TIDMEDL
RNS Number : 4695E
Edenville Energy PLC
31 May 2012
31 May 2012
EDENVILLE ENERGY PLC ("Edenville" or the "Company")
Final Results
Edenville Energy plc, (AIM:EDL), the African coal exploration
and development company, today announces its Audited Final Results
for the year ended 31 December 2011
Highlights
Operational
-- 22 vertical diamond drill holes completed at the Mkomolo
Basin, one of three coal projects owned and controlled by Edenville
in the Rukwa Coalfields
-- Acquisition of contiguous coal exploration block covering
494.99km(2) - adjacent to Kiwira-Songwe Coalfield
-- GBP1.5 million raised to fund drilling programs at key coal targets and working capital
Financial
-- GBP8,682,857net assets
-- GBP511,538 cash reserves
-- Group operating loss of GBP1,216,771
Post period
-- Maiden, JORC-compliant inferred resource at Mkomolo of 39
million tonnes of thermal coal at 17 MJ/kg (float density - 2.0 and
Yield - 26%)
-- GBP2.5 million raised following January placing
-- Fully funded to undertake 2012 drill programme to delineate
extensions to Mkomolo coal seams and also test the Muze and Namwele
deposits
Simon Rollason, Chairman of Edenville, commented "Over the past
year we have completed an intensive work programme with
considerable success; the company is now extremely well positioned
to progress towards its eventual aim of developing the Rukwa
Coalfield. The initial JORC-compliant resource at Mkomolo
represents completion of the first step in the Company's strategy
to provide low-cost energy to Tanzania. The more results we
receive, the more clear it becomes that the Rukwa deposit has
significant potential and we look forward to keeping shareholders
updated as we make further progress throughout the year."
Contact:
Edenville Energy plc
Simon Rollason - Chairman
Rakesh Patel - Finance Director
www.edenville-energy.com +44 (0) 20 7099 1940
ZAI Corporate Finance Ltd
Ray Zimmerman/Marc Cramsie +44 (0) 20 7060 2220
Newgate Threadneedle
Graham Herring/Richard Gotla +44 (0) 20 7653 9855
A copy of the Annual Report will be posted to shareholders and
will shortly be made available on the Company's website
www.edenville-energy.com.
EDENVILLE ENERGY PLC
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2011
I am pleased to present the annual financial statements for
Edenville Energy PLC for the period ending 31(st) December 2011,
and report on the key developments of the Group in the past
year.
The major focus of the past year has been the operations spent
on the Rukwa Coalfield in Tanzania and, in particular, on the
Mkomolo deposit. Exploration drilling commenced in July and 22
vertical diamond drill holes in total were completed up to October,
with coal bearing strata identified over 6,500 metres lateral
strike distance with a depth in excess of 230 metres. Wardell
Armstrong International was employed to oversee the drilling
programme and associated core handling procedures with all sample
analysis completed by Inspectorate M and L (Pty) Ltd in Middleburg,
South Africa.
In April 2012 the company announced its maiden in-situ resource
estimate at the Mkomolo Basin of 39 million tonnes of thermal coal
with a calorific value of 17 MJ/kg. This provided further
confirmation that the coal is suitable, with appropriate
processing, for coal fired power generation. The Phase 1 drilling
covered a strike length of approximately 6km and the deposit
remains open to the north, potentially for a further 3.5km and
further remains open at depth to the southwest. The inferred JORC
compliant resource of 39 million tonnes was in line with the
Company's expectations and, given that Mkomolo represents just one
of three deposits on the Rukwa coalfield and is in itself not
drilled out, the upside potential for Edenville Energy looks very
promising. Whilst 2011 saw the Company make outstanding progress at
Mkomolo, it is important to underline that both the Namwele and
Muze deposits remain part of the Group's core focus, and these
deposits will be tested as part of the proposed 2012 drill
programme.
Financial Results
The Group reported an operating loss of GBP1,216,771 (2010:
GBP304,348) for the year ending 31 December 2011 and had net assets
at that date of GBP8,682,857 (2010: GBP8,026,289).
As at 31 December 2011, the Group had cash reserves of
GBP511,538.
The Group has a strong balance sheet and following a placing in
January 2012 which raised GBP2.5million, the Group is fully funded
to undertake the proposed 2012 work programme.
Corporate
In April 2011, the Group announced the successful acquisition of
3 additional exploration licences in south-western Tanzania which
the Group considers to have strong coal potential and which will
form part of the Group's long term exploration strategy. The
licences form a contiguous block covering 494.99km(2) and lie
adjacent to the Kiwara-Songwe Coalfield. The total cash
consideration paid to the private owners was US$161,699. with the
licences being held by Edenville's 99.5% owned Tanzanian
subsidiary, Edenville International (Tanzania) Limited.
