LONDON (Alliance News) - Edenville Energy PLC on Wednesday said it will book impairments after relinquishing three licences in Tanzania to allow the company to concentrate all of its manpower and financial resources at the Rukwa coal-to-power project in the south-west of the country.
All companies holding exploration licenses within the country need to be continually investing in them to keep the licenses intact, and therefore Edenville has decided to relinquish them so not to be distracted from its flagship Rukwa project.
The relinquished licenses were originally acquired by the company in all-share deals when the company was admitted to AIM back in 2010. Edenville said licenses PL5790, PL5659 and PL6174 have shown little indication of containing an economic resource based on the work carried out since they were acquired by the company.
By offloading the unsatisfactory licenses, the company will reduce its license fee and work commitments by an overall USD250,000 over the next 12 months, allowing Edenville to focus its resources and attention on the Rukwa coal-to-power project.
However, the move will lead to an impairment charge of around GBP3.6 million being booked in the current financial year that will run until the end of 2016. Edenville said the net book value of all of its exploration and evaluation assets, including goodwill, was around GBP8.2 million at the end of June 2015.
"All available manpower and financial resources are now being concentrated at the Rukwa project site to enable the company's Rukwa coal-to-power project to move forward. The first road building and mining equipment is expected to arrive on site this week. Initial work is planned to be the upgrading and formation of roads and storage facilities," said the company.
Edenville shares were trading flat at 0.0300 pence per share on Wednesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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