TIDMEDL
RNS Number : 4096C
Edenville Energy PLC
11 October 2022
11 October 2022
EDENVILLE ENERGY PLC
("Edenville", "Company" or the "Group")
Rukwa Coal Project Operational Update
Edenville Energy Plc (AIM: EDL) is pleased to provide an update
on operations at its Rukwa Coal Project ("Rukwa") in Tanzania.
Highlights
- Production recommenced at Rukwa at an initial 4,000 tonnes per month of washed coal
- Completed overhaul of wash plant expected to significantly improve output
- Potential customer base has now been identified in excess of
the previously targeted 6,000 tonnes per month of washed coal
- Pricing discussions now exceeding the previously outlined range of US$35-50 per tonne
Recommencement of production and improvements to the wash
plant
Following the planned servicing and repairs on the main
machinery and wash plant at the Rukwa site, as well as the purchase
of two additional trucks, the Company is pleased to report
production and sales have now recommenced at Rukwa. In particular,
the wash plant has benefited from significant repair and upgrades,
which is expected to address historically poor performance.
Since production of coal recommenced last week, under the
day-to-day operational management of Brahma Energies Limited
("Brahma"), as detailed in the Company's announcement of 16 August
2022, output from the wash plant has averaged 14.87 tonnes of
washed coal per hour, consistent with the initially targeted
cumulative monthly output of approximately 4,000 tonnes per month.
Further refinements to operations will continue over the coming
weeks, as Brahma seek to optimise output and further improve
production rates of washed coal. The Company is also ensuring an
inventory of spare parts is amassed at site, thereby minimizing any
future down time.
Further announcements will be made on levels of production in
due course. Photos and videos of the operations at the Rukwa site
will also be uploaded to the Company's website shortly.
Update on sales and offtake
With the wash plant now working consistently, the Company in
conjunction with Brahma, expect to shortly enter into supply
agreements with identified existing and new clients.
The recommencement of production at Rukwa has coincided with a
dramatic uplift in global thermal coal prices, which have risen
from c.US$125 per tonne a year ago to c.US$450 per tonne in 2022,
with Tanzanian coal now also being exported to Europe. This has
positively impacted the sales price for Rukwa coal. Both the macro
and micro outlook, coupled with the efforts of the new in-country
marketing team to reach new customers, has led to significant
progress with potential customers.
The Company believes a potential customer base has now been
identified in excess of the previously targeted 6,000 tonnes per
month of washed coal at a net price greater than the previously
estimated range of US$35-50 per tonne at the mine gate.
Accordingly, the board is assessing further opportunities to
enhance the production required to meet this increase in demand,
and economics of the Rukwa project, especially given that at the
current production rate, the Company expects to soon become cash
generative.
Further announcements will be made in due course, as
appropriate.
Noel Lyons, CEO of Edenville, commented:
"I am delighted to confirm operations at Rukwa have recommenced.
Since joining the board three months ago with my new fellow
directors, we have overseen dramatic change at site. Operations
have been overhauled, and new mining and processing equipment has
been procured and delivered to site, whilst other parts of the
existing infrastructure have been repaired and upgraded. Together
with our new day-to-day operational management team at the mine, we
are seeing our co-operation with Brahma bearing fruit already, with
production now underway.
"This has coincided with a dramatic uplift across the globe in
the thermal coal price, which has seen prices rise more than
threefold over the last year, with Tanzanian coal now also being
exported to Europe. This has naturally positively impacted the
likely sales price for Rukwa coal, which now exceeds the previously
reported guidance. Both the macro and micro outlook has led to
potential customers coming forward and we expect to provide an
update in the near term.
"Accordingly, with the Company expected to be shortly turning
cashflow positive on the basis of current production levels and
anticipated supply agreements, I believe the outlook for Edenville
and Rukwa is now more promising than ever before. We will continue
to optimise Rukwa where possible and I look forward to providing
updates on additional progress in due course."
For further information please contact:
Edenville Energy Plc Via IFC Advisory
Nick Von Schirnding - Chairman
Noel Lyons - CEO
+44 (0) 20 7409
Strand Hanson Limited 3494
(Financial and Nominated Adviser)
James Harris
Rory Murphy
+44 (0) 20 7100
Tavira Securities Limited 5100
(Broker)
Oliver Stansfield
Jonathan Evans
+44 (0) 20 3934
IFC Advisory Limited 6630
(Financial PR and IR)
Tim Metcalfe
Florence Chandler
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018.
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END
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