Outlook
The outlook for the Group is positive with the maiden JORC
resource announcement the standout achievement of the past year.
The 2012 drill programme will see the continuing delineation of the
extensions to the Mkomolo coal seams whilst testing the Muze and
Namwele deposits. Additionally the Group has signed geophysics and
drill contracts, with field work set to commence at the deposits in
May of this year. We continue to evaluate our portfolio of assets
in Tanzania and will continue to seek new opportunities for company
growth through joint participation, partnerships or ownership where
appropriate. The short to mid-term future for energy commodities
remains positive especially for lower cost producers and Edenville
is well placed to participate strongly in this sector in the
region.
On behalf of shareholders, I would like to take this opportunity
to thank my colleagues and employees for all their efforts
throughout the period. We are excited about the proposed work
programme for the coming year which will build on the hard work put
in since the re-admission in 2010.
Simon Rollason
Executive Chairman
Date: 30 May 2012
REVIEW OF OPERATIONS for the year ended 31 december 2011
It is with great pleasure that I can report that with the
successful completion of last year's drilling and the publication
of the Maiden Inferred Resource Statement at Mkomolo, we have
successfully delineated a resource base of 39 million tonnes from
which we shall be able to expand and add significant further
resources at Rukwa this year. During 2011 the Company increased its
interest in the Rukwa Coalfields from 70% to 80% as per the
agreement signed with the vendor in August 2010. In 2012 the
Company has the option to further increase its shareholding to 90%
with an option payment of $100,000 with the vendor maintaining a
free-carried interest of 10% at that time.
Since our last Annual Report a 3,000m diamond drill program was
completed at Mkomolo (22 drillholes) and Namwele (8 drillholes)
coalfields within our Rukwa Coalfields Project. The results from
this drilling has enabled us, together with our consultants,
Wardell-Armstong International ( "WAI") to report the maiden
resource at Mkomolo of 39 million tonnes within an overall package
of coal measures sequences which total 187 million tonnes. Further
mapping and pitting has outlined that these Karoo sediments hosting
coal measures extend to the north of borehole MK11-18, our current
most northerly drill hole, for at least a further 3.0 to 3.5km. The
2011 drilling covered a strike length of 6.5km, and a width of
approximately 200m, two deep step out holes to trace the coal
measures to the west were abandoned due to poor drilling conditions
and these will be part of our focus for the 2012 drilling
program.
At Namwele eight holes were drilled of which only 5 were
completed, intersecting coal measures, due to poor ground
conditions. These holes will be used to give an outline of the
resource at Namwele but will not allow a JORC compliant resource to
be completed due to the incomplete drillholes. The results from
these holes are still awaited from the laboratory in South
Africa.
With the positive results from the 2011 drilling program as well
as the Tanzanian Government actively seeking new sources of power
for the country, which is currently dependant on ageing diesel
fuelled power stations and hydro-electricity, a second phase of
diamond drilling will take place. The drilling machinery is due to
begin mobilising to site in mid-May upon cessation of the rainy
season. A contract has again been signed with Layne Drilling
International. Their work at the project last year gives the
experience at Rukwa and this we feel will give us the best chance
to successfully complete the planned 7,000m drilling program. Layne
will again be using experienced drilling personnel as well as a
Foreman with over 10 years experience drilling in the Australian
coalfields. All proposed diamond drilling will utilise triple-tube
core barrels for maximum recovery, similar to the 2011 drilling
where we averaged an excellent 95% recovery.
The planned drilling for 2012 will be focused into three
phases:
1) Infill and expansion drilling at Mkomolo. This will in part
be based on the recommendations made by WAI in their Resource
Report of April 2012, with the aim of infilling, expanding and
upgrading the current Inferred Resource to a JORC compliant Measure
and Indicated Resource that will enable mine planning to
commence.
2) Complete and in-fill the current drilling at Namwele to
enable a Maiden JORC compliant Inferred Resource to be developed,
thus enabling us to commence mine planning for a joint mining/plant
operation at the Mkomolo/Namwele Deposits.
3) Initiate the drilling at Muze with the aim of allowing us to
define a Maiden JORC Inferred Resource.
The ongoing drilling and resource evaluation work, costs of
which are being capitalised, will be undertaken by Edenville's
personnel and its qualified consultants, WAI. The aim being that
the Measured and Indicated Resource will be available on Mkomolo
towards the end of the First Quarter 2013, at Namwele an Inferred
Resource during the Second Quarter and the Maiden Resource at Muze
during the Third Quarter of 2013. This will therefore enable us to
commence Mine Planning/Pre-Feasibility studies in the Second Half
of 2013.
