resolutions are not approved, Edenville will be responsible for securing additional finance and such finance may not be readily available or may only be available on terms that are unfavourable to the Company.

The Directors are of the opinion that if the Resolutions are not passed the Company may not be in a position to meet its future operational commitments in Tanzania and its corporate obligations. Accordingly, the Directors strongly recommend the Shareholders to vote in favour of the Resolutions at the General Meeting.

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

+44 (0) 20 3470 0470

IFC Advisory Limited

(Financial PR and IR)

Tim Metcalfe

Graham Herring

Heather Armstrong

+44 (0) 20 3934 6630

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