Edenville Energy PLC Rukwa Coal to Power Project Update (7748R)
14 December 2016 - 6:00PM
UK Regulatory
TIDMEDL
RNS Number : 7748R
Edenville Energy PLC
14 December 2016
14 December 2016
EDENVILLE ENERGY PLC
("Edenville" or the "Company")
Rukwa Coal to Power Project Update
Edenville Energy plc (AIM:EDL), the Company developing an
integrated coal to power project in western Tanzania, is pleased to
provide an update on the current status of EPC (Engineering,
Procurement and Construction) work at the Rukwa Coal to Power
Project.
Key Points:
-- Proposals for 120-135 MW power plant construction obtained
from several EPC Groups, including an option for lower cost, near
term construction;
-- At this stage, the Company has not tied itself to a
particular group in order to draw on the knowledge and experience
of different groups before finalising the most appropriate deal for
Edenville;
-- Independently produced financial model supports previous
estimates and demonstrates a robust project;
-- The Company continues to pursue opportunities for early
small-scale mining and is in discussions with several potential
off-take buyers of Rukwa coal; and
-- The Project was visited by the Tanzanian Deputy Commissioner
of Mines in early December to discuss enlargement of the Mkomolo
Mining Licence.
Power Plant
Edenville has recently received several technical and financial
proposals for EPC work to construct a power plant of between 120MW
and 135MW at the Rukwa Coal to Power Project site. Whilst the
Company's Rukwa coal resource could support a larger power plant it
is currently envisaged that a plant in this range will be the best
option to establish power generation in the shortest possible
timescale.
Much of the work has centred on using standard well tested "off
the shelf" technology and where possible these are based on
previous contracts to build similar sized plants in other parts of
the world and in East Africa.
The proposals received include contributions from Runh Power,
with whom we have had a collaboration agreement through 2016.
Another major international EPC group, who wish to be unnamed for
now, but who are already active in East Africa, has also completed
a comprehensive independent financial review as part of their
project proposal. Their financial review supports the projects
viability, adds to the previous work carried out by Lahmeyer India
in 2015 and provides a framework to move forward with development
options.
Throughout this process, the Company has remained autonomous and
has not been contractually tied to one particular EPC group. This
has enabled Edenville to draw on the knowledge and experience from
different parties and has resulted in several options being put
forward and assessed, something that would be difficult to achieve
should we have been in an exclusive agreement at this stage of the
project.
The differences in EPC costs between various proposals have been
significant. Considerable cost savings have been identified which
could potentially be applied to the construction and operation of
the power plant and particularly, options for plant acquisition
could result in a material reduction of overall project costs.
These proposals mean that the Company will be able to select the
most financially viable route to construct the power plant project
whilst also meeting the requirements of the Tanzanian
Government.
Although our Collaboration Agreement with Runh Power officially
came to an end on 1 December 2016, the Company continues to work
alongside Runh to further progress suggested suitable options for
construction and funding. We are also continuing to work in a
similar manner alongside the EPC group that developed the
independent financial model to look at the most appropriate next
steps forward for the project.
In parallel with the work completed by the EPC groups and the
continuing work the Company is undertaking to explore financing
options, the project has recently gone through extensive review by
the Tanzanian authorities. We are now awaiting further directives
from senior government representatives on how they wish to proceed
with the power development and will update our shareholders on
further developments as they occur.
Opportunities for Early Mining
As part of its strategy the Company is also looking at
opportunities to start small scale mining to satisfy growing
domestic coal demand related to the banning of imported coal into
Tanzania.
The Company is currently talking to several potential off-take
buyers and is selecting suitable areas and coal seams for
extraction. As previously announced it remains the Company's
intention to establish mining operations in 2017.
The Company will update its shareholders again when these
discussions reach a conclusion.
Visit to Site by Commissioner of Mines
In early December a visit was conducted to our Rukwa site by
Eng. Ngowi, Tanzanian Deputy Commissioner of Mines. Mr Ngowi met
with Edenville staff and discussed the pending enlargement of the
mining licence at Mkomolo.
The Company is pleased to report that the discussion was
positive and the Tanzanian Ministry of Energy and Minerals ("MEM")
continue in their support for the project.
Rufus Short, CEO of Edenville, commented: "We are delighted by
the support we are receiving from various EPC groups. The extensive
work that they have undertaken in conjunction with Edenville staff
has validated the potential for our coal to power project. We are
now investigating detailed proposals to advance the project
alongside the Tanzanian government. These ongoing discussions,
coupled with the work we are doing to secure early stage mining at
Rukwa mean these are very busy and exciting times for
Edenville."
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 +44 (0) 20 7652
Rufus Short - CEO 9788
Northland Capital Partners Limited
(Nominated Adviser)
Gerry Beaney +44 (0) 20 3861
David Hignell 6625
Optiva Securities Limited
(Broker)
Jeremy King +44 (0) 20 3137
Graeme Dickson 1902
IFC Advisory
(Financial PR and IR)
Tim Metcalfe
Graham Herring
Heather Armstrong +44 (0) 20 3053
Miles Nolan 8671
This information is provided by RNS
The company news service from the London Stock Exchange
END
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