Tlou Energy reports recent progress with Botswana projects

(Sharecast News) - Sub-Saharan Africa-focussed power project developer Tlou Energy updated the market on its three primary projects in Botswana on Monday, being the Lesedi gas and solar power and hydrogen production project and the Mamba and Boomslang exploration and evaluation projects.
The AIM-traded firm said at the Lesedi project area, all approvals were in place to allow development to begin.

It said the first phase would be a 10MW power project with electricity to be sold to Botswana Power Corporation.

Once in full production, 10MW of generation could provide annual revenue of around $10m.

The company said the key stages of development there were the construction and installation of an overhead transmission line and substations to connect Lesedi to the electricity grid, followed by the installation of generation assets, commissioning and testing, and the sale of first power.

"During the quarter, the company agreed the terms including the interest rate for a facility to fund initial development of the Lesedi project," the board said in its statement.

"Legal agreements in relation to this proposal are being prepared.

"These agreements will need to be finalised and signed before the package becomes binding."

At the Mamba project area, Tlou said the project consists of five prospecting licences covering an area of about 4,500 square kilometres, situated adjacent to Lesedi.

In the event of a gas field development by Tlou, the Mamba area would provide the company with "flexibility and optionality", the firm said.

"The Mamba project is in the exploration and evaluation phase with further operations required on these licences," the board said.

"The next stage of exploration is likely to be core hole drilling.

"Positive results from operations at Mamba could expand the reserves footprint across Tlou's project areas."

In the event of successful development at Mamba, it envisioned that the area would be developed as a separate project from Lesedi, again with the potential for gas-fired power, solar power and hydrogen production.

Finally at the Boomslang project area, Tlou said the single prospecting licence was about 1,000 square kilometres, situated adjacent to the company's existing licences.

"To date, the company has not carried out ground operations in the Boomslang area, having only received environmental approval to commence exploration activities earlier this year."

Tlou said its hydrogen plans were also gathering pace, reporting that during the quarter it signed a binding heads of agreement with Synergen Met, a hydrogen developer applying plasma technology intellectual property to convert methane to hydrogen.

The agreement would involve the construction and commissioning of a hydrogen and solid carbon prototype to be installed at the Lesedi project.

"Design work has commenced on the prototype unit which is proposed to produce hydrogen and solid carbon using Tlou's existing gas flows at Lesedi.

"The prototype will be constructed and tested in Queensland prior to transportation to Tlou's Lesedi project in 2022."

Since the quarter ended, the firm also announced that a 10MW power purchase agreement was signed between itself and Botswana Power Corporation.

"Under the terms of the agreement, BPC will purchase up to 10MW of power generated at Tlou's Lesedi power project.

"The power purchase agreement is for an initial five-year term, with the 10MW project being the first phase of Tlou's planned power project expansion."

At 1241 BST, shares in Tlou Energy were flat at 3p.