LONDON (Alliance News) - Edenville Energy PLC on Tuesday said it entered into a conditional convertible funding agreement with an entity managed by the Lind Partners LLC to make up to USD2.8 million available for working capital and expansion purposes.
The Tanzanian coal project developer said it will secure an initial USD750,000 loan immediately and a further loan of up to USD2.0 million will be drawn with mutual agreement between Edenville and Lind Partners.
The USD750,000 will be used to cover the purchase of a second loader to load the pre-screen plant and coal delivery trucks, Edenville said. These funds will also be used for the purchase of a second excavator to open up the new mining area to the north of the current excavations.
The company also plans to use these funds to cover the costs of site lighting to allow 24 hour per day operation and to buy an additional spares package for the site plant and equipment to reduce any delays in production.
The maximum funds available to the company under the deal will be USD2.8 million, with USD750,000 expected to be received in mid-November.
From the mid-February, Edenville said it will start paying instalments of GBP45,000 a month.
The company will pay Lind Partners a commitment fee of USD37,500 from the USD750,000 loan proceeds. In addition, Lind partners will also receive options over 99.6 million shares exercisable for four years at the 0.29 pence each.
"We are pleased to have secured this funding which will allow us to expand our coal production activities and take further advantage of the demand for our coal that we are currently experiencing," said Edenville Chief Executive Rufus Short.
"We have explored a number of funding options and believe, of the options available, the structure of the convertible agreement provides the company with the appropriate amount of flexibility to allow us to accelerate our growth strategy," added Short.
Edenville shares were trading 2.6% higher on Tuesday at 0.20 pence each.
