TIDMEDL
RNS Number : 6826T
Edenville Energy PLC
22 July 2020
22 July 2020
EDENVILLE ENERGY PLC
("Edenville" or the "Company")
US$1 million Loan Agreement
Corporate Update
Edenville Energy Plc (AIM: EDL), the AIM quoted company
operating the Rukwa Coal Project in southwest Tanzania (the
"Project" or "Rukwa"), is pleased to announce that the Company's
subsidiary Edenville International (Tanzania) Limited ("EITL") has
entered into a US$1 million Loan Agreement (the "Loan Agreement")
with its strategic partner Infrastructure and Logistics Tanzania
Limited ("ILTL" or the "Lender").
The signing of the Loan Agreement follows on from the recently
announced Coal Mining Agreement ("CMA") 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 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 wit h 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.
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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contact rns@lseg.com or visit www.rns.com.
END
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