Edenville Energy a significant positive change in prospects

Edenville Energy

Edenville Energy plc (LON:EDL), the company developing a coal project in southwest Tanzania, has announced the Company’s unaudited interim results for the six months ended 30 June 2021.

Highlights

  • The Period has seen a significant positive change in prospects for the Company.
  • On 15 January 2021, the Company announced that it had raised £900,000 (before expenses) by way of a placing of 3,600,000 new ordinary shares at a placing price of 25p per ordinary share with new and existing shareholders.
  • On 15 January 2021, the Company announced that it had reached agreement with Lind Partners LLC (“Lind”) regarding its outstanding funding agreement and, on 22 June 2021, the Company announced that it had repaid in cash the full outstanding amount owed to Lind.
  • On 5 May 2021, the Company raised £2,475,000 (before expenses) by way of a placing of 9,900,000 new ordinary shares at a placing price of 25p per ordinary share. Investors also received one warrant for every placing share. If these warrants are exercised in full the Company will receive a further £2,475,000 for the development of the Company’s business.
  • As part of the fund raising in May 2021, a new strategic investor, Anthony (Tony) Buckingham, took an 18.5% stake in the Company through an investment of £1 million, with the majority of the balance of the funds raised coming from the Company’s substantial shareholders. Mr Buckingham is well known in the natural resources market, particularly in Africa, having been CEO and major shareholder of Heritage Oil Limited from 2006 until its acquisition by a wholly-owned subsidiary of Qatari investment fund, Al Mirqab Capital SPC, in 2014 for a consideration of US$1.6 billion. His wealth of experience and broad network of relationships is expected to prove highly beneficial as Edenville looks to add additional assets into the Company.
  • The period saw a significant increase in coal prices globally, with this trend continuing post period also. This has led to renewed interest in the supply of coal from the Company’s flagship Rukwa project.
  • With an improved cash position, the Company is targeting additional asset acquisitions, leveraging the natural resources and capital markets expertise of its Board and significant shareholders.
  • Post period end Franco Caselli was appointed as a Non-executive Director of the Company to assist with its future development.

CEO’s report

The reporting period has been characterised by a significant positive change in prospects for the Company, both with regard to its existing Rukwa coal project in Tanzania and more widely as with an improved cash position, the Company targets additional asset acquisitions, leveraging the natural resources and capital markets expertise of its Board and significant shareholders. 

As the Company has previously reported, following the induction of the new President in Tanzania there has been considerable positive sentiment in the country, which appears to be translating into business confidence and action. In addition, the increase in the steaming coal price, which has more than doubled over the past 12 months, to its current level of in excess of US$155 per tonne (September 2021) price for South African Richards Bay FOB), is bringing Rukwa production into focus, particularly from potential customers in other East African states.

Rukwa Operations

–       The early part of the reporting period was characterised by ongoing problems related to the Covid-19 pandemic.

–       Post period end in August 2021 the Company received an order of up to a possible 3,500 tonnes per month of washed coal and it is expected that this will result in an average monthly delivery of at least 2,000 tonnes per month. It has an additional, ongoing order of 600 tonnes per month of washed coal to one of its anchor tenants.

–       Whilst efforts have been  focused on short term contract opportunities, there is strong interest in coal purchases coming from other parts of East Africa and the Congo and the Company is working to secure a number of significant long term contracts that have an immediate demand for coal supply.  In addition, discussions are being held with the Tanzanian Government on power station supply options.

Funding

–       On 15 January 2021, the Company announced that it had raised £900,000 (before expenses) by way of a placing of 3,600,000 new ordinary shares at a placing price of 25p per ordinary share with new and existing shareholders

–       On 5 May 2021, the Company raised £2,475,000 (before expenses) by way of a placing of 9,900,000 new ordinary shares at a placing price of 25p per ordinary share.  Investors also received one warrant for every placing share.  If these warrants are exercised in full the Company will receive a further £2,475,000 for the development of the Company’s business.

–       As part of the fund raising in May 2021, a new strategic investor, Anthony (Tony) Buckingham, took an 18.5% stake in the Company through an investment of £1 million, with the majority of the balance of the funds raised coming from the Company’s substantial shareholders. Mr Buckingham is well known in the natural resources market, particularly in Africa, having been CEO and major shareholder of Heritage Oil Limited from 2006 until its acquisition by a wholly-owned subsidiary of Qatari investment fund, Al Mirqab Capital SPC, in 2014 for a consideration of US$1.6 billion. His wealth of experience and broad network of relationships is expected to prove highly beneficial as Edenville looks to add additional assets into the Company.

Lind Partners

–       On 15 January 2021, the Company announced that it had reached agreement with Lind Partners LLC (“Lind”) regarding its outstanding funding agreement and on 22 June 2021, the Company announced that it had repaid in cash the full outstanding amount owed to Lind.

To the Future

–       With an improved cash position, the Company is targeting additional asset acquisitions, leveraging the natural resources and capital markets expertise of its Board, and significant shareholders. 

Board Changes

–       Post period end Franco Caselli was appointed as a Non-executive Director of the Company to assist with its future development.

–       In June 2021 Alistair Muir returned to the position of CEO and Jeff Malaihollo soley to the position of Non-executive Chairman.

Financial Results

For the six month period ended 30 June 2021 Edenville Energy had revenue of £27,752 (H1 2020: £16,003). 

The Group made a loss after taxation of £587,354 (H1 2020 loss of £638,198).  The net assets at 30 June 2021 amounted to £7,842,563 (30 June 2020 £6,549,050).

The total comprehensive loss for the period was £513,497 (H1 2020 loss of £172,744) which included a gain of £73,857 arising from the translation of the Tanzanian subsidiary accounts from US Dollars to Sterling.

Alistair Muir

Chief Executive Officer

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