Additional Bulk Sampling Results

RNS Number : 8817Q

Edenville Energy PLC

05 December 2016

 

5 December 2016

EDENVILLE ENERGY PLC

("Edenville" or the "Company")

Additional Bulk Sampling Results

Edenville Energy plc (AIM:EDL), the Company developing an integrated coal to power project in western Tanzania, is pleased to announce the second set of results the Company has received from SGS Laboratories in relation to the recent bulk sampling programme carried out on the Mkomolo and Namwele deposits and detailed in the Company's announcement on 27 September 2016.

These results cover seam MK1 and follow the results of the sampling of seam MK2 announced on 15 November 2016.

Key Points:

·    Results from seam MK1 confirm coal as suitable for the provision of power plant feed;

·    Only moderate, or in certain cases, no washing will be required for the MK1 seam coal to be used in the combustion process in a coal fired thermal power plant;

·    Where washing is required, high yields of approximately 60% are confirmed as achievable to produce a high quality power plant feed product;

·    The results from the sampling and wash tests of MK1 further support and validate the results from MK2 and the recently constructed financial model and Resource Technical Assessment;

·    Applying an increased wash to seam MK1, results in a product above 20MJ/kg which offers scope for supply into the local and regional markets; and

·    The Company is working with potential local customers assessing the options to establish mining operations in 2017.

Rufus Short, CEO of Edenville, commented: "The two seams opened up so far in South Mkomolo have demonstrated very good values and wash yields for coal ideally suited for the proposed power plant. Assuming the yields can be translated into production, this will have a significant positive impact on the economics of the project.   This was very near surface coal and once through the weathered zones the potential for even better qualities is there.  We have also received interest for our coal from other power projects planned in East Africa and are in discussions with these groups on pricing and supply.  We are confident our Rukwa coal can be used in a variety of power plants including the planned facility at Rukwa.

"Additionally the seams also contain significant quantities of higher energy value coal above 20MJ/kg, suitable for sale into local and regional industrial applications and we are in advanced discussions with potential customers to open up production in 2017.

"We now have a Phase 1, 10 year mining plan which opens up the northern area of Mkomolo and can produce multiple product streams to provide both power plant feedstock and coal for industrial applications.  I very much hope to be able to update shareholders soon on all of these areas."

Technical Details

The results from seam MK1 confirm both that the recent results in MK2 can be generally replicated in different seams and that the coal is well suited for use in thermal power generation.  As previously stated in the Company's announcement of 15 November 2016 this data will form a crucial part of the process going forward to design and construct a coal fired power plant at the Rukwa project site.

Thus any washing of the coal to provide power plant feed would primarily be to a point where moderate and low cost treatment of the coal would produce a fuel that is optimum for the combustion process and maximise the tonnage available.

Subsequent to the wash results, the Company can now confirm the suitability of this coal to provide a sustained and reliable fuel supply to a power plant project.  Combined with the recent analysis carried out on available coal resources, the Company can now provide a high degree of validation around the coal deposit at Rukwa which directly feeds into the power plant design process.

Again similar to the behaviour when washed of MK2, the MK1 bulk sample produced results which indicate only moderate washing would be needed to produce a coal suitable for use in the power generation process. Recoveries again exceeded our expectations in the mid-range material, particularly between 14 and 17MJ/kg.   Additionally, economically viable yields for coal with an energy value above 20MJ/kg indicate a large proportion of this type of coal has the potential to be sold into the market for local industrial usage.    

The sample from MK1 included a significant proportion of friable and weathered material, distinguishable from the main seam below.  This was included in the test work in order to determine its suitability in the combustion process.  This material generally demonstrated lower energy values and would probably not be used as power plant feedstock.  When this coal is mined commercially there is the likelihood that a large proportion of the weathered material can be separated by selective mining, rather than needing to be washed out subsequent to mining, thus reducing the overall washing cost.  As the seam deepens, this weathered material is expected to reduce.     

Sample MK1 which lies in the southern end of the Mkomolo deposit produced raw unwashed values as shown in Table 1.

Table 1 Raw Coal

Inherent Moisture	Ash	Volatile Matter	Fixed Carbon	Calorific Value	Total Sulphur
%	%	%	%	MJ/kg	%
4.0	54.4	19.3	22.3	10.3	3.2

Applying a moderate or partial wash to the raw coal based on a density of 2.2 the following product was obtained as shown in Table 2.  The yield from this wash or "de-stoning" was high at 60%.

Table 2 Washed Coal for Power Plant

Inherent Moisture	Ash	Volatile Matter	Fixed Carbon	Calorific Value	Total Sulphur
%	%	%	%	MJ/kg	%
4.6	38.3	24.8	32.4	16.1	3.3

The resultant product is considered suitable for the combustion process and typical of many coals used in power generation worldwide. 

All values have been calculated on an air dried basis.

The MK1 seam, along with seam MK2, contains significant quantities of higher energy value coal above 20MJ/kg that could be utilised in local and regional industrial applications.  Additionally we have also identified large areas to the north in Mkomolo that contain high value coal that could be sold to markets other than the Rukwa Coal to Power project.  The material constitutes part of a Phase 1, 10 year mining plan that can provide a multiple product stream for both power plant and commercial sales.  The Company is working with potential customers assessing the options to establish mining operations in 2017.

Qualified Person Review

Mark J. Pryor, Pr.Sc.Nat. has reviewed and approved the technical information contained within this announcement in his capacity as a Qualified Person, as defined by the AIM Rules and National Instrument 43-101 Standards of Disclosure for Mineral Projects.

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 Rufus Short - CEO	[phone]
Northland Capital Partners Limited (Nominated Adviser) Gerry Beaney David Hignell	[phone]
Optiva Securities Limited (Broker) Jeremy King Graeme Dickson	[phone]
IFC Advisory (Financial PR and IR) Tim Metcalfe Graham Herring Heather Armstrong Miles Nolan	[phone]

 

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