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As I've already stated MM & TB, the decision to wait for the 10MW PPA and full funding may well be the right one, but frankly it's irrelevant to my point. The fact is it does not explain TGs comments in the interview below about taking control of the timing of the construction. They were empty words justifying the raise - it really is not a good look. To even mention the 2MW award now in the finals is insensitive to say the least - it just highlights the nonsense.
https://www.boardroom.media/article-single/ASX:-TOU-TLOU-Energy-completes-AUD-dollar4.725m-capital-raising-March-18th-2021-11-28-04
Agree with that MM.
Let's not forget the detail design by Mott and tenders are all complete.
Let's say we started physical construction of the TL scope, by now the company would have been back to shareholders for more money/equity that would have gone down like a lead balloon. And If this is a build and transfer model as I believe it is then this complicates things further.
Don't forget the preferred finance option is with companies who want a PPA in place before committing.
I also believe the PPA and financing could well come hand in hand if not very close behind. The financing is not the issue IMO the PPA is and as MM has stated that's currently doing the rounds in the slow machine that is the Botswaba system.
I agree with minnabo's take on the PPA, and I think it important to look back over the PPA timeline. From my notes;
1. BPC appointed Transactional Advisers from the African Legal Support Facility (sub of AfDB) last December.
2. Said TAs started work on 11th Jan (memory). The ALSF's website gives (gave) a 6-8weeks timescale for typical PPA negotiations.
3. 8 weeks from 11th Jan took us to 8th March, ie an informed projection of PPA conclusion.
4. The company raised money on 17th March for construction of transmission lines, presumably in reasonable anticipation of a PPA conclusion - though reserving the right to redirect the funds.
5. Now, a full 6 months later, the PPA is still inside the Botswana system - somewhere!!!
I'm with the view that there is no point WHATSOEVER building out the power line WITHOUT the guarantee of a PPA contract. None. However raising the funds in anticipation was sound practice.
In the meantime the company have got on and done what they can. They have spirited Danny Horne, COO and drill maestro, out of Prison Camp Australia. And then they have signed a binding HoA with Synergen Met to produce carbon product and Hydrogen from the gas that is currently being flared at Lesedi. They have pressed ahead with stuff that is under their control.
I am 100% happy with this.
NP - how do you interpret the comment then ?
Anyone can change their mind and to me it makes perfect sense to wait for the 10MW PPA signing . Agree to disagree but feel we are not exposing ourselves more than we have to at this time.
'Why would you proceed with grid construction if there is no 10MW PPA agreement in place ?'
That may be true Minnabo - but the company said they would start construction after securing the 2MW and raising funds. Is that good management too? Misrepresenting your intentions to shareholders?
We can't all be blessed with your intellectual prowess and foresight, but luckily we have you here to patronise us all on a daily basis.
Obviously we all understand the message you condescending twit.
Clearly then you don’t understand the significance or subtlety of the comment.
I can’t help you with your own lack of business awareness or intelligence. But maybe a 2.4 pence share price should give you a big clue.
Thornback, he’s got to find something negative to say on a daily basis, so he constantly rehashes the same points.
Imagine spending your life trolling a company you’re not invested in. Sad.
Why would you proceed with grid construction if there is no 10MW PPA agreement in place ?? Great management in my eyes and low intelligence if you think otherwise. GLA
What were you expecting moagi..?
We all know it's all about the PPA
IMHO, the entire report can be distilled down to this short paragraph:
“The company’s 10MW PPA with BPC is well advanced at the time of writing. Tlou has decided to proceed with the construction of the grid connection once the 10MW PPA is signed, and the balance of the funds required for this process are secured. “
Classic !!
Dear shareholder, please be advised the mgmt of your company has decided to build the necessary power project infrastructure BUT we will only do this first when we are awarded an actual power project contract and second when we have secured the necessary funding that will allow us to execute on our power project plan.
This is written in the Managing Directors report FFS - unbelievable !!
'The Company has already made significant achievements including sustained gas flows at the Lesedi Power Project ("Lesedi"), signing of a Power Purchase Agreement with the Botswana Power Corporation (BPC)'
'The Company's 10MW PPA with Botswana Power Corporation is well advanced at the time of writing. Tlou has decided to proceed with construction of the grid connection once the 10MW PPA is signed, and the balance of funds required for this process are secured.'
Not sure what makes the signing of the 2MW PPA significant when you consider the second statement. It's only remaining significance appears to be the justification for raising funds so soon after the open offer. At least they haven't spent it all yet.
https://hotcopper.com.au/threads/ann-annual-report-to-shareholders.6297020/?post_id=56224004