Rukwa Operational Update
Edenville Energy Plc (AIM: EDL) is pleased to provide an update on its Rukwa Coal Project (“Rukwa”) in Tanzania.
Rukwa Operations & Business Development
As previously announced the Company has agreed terms to supply 2,000 tonnes of washed coal per month, at a now agreed pre-transport price of US$98 per tonne at the mine gate. The Company has committed to supply 2,000 tonnes per month from June 2023. Prior to this date contract supply volumes under this agreement are subject to variation based on production figures at Rukwa given the ongoing rainy season. It is expected the net price achieved by the Company will be approximately US$55 per tonne. Discussions regarding the previously announced sale of 1,500 tonnes per month of fines remain ongoing.
The Company has been focused on stockpiling run of mine coal to mitigate, as far as practicable, impact from the rainy season, which is underway. The subsequent production of washed coal is expected to be reduced for as long as the rains continue, however this is not anticipated to reduce previously expected overall annual output.
The Company is also investigating the costings and lead time for an additional wash plant at Rukwa, in particular in relation to ongoing contractual discussions that are being held with potential customers that could lead to additional demand of between 8-10,000 tonnes per month of washed coal. As previously notified, it is likely that to meet demand of over 10,000 tonnes per month of washed coal an additional wash plant will be required at Rukwa and the Company are exploring non-equity avenues of finance to fund a new wash plant.
Additionally, the Company continues to explore further opportunities in the Tanzanian coal market as they are presented.
Edenville International (Tanzania) Limited (“EITL”)
The Tanzanian Business Registrations and Licensing Agency has now approved changes to the EITL board, to formalise the removal of a previous local director, enabling EITL to fully recommence practical administrative matters that had been severely frustrated in the interim period. The new directors of EITL are currently undertaking a review of past operations at EITL and working with the local authorities to resolve outstanding historic issues, including seeking access to historic bank records relating to an EITL account which is no longer in use. The directors of Edenville do not believe any remaining historic issues relating to EITL will have an impact on the Rukwa operations going forward.
Update on Dispute with Upendo Group Ltd
Edenville is advised that the courts in Tanzania will address at a hearing in February 2023 the Company’s claim for the reversal of the transfer of Upendo Group Ltd.’s 10% economic interest in the local joint venture, which holds the licences governing the Rukwa project, to a 10% direct holding on the principal production licence. A further update will be provided in due course. Based on legal advice received, the Company confirms that the claim is being robustly defended.
As previously reported, the Company reached agreement with Envirom Group AS (“Envirom”) for certain costs, amounting to £180,000, to be recouped following an earlier aborted acquisition process. While Envirom continues to acknowledge the debt and reaffirm it will be paid upon the completion of their own financing initiatives, most recently advising of their expectation to settle some or all of the debt in the coming weeks, the Company has yet to receive the proceeds of such agreement and the Company is currently taking advice regarding expediting recovery of the debt.
The Company will provide a further update to the market in due course.
For further information please contact:
Edenville Energy Plc
Nick Von Schirnding – Chairman | Noel Lyons – CEO
Via IFC Advisory
Strand Hanson Limited (Financial and Nominated Adviser)
James Harris | Rory Murphy
+44 (0) 20 7409 3494
Tavira Securities Limited (Broker)
Oliver Stansfield | Jonathan Evans
+44 (0) 20 7100 5100
IFC Advisory Limited (Financial PR and IR)
Tim Metcalfe | Florence Chandler
+44 (0) 20 3934 6630