Termination of Coal Mining Agreement

RNS Number : 3143N

Edenville Energy PLC

31 May 2022

 

31 May 2022

Edenville Energy Plc

("Edenville" or the "Company")

Termination of Coal Mining Agreement

Edenville Energy Plc (AIM: EDL) announces an update with respect to the operation of the Company's Rukwa Coal Project in Tanzania.

As announced on 18 May 2022 the Company was in discussions with Nextgen Coalmine Limited ("Nextgen") to vary the contract for the operation of the Company's Rukwa Coal Project, entered into on 3 February 2022 (the "Contract").  The Company is pleased to confirm it has reached an agreement with NextGen to terminate the Contract and has subsequently resumed full control of the site and mining operations. 

Following the termination of the Contract all mining equipment has been brought back into service by the Company, whilst an additional pre-strip excavator has been added to the fleet. Up to three additional trucks are also being sourced to rapidly scale production. The Company's initial goal is to satisfy existing demand from local customers of 1,500 tonnes of washed lump coal product and 500 tonnes of coal fines in the immediate future, targeting sales of 5,000 tonnes per month of washed coal late in Q3 2022, with coal fines sales also expected to continue and possibly expand. The Company believes there is sufficient demand based on its existing order book and recent discussions with potential customers to sell any coal that is produced at Rukwa.

Additionally, further to the announcement on 18 May 2022 that Upendo Group Ltd.'s current 10% economic interest in the joint venture, which holds the licences governing the Rukwa Project, had been transferred to a 10% direct holding on the principal production licence, the Company remains in discussions with its legal advisers regarding the validity of the transfer and consequences thereof.

Alistair Muir, CEO of Edenville, commented: "The agreed termination of the agreement with Nextgen will enable the Company to take advantage of the recent macro changes that have made the economics of our Rukwa project considerably more attractive.  The Company is determined to maximise cash returns in the current global coal environment, especially given the attractive pricing forecast over the coming years.  To this end Edenville has already started applying a modest proportion of its existing cash resources towards expanding the Rukwa operations to meet this heightened demand. I look forward to making further announcements in due course."

For further information please contact:

Edenville Energy Plc Jeff Malaihollo - Chairman Alistair Muir - CEO		[phone]
Strand Hanson Limited (Financial and Nominated Adviser) James Harris Rory Murphy		[phone]
	Tavira Securities Limited (Broker)	[phone]
	Oliver Stansfield Jonathan Evans
IFC Advisory Limited  (Financial PR and IR)  Tim Metcalfe Florence Chandler		[phone]

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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