Edenville Energy PLC Rukwa Operational Update & Corporate Update (7529F)
09 Novembro 2022 - 4:00AM
UK Regulatory
TIDMEDL
RNS Number : 7529F
Edenville Energy PLC
09 November 2022
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.
9 November 2022
EDENVILLE ENERGY PLC
("Edenville" or the "Company")
Rukwa Operational Update
And
Corporate Update
Edenville Energy Plc (AIM: EDL) is pleased to provide an update
on operations at its Rukwa Coal Project ("Rukwa") in Tanzania.
Following the recommencement of production at Rukwa, as
announced on 11 October 2022, the Company is pleased to report the
works undertaken to upgrade the wash plant have yielded positive
results, with the wash plant regularly running at the targeted
base-case output of c.100 tonnes per day, which, if sustained and
assuming increases in working time on the ground as referred to
below, achieves the Company's initial target of 4,000 tonnes per
month. However, the period did witness interruptions to production
as components for the excavator, used to extract run of mine
("ROM") coal for delivery to the wash plant, were damaged. These
components have subsequently been replaced and operations are
currently back at the c.100 tonnes per day level of washed coal
output. Management continues to expand the inventory of spare parts
at site to minimise future downtime.
As noted, the performance of the wash plant has been encouraging
and the Company's view remains that a sustained output of 100
tonnes per day, and higher, is achievable. The simplest way for
future increases to be achieved will be to increase daily
production hours from the current eight-hour shifts for five and a
half days per week. The opportunities for longer 12 hour or even
double shifts (16 hour) and seven days per week production are
being examined, including seeking to ensure that on the ground
machinery is capable of meeting the targeted output on an ongoing
basis. In addition, the Company has taken possession of two new
trucks in recent days, which will be used to transport ROM coal
from the coal face site to the wash plant, accelerating the process
and ROM capacity substantially to avoid downtime at the wash
plant.
The quality of ROM coal also has a significant impact on the
output from the wash plant. The specifications of the wash plant,
as a new piece of plant, indicate the output of washed coal should
be approximately 35% of the tonnage inputted. This 35% output is
not achievable by default and is dependent on the quality of coal
inputted and the efficiency of the plant.
To further improve on output to meet and subsequently exceed the
targeted 4,000 tonnes per month yield (assuming no further
interruptions), the Company has engaged the services of Alan
Golding, a competent coal geologist who has many years' experience
in coal mining throughout Africa. Mr Golding has visited the Rukwa
project site and started the process of evaluating the best
location for the next ROM extraction. His efforts have thus far
also uncovered a potentially significant coal seam, previously
unrecognised, which if proven could enable the production of
additional coal for several years to augment or replace current
production if the quality of coal is higher.
If this materialises it has the potential to improve the quality
of the ROM coal and the efficiency of the wash plant over time.
Further work is still required to assess the extent, attractiveness
and viability of this coal seam, however initial reports appear
encouraging.
Demand for Rukwa coal remains strong and all of the washed coal
production from 7 October 2022 to 7 November 2022, being 1,480
tonnes, was sold at prices ranging from US$40 to US$45 per tonne,
with coal fines of 200 tonnes selling at up to US$20 per tonne.
With our current stock pile of fines in excess of 60,000 tonnes the
Company is pleased to have now identified potential customers for
fines and will now look to monetise over time both ongoing
production of fines and the stockpile.
The Company has identified a new long-term customer who is
willing to enter into a contract with the Company for a minimum of
3,000 tonnes per month of washed coal at a price in excess of US$50
per tonne, subject to the Company establishing a stable production
level. Accordingly, the Company expects to increase cashflows as it
reaches higher levels of sustained output. Whilst the rainy season
in Tanzania is expected to have an impact on production capacity,
the Company is taking steps to minimise the disruption by
establishing ROM stockpiles over the next two months, which can be
used if and when necessary. Moreover, the Company is now better
positioned to withstand the impact compared to previous years
following investment in infrastructure and equipment.
Arrangement with contract miner
The Company has been advised that due to the need to undertake a
tender process for the engagement of a local contract mine
operator, the Company has temporarily suspended the previously
announced arrangement with the local operator, as announced on 16
August 2022. This will now enable the Company to receive all of the
proceeds of coal sales, until such time as a tendering process has
been concluded in the coming weeks. The Company has ensured there
is sufficient operational expertise at site during this period.
Update on Dispute with Upendo Group Ltd
In addition, Edenville is advised that the courts in Tanzania
will address in the next few weeks the Company's claim for the
reversal of the transfer of Upendo Group Ltd.'s 10% economic
interest in the local joint venture, which holds the licences
governing the Rukwa project, to a 10% direct holding on the
principal production licence. A further update will be provided in
due course.
For further information please contact:
Edenville Energy Plc Via IFC Advisory
Nick Von Schirnding - Chairman
Noel Lyons - CEO
Strand Hanson Limited +44 (0) 20 7409 3494
(Financial and Nominated Adviser)
James Harris
Rory Murphy
Tavira Securities Limited +44 (0) 20 7100 5100
(Broker)
Oliver Stansfield
Jonathan Evans
IFC Advisory Limited +44 (0) 20 3934 6630
(Financial PR and IR)
Tim Metcalfe
Florence Chandler
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