Due to the current worldwide interest in coal we along with all
other clients are now having to accept a between 4 and 6 month
turnaround time to obtain assay results. Management is thus
currently attempting to find solutions to this by using other
internationally recognised laboratories that may be less saturated
and would enable us to have a shorter turn around for the results.
This may or may not be successful but if positive then the time
frames indicated above may be shortened.
In April we announced the acquisition of three additional
exploration licences in south-western Tanzania. The licences form a
contiguous block covering 494.99km(2) and lie adjacent to the
Kiwira-Songwe Coalfield which had past historical production and
limited power generation. This additional ground covers an area
with a favourable geological setting for additional coal
discoveries which complements our existing portfolio of coal
focused assets within Southern Tanzania.
Edenville's other coal and uranium licences in South-western
Tanzania continue to progress slowly with mapping and sampling of
the radiometric anomalies. Edenville, with its concentrated effort
in the Rukwa District took the view to continue work and submit
reports to the Tanzanian Ministry of Energy and Mines as the law
requires. However, with the funding the Group secured in January
2012 a further three new geologists have now been added to the
exploration team. This will therefore allow us to advance the
evaluation of these Southern Licences. Work will commence
initially, in June following the end of the rainy season, with the
mapping and sampling of the licences surrounding the historic
Kiwira Coalfields.
Management is actively evaluating other more advanced coal
projects in the African continent in order to expand the Group's
coal resource base.
M J Pryor
Chief Executive Officer
Date: 30 May 2011
GROUP STATEMENT OF COMPREHENSIVE INCOME
year ended 31 december 2011
Note 2011 2010
GBP GBP
Administration expenses (511,315) (281,829)
Share based payments (259,028) (22,519)
Impairment of available for sale financial (446,428) -
asset
Group operating loss (1,216,771) (304,348)
Finance income 4 -
Loss on operations before taxation (1,216,767) (304,348)
Income tax expense - -
Loss for the year (1,216,767) (304,348)
Other comprehensive income/(loss)
Profit/(loss) on translation of overseas
subsidiary 27,839 (265,273)
Total comprehensive loss for the year (1,188,928) (569,621)
Attributable to:
Equity holders of the Company (1,188,476) (569,632)
Non-controlling interest (452) 11
Loss per Share (pence)
Basic and diluted loss per share (0.04p) (0.01p)
All operating income and operating gains and losses relate to
continuing activities.
No separate statement of comprehensive income is provided as all
income and expenditure is disclosed above.
GROUP STATEMENT OF FINANCIAL POSITION
AS AT 31 december 2011
Note 2011 2010
GBP GBP
(as restated)
Non-current assets
Property, plant and equipment 17,762 23,683
Intangible assets 1 9,454,607 8,385,072
Equity investments - available
for sale 2 - 446,428
9,472,369 8,855,183
Current assets
Trade and other receivables 104,324 11,590
Cash and cash equivalents 511,538 625,639
615,862 637,229
Current liabilities
Trade and other payables (117,212) (179,233)
Current assets less current
liabilities 498,650 457,996
Total assets less current
liabilities 9,971,019 9,313,179
Non-current liabilities
Provision for deferred tax (1,288,162) (1,286,890)
8,682,857 8,026,289
Equity
Called-up share capital 740,588 658,922
Share premium account 9,707,686 8,224,353
Share option reserve 289,907 52,616
Foreign currency translation
reserve (237,434) (265,273)
Retained earnings (1,838,945) (644,367)
Issued capital and reserves attributable to owners of
the parent company 8,661,802 8,026,251
Non- controlling interests 21,055 38
Total equity 8,682,857 8,026,289
The financial statements were approved by the board of directors
and authorised for issue on 30 May 2012 and signed on its behalf
by:
S. Rollason
Director
Company registration number: 05292528
GROUP STATEMENT OF CHANGES IN EQUITY
year ended 31 december 2011
-----------------------------------------Equity
Interests-----------------------------
Share Share Retained Share Foreign Total Non-controlling Total
Capital Premium Earnings Option Currency interest
Account Reserve Reserve
GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January
2010 330,133 730,969 (343,352) 33,441 - 751,191 - 751,191
- -
Issue of share
capital 328,789 7,650,919 - - - 7,979,708 - 7,979,708
Cost of shares
issued - (157,535) - - - (157,535) - (157,535)
Transfer on
exercise
of warrants - - 3,344 (3,344) - - - -
Share based
payment
charge - - - 22,519 - 22,519 - 22,519
Foreign
currency
translation - - - - (265,273) (265,273) - (265,273)
Other reserves - - - - - - 27 27
Total
comprehensive
loss for the
year - - (304,359) - - (304,359) 11 (304,348)
At 1 January
2011 658,922 8,224,353 (644,367) 52,616 (265,273) 8,026,251 38 8,026,289
Issue of share
capital 81,666 1,483,333 - - - 1,564,999 - 1,564,999
Transfer on
exercise
of warrants - - 21,737 (21,737) - - - -
Minority
interest
on fair value
adjustment - - - - - - 21,469 21,469
Share based
payment
charge - - - 259,028 - 259,028 - 259,028
Foreign
currency
translation - - - - 27,839 27,839 - 27,839
Total
comprehensive
loss for the
year - - (1,216,315) - - (1,216,315) (452) (1,216,767)
At 31 December
2011 740,588 9,707,686 (1,838,945) 289,907 (237,434) 8,661,802 21,055 8,682,857
.
