EDL.L Share News (EDL)

(Sharecast News) - Edenville Energy updated the market on its Rukwa Coal Project in south west Tanzania on Wednesday, reporting that after its £2.475m capital raise in May, it had been focussed on preparing the site to meet expected demand for Rukwa coal.
The AIM-traded firm said the work was primarily focussed on overburden prestrip, with a total of 13,000 tonnes of material being removed in September.

That had also enabled a further 4,000 tonnes of run-of-mine coal to be delivered to the existing wash plant stockpile.

More importantly, the board said the work had now provided access to coal from the Northern Zone of the Rukwa deposit on an ongoing basis.

Following the overburden removal and the delivery of the remaining equipment and personnel necessary to restart operations, during the second half of September the company was able to run more than 400 tonnes of coal through the wash plant, with mining and processing operations ongoing.

The production achieved during the second half of September was already similar to the whole of the first half of 2021, Edenville said.

As it had previously announced, during the third quarter Edenville received an order for up to 3,500 tonnes per month of washed coal, which it believed would result in an average monthly delivery of at least 2,000 tonnes per month.

The company's focus was to bring operations to an initial rate of processing 3,000 tonnes of washed coal per month in the current quarter, which would enable it to also satisfy an order of 600 tonnes per month of washed coal from one of its long-standing customers, which had advised Edenville that it would like to restart deliveries from November following a Covid-related forced closure during 2021.

In addition, following recent positive trial shipments, the firm said it was in the process of providing further sample sizes to a potential customer in East Africa, which had indicated a demand for 3,000 tonnes per month of washed coal on confirmation of suitability.

The existing processing facilities had a capacity of 12,500 tonnes per month, and as a result, the company said it was "confident" it would be able to satisfy any additional demand beyond the existing orders.

Further discussions had also been held with senior advisors to the Tanzanian government during September, with follow-up meetings scheduled for October.

The company said it had long held the belief that Rukwa had the potential to help address the power supply deficit within the country, and as such was "looking forward" to continuing those discussions later in the month.

In addition, as it had previously announced, the company was continuing to review additional investment and operational opportunities, following its recapitalisation earlier in the year.

"I am pleased to report operations are being ramped-up at Rukwa and I appreciate for many investors the delay has been frustrating," said chief executive officer Alistair Muir.

"However, the company elected to take a prudent approach, firstly recapitalising the company and then ensuring operations and customers were in place before committing its resources to production.

"Those familiar with the company will note that the production achieved during the second half of September is already similar to the whole of the first half of 2021, as outlined in the company's recently-released interim results to 30 June."

Muir said the company believed it was now "well-positioned" to meet its internal production targets for the end of the year.

"Moreover, as additional customers are identified, Rukwa has the potential to expand operations further to meet this increased demand.

"Given the significant uplift in global coal prices, which have more than doubled during the last 12 months, we believe the economics and outlook for Rukwa have never been better."

At 1235 BST, shares in Edenville Energy were up 1.33% at 22.8p.