Edenville Energy Plc (AIM: EDL), the AIM quoted company developing the Rukwa coal project in southwest Tanzania (“Rukwa” or the “Project’), provides the following update in light of the COVID-19 pandemic (the “Pandemic”).

Background

Edenville’s primary operations are located in Tanzania, with the Project located approximately 850km west of Dar es Salaam. The Company has one member of staff in Dar Es Salaam, who works from home, and just over 40 employees on the Project site located in the Western Highlands, near the town of Sumbawanga. As of 5 April 2020 there has been no cases of COVID-19 at the mine site or in the surrounding region, whilst 22 cases of COVID-19 have been reported in Tanzania, with one death. However, as with many other countries across the globe, Tanzania has introduced steps in an attempt to curb the further spread of the virus; as part of this there has been the temporary closure of certain non-essential businesses and the introduction of social distancing protocols.

Edenville places the safety and wellbeing of its employees and contractors as the highest priority. Accordingly, in response to the Pandemic, a business continuity programme has been introduced to protect staff while ensuring the continued safe operation of the Company. This has resulted in all non-essential travel being cancelled since early March 2020, with all non-operational staff working from home.

Rukwa Operations

As announced on 4 March 2020, operations at Rukwa restarted in March 2020, although, as expected, the recommencement of mining has been hampered by the continued rainy season. The Company was able to bring the plant back online after further upgrades and continued to process stockpiles of coal for sale to a long-term customer in Arusha, Tanzania, who purchased and received in excess of 500 tonnes of washed coal during March 2020.

However, given the Tanzanian government’s recent advice and that of its customers, Edenville has elected to stand down Rukwa employees and suspend production with immediate effect until the situation is resolved. With the rainy season expected to draw to a close later this month, the Company is optimistic that with an improvement in the situation Edenville will be able to commence mining in the Northern Area at short notice, which as previously reported has shown itself to be of a higher quality than areas previously mined at Rukwa. A security team will remain present at site during the shutdown.

Funding & Strategic Partner Update

On 23 January 2020 Edenville announced the completion of an equity financing to raise £700,000 (before expenses) at 0.04p per share, which funded the restart of operations at Rukwa, as well as the payment of certain local and international creditors.

In order to effectively manage its working capital position during this period of uncertainty, the Company has engaged with Lind Partners LLC (“Lind”) regarding its outstanding funding agreement (the “Funding Agreement”), that was first announced on 6 November 2018 and further detailed in the Company’s announcements of 29 April 2019 and 23 January 2020. Lind have agreed to a three-month deferral on loan repayments pursuant to the Funding Agreement as a result of the Pandemic, starting with the April 2020 payment due at the end of this month. All other historic loan repayments are currently up to date and a balance of about US$580,000 now remains outstanding under the Funding Agreement.

In addition, Lind have provided their consent to the Company entering into an unsecured loan from a third party of up to £300,000 such as the proposed loan offered to the Company as announced on 23 January 2020, although the Company has not entered into any such agreement as at the date of this announcement.

In exchange for the 3-month repayment deferral and consent to a potential third party loan, Edenville has agreed to grant a warrants over 270,000,000 ordinary shares of 0.02 pence each in the Company to Lind with an exercise price of 0.03p per share, being the closing bid price on 3 April 2020. The warrants will have a life to expiry of 5 years from today’s date and if exercised would provide the Company with proceeds of £81,000.

The Company’s cash position as at 31 March 2020 is approximately £60,000 (including an upcoming VAT return). In addition, circa US$25,000 is owed to Edenville International Tanzania Ltd from customers and an expired bank guarantee in Tanzania.

Potential Strategic Partner

As announced on 11 December 2019 and in the update provided on 27 February 2020, the Company remains in discussions with a potential strategic partner for the Project. The scope of these discussions still includes a potential asset-level loan, a potential coal mining agreement and a potential coal marketing agreement. These discussions are progressing, with a number of key commercial terms now agreed in principle. Whilst the pace has been slower than originally envisaged given the effects of the Pandemic and the subsequent restrictions it has imposed on travel, Edenville’s Directors remain optimistic that a deal can be concluded in Q2 2020.

Board Update

The Company announces that due to the Pandemic the Board has temporarily suspended its search for a new Non-Executive Director. As a result of this Rufus Short has agreed to stay on the Edenville board in his current role as a Non-Executive Director until a new appointment is made.

Alistair Muir, CEO of Edenville, commented:

“As with much of the world, our operations have naturally been impacted by the rapid spread of COVID-19. Our principal focus must always be on the safety of our employees, as well as the moral obligation to do what we can to reduce the spread of the virus.

“Whilst to date there have been few cases of COVID-19 in Tanzania, we fully support the government’s initiatives which will hopefully ensure the country remains as sheltered as possible from the Pandemic.

“We believe the steps taken now should enable us to return to mining as soon as practicable. The order book for our coal remains healthy and we have seen consistent demand given our primary market is currently regional industrial players, meaning Rukwa’s location gives it cost advantages over certain other operations.

“I look forward to updating the market as and when we return to mining, along with any developments with respect to our potential strategic investor.”

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)

David Hignell

Charlie Bouverat

Abigail Wayne

+44 (0) 20 3470 0470

Brandon Hill Capital Ltd

(Broker)

Oliver Stansfield, Jonathan Evans

+44 20 7936 5200

IFC Advisory Limited

(Financial PR and IR)

Tim Metcalfe

Florence Chandler

+44 (0) 20 3934 6630

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