# Edenville Energy further cements relationship with ILTL with US$1 million loan agreement

- Link: https://www.directorstalkinterviews.com/edenville-energy-further-cements-relationship-with-iltl-with-us1-million-loan-agreement/412844913
- Published: 2020-07-22T07:35:25+01:00
- Author: Giles Arbor

**Edenville Energy Plc** (LON:EDL), the AIM quoted company operating the Rukwa Coal
Project in southwest Tanzania, has announced that the Company’s subsidiary Edenville
International (Tanzania) Limited has entered into a US$1 million Loan Agreement 
with its strategic partner Infrastructure and Logistics Tanzania Limited (ILTL).

The signing of the Loan Agreement follows on from the recently announced Coal Mining
Agreement with ILTL, which provides for a fixed rate mining and processing contract
at Rukwa. The CMA has a contract term of four years and will automatically be renewed
for further period of four years unless terminated by either party (for further 
details please see the Company’s announcement of 8 June 2020).

The Company’s Directors expect a Sales and Marketing Agreement to be signed shortly,
representing the last of the three proposed agreements with ILTL, as previously 
announced. The Sales and Marketing Agreement, as encapsulated within the CMA, will
enable ILTL to market coal to additional customers beyond EITL’s existing customer
base at an agreed rate per tonne of washed coal that will be paid to EITL, thereby
providing Edenville with additional revenue streams. ILTL will provide an anchor
tenancy at Rukwa, via the initial purchase of a minimum of 3,000 tonnes of washed
coal per month, before increasing to 5,000 tonnes per month over the ensuing 12-
month period. 

**The Loan Agreement**

Key conditions of the Loan Agreement are as follows:

·    To commence within 30 days of the commencement date of the CMA;

·    The first tranche will be between US$350,000 and US$400,000.00;

·    The second tranche will be between US$250,000.00 to US$300,000.00;

·    The third tranche will be between US$ 200,000.00 and US$ 300,000.00;

·    Any loan tranche shall be repaid by Edenville to ILTL within a period of six
months from the date of disbursement of each tranche; and

·    The loan shall attract an interest rate of 9% per annum only on funds drawn
by Edenville from the Lender.

At this stage Edenville does not expect to exercise its rights to the second and
third tranches, however, it has entered into the Loan Agreement as there are no 
additional charges or penalties should Edenville elect not to draw down on these
funds, thereby providing greater access to capital should it be required in the 
future. A further announcement regarding the proposed drawdown of the first tranche
will be made as appropriate.

**Status of Operations at Rukwa**

The Company expects operations to restart at Rukwa by mid-August 2020 following 
planned personnel movements by ILTL representatives and the lifting of travel restrictions.
EITL has used the COVID-19 related shutdown to source key plant replacement spares(
e.g. conveyor belting) following consultation with ILTL, whilst also finalising 
the Company’s mine restart plan. A security team has remained on site since operations
were suspended in April 2020. Further announcements regarding the restart of operations
at Rukwa and the commencement date of the CMA will be made as soon as practicable.

**About ILTL**

ILTL is a privately owned, Tanzanian incorporated company with Dubai connections
and with a focus on infrastructure development, logistics, mining and marketing.
ILTL’s management team has extensive experience in the East and Central Africa region
in the field of logistics, energy, hospitality and oil & gas.

> **Commenting, CEO of Edenville Energy Alistair Muir, said:**
> “I’m delighted to announce the signing of the Loan Agreement, which further cements
> our relationship with ILTL. With a comparatively low interest rate for loans of
> this nature, no material additional charges, implementation fees, penalties or
> equity kickers, we believe it highlights the collaborative approach both EITL 
> and ILTL are taking on the Project and provides Edenville with greater access 
> to capital as required.
> “The contract mining scenario under the CMA means the historic breakeven tonnages
> cited by Edenville are no longer relevant, as the Company now expects to be profitable
> from operations from the first tonne of washed coal that is produced. The focus
> of Edenville is therefore to expand the existing coal purchaser client base and
> to that end, the Company expects to announce shortly the Sales and Marketing Agreement
> with ILTL, which will bring with it not only an anchor tenancy of up to 5,000 
> tonnes per month of washed coal, but also further incentive for ILTL to use its
> network to source additional customers.
> “I look forward to updating shareholders in the near term with respect to the 
> restart of mining operations, the commencement of the CMA and the Sales and Marketing
> Agreement.”

**Update re Warrants granted to Creditors**

In the Company’s announcement of 8 June 2020, Edenville announced that as part of
its settlement agreement with certain creditors it would issue a total of 257,702,400
warrants with a 3 year life to expiry and an exercise price of 0.06 pence per ordinary
share. The number of warrants which are to be granted to creditors is actually 85,900,800
warrants.

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