group cash flow STATEMENTS
year ended 31 december 2011
Year ended Year ended
31 December 31 December
Note 2011 2010
GBP GBP
Cash flows from operating activities
Operating loss (1,216,771) (304,348)
Loss on disposal of fixed assets - 5,849
Impairment of tangible & intangible non-current 482,964 -
assets
Depreciation 5,921 5,468
Share based payments 259,028 22,519
(Increase)/decrease in trade and other receivables (89,245) 54,544
(Decrease)/increase in trade and other payables (50,445) 92,103
Foreign exchange differences (35,344) (5,537)
Net cash outflow from operating activities (643,892) (129,402)
Cash flows from investing activities
Purchase of subsidiary, net of cash acquired
with subsidiary - (12,846)
Purchase of exploration and evaluation assets (1,034,890) (290,659)
Purchase of fixed assets - (35,000)
Finance income 4 -
Finance costs - -
Net cash used in investing activities (1,034,886) (338,505)
Cash flows from financing activities
Proceeds from issue of ordinary shares 1,564,999 1,010,000
Share issue costs - (157,515)
Net cash inflow from financing activities 1,564,999 852,485
Net (decrease)/increase in cash and cash
equivalents (113,779) 384,578
Cash and cash equivalents at beginning of
year 625,639 241,061
Effect of foreign exchange rate changes on (322) -
cash and cash equivalents
Cash and cash equivalents at end of year 511,538 625,639
NOTES TO THE COMPANY'S FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2011
1. Intangible assets
Evaluation and Exploration
Assets
Javan Tanzanian Goodwill
Licenses Licences Total
GBP GBP GBP GBP
(as restated)
Cost or valuation
As at 1 January 2010 19,082 - - 19,082
On acquisition - 7,044,399 1,336,332 8,380,731
Additions 17,454 276,983 - 294,437
Foreign exchange adjustment - (259,736) (49,442) (309,178)
As at 31 December 2010 36,536 7,061,646 1,286,890 8,385,072
Accumulated amortisation and
impairment
As at 1 January 2010 and 31 December
2010 - - - -
Net book value
As at 31 December 2010 36,536 7,061,646 1,286,890 8,385,072
Evaluation and Exploration
Assets
Javan Tanzanian Goodwill
Licenses Licences Total
GBP GBP GBP GBP
(as restated)
Cost or valuation
As at 1 January 2011 36,536 7,061,646 1,286,890 8,385,072
Additions - 1,073,913 21,469 1,095,382
Foreign exchange adjustment - 9,417 1,272 10,689
At 31 December 2011 36,536 8,144,976 1,309,631 9,491,143
Accumulated amortisation and
impairment
As at 1 January 2011 - - - -
Impairment charge 36,536 - - 36,536
As at 31 December 2011 36,536 - - 36,536
Net book value
As at 31 December 2011 - 8,144,976 1,309,631 9,454,607
Javan licences
On 27 May 2009, the Company signed an option agreement with
Javan Investments Company Limited, a private Tanzanian registered
company for two prospecting licences in Tanzania. Under the terms
of the option agreement, the Company acquired an initial 25%
interest in both licences for a consideration of US$15,000 per
licence. In the opinion of the Directors these licences should be
fully impaired in line with IAS 36 and IFRS 6 as at 31 December
2011. On the basis that no further exploration and evaluation
expenditure is expected on these licences and there is no
expectation of the Company applying for renewal of the licences in
the future.
Tanzanian Licences and Goodwill
The Tanzanian licenses comprise six prospecting licences
acquired on the acquisition of Edenville International (Tanzania)
Limited in 2010. The Licenses cover 598km(2) in Tanzania, located
in a region displaying viable prospects for both uranium and coal
and occur in a country where the government's policy for
development of the mineral sector aims at attracting and enabling
the private sector to take the lead in exploration mining,
development, mineral beneficiation and marketing. The value of the
assets obtained on acquisition represent the fair value of the
consideration paid to the vendors.
This year a further three exploration licenses were acquired in
south west Tanzania which the Group considers to have strong coal
potential. The licences form a contiguous block covering 494.99
km(2) and lie adjacent to the Kiwara- Songwe Coalfield.
The group has two CGUs: coal and uranium, as disclosed in note 5
segmental information, which are relevant for the purposes of
evaluation licences and goodwill. Goodwill arose as a result of the
valuation placed on the 6 Tanzanian licences acquired on the
acquisition of Edenville (Tanzania) Limited. As such the value of
Goodwill is linked to the value of the licences.
Goodwill at the year end totalled GBP1,286,890. GBP272,135 has
been allocated to coal licences and GBP1,014,755 to uranium
licences. The allocation has been made based on the value of the
licences on the date of acquisition.
The carrying value of exploration and evaluation assets
including goodwill is reviewed annually to determine whether it is
in excess of its recoverable amount. The Directors have determined
the recoverable amounts using value in use. The value in use is
determined at the cash generating unit level, in this case the coal
and uranium exploration and evaluation assets.
The group has so far undertaken limited exploration of its
licences and as such it does not currently have any resources or
reserves estimates on which to value its assets. In the absence of
data specific to the group's licences, the Directors have
determined the fair value of licences and hence goodwill based on
comparable neighbouring coal and uranium exploration and
development projects.
The Directors have used the following assumptions for its
uranium licences in South-Western Tanzania, based on published
information from a neighbouring deposit, last updated in November
2011:
-- Average annual production of U O Uranium : 4.2million lbs
-- Initial life of mine :12 years
-- Average cash operation costs: US$22.20 per Ib of U O Uranium
-- Total capital costs: US$ 430million
The Directors have used the following assumptions for its
uranium licences in Northern Tanzania based on published
information from a neighbouring deposit, last updated in June
2010.
-- Cash sales price US$ 50 per lb
-- Cash costs US$ 20 per lb
-- Recovery of 80% of 6.7m lbs
-- Sales split evenly over a 10 year life of mine
-- No potential additional resources were included
These assumptions were used to arrive at an estimated
recoverable amount per square kilometre. A range of discount rates
ranging from 10% to 20% was applied to reflect the early
exploration stage of the group's projects. These discounted values
were then applied to the licence area of the group's licences, as
appropriate, and an average value was taken and compared against
the initial value placed on the licences. There were no indications
of impairment in the group's uranium licences and the associated
goodwill.
For the coal licences the Directors have considered the success
of a neighbouring deposit which covers an area of 61Km(2) and has a
JORC compliant resource of 210 million tonnes. The neighbouring
licence also estimates that the successful drilling programs
undertaken in two newly acquired blocks have the potential to add a
further 150-200m tonnes of coal.
The area has been earmarked for a proposed US$1.2bn power
station with estimated returns of US$300m. This would result in
high licence valuations and given that the group's licence covers
three times the area of the neighbouring mine and if the group
replicates the drilling success then the Directors consider that
there has been no impairment in their coal licences.
Based on the above, the Directors do not consider the licences
they hold and hence Goodwill to be impaired.
The calculation of value in use is most sensitive to the
following assumptions:
-- Recoverable resources and reserves
-- Future price of coal and uranium
In the Directors' view no reasonable change in any of the key
assumptions would trigger an impairment charge at 31 December
2011.
2. Equity investments - available for sale
2011 2010
GBP GBP
Fair value
At 1 January 2011 446,428 446,428
Impairment in the year (446,428) -
At 31 December 2011 - 446,428
On 13 March 2009, the Company entered into a collaboration and
option agreement on a group of emerald mining licences in Tanzania,
Africa, with Obtala Resouces Plc ("Obtala") and Obtala's subsidiary
Mindex Invest Limited ("Mindex").
The Company's focus is now on coal exploration and mining and
the directors therefore consider it appropriate to impair the cost
of these emerald mining licences, as the company does not intend to
develop these assets. As at 31 December 2011, the Directors deemed
this investment to be permanently impaired and have therefore
written off the carrying amount in the statement of comprehensive
income.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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