Member Info for DevonianExile

Larry - I am a realist who weighs up the risks for and against. I would keep him – reasons as follows

First – the reason I invested so much in the first place was to see a coal power station built. If it had just been a small local miner I wouldn’t have touched it with a barge pole.

Second I do agree that RS – when it was clear that aspired targets were not going to be reached as communicated – should have been far better at advising shareholders of the issues. As I do not fully understand the issues on the ground it may well be that they were inevitable – just don’t know. So not enough to get rid in my view

Third – this is a very small AIM company with no clearly identified single larger holders, a very small BoD, and very few employees. Indeed the Chairman will almost certainly have been selected by RS (yes – that is the way it works). The BoD will be united. The employees I would suggest will be loyal to RS. The larger shareholders – whoever they are – would have acted by now if they were wanting a change. People can moan as much as you like but that is the reality

Fourth – critically – the Power Plant discussions will almost entirely depend on the confidence that TZ plc and Sinohydro have in RS. Change the dynamic at your peril.

Fifth – we have no idea where these discussions are at present. Again change at your peril.

Sixth – so if the BoD won’t change CEO what other options remain (and I suggest the entire BoD might resign if they were in a corner.). In that case there is only one option – to sell the company. But there may well be – and almost certainly is – a clause that says TZ plc have first option, have the right to select owners, or can choose to re-negotiate or novate the entire contract in the event of change of owner. Could be a SH wipe out in that case, and I suggest any potential bidder fully understands this.

Seventh – well the World Bank papers are for me more important than anything. They say that this power plant is strategically essential to the entire project. If I was a large corporate shareholder I would at this stage actually be saying “so how can we help you make this happen”

Enough from me – won’t post again until the next bit of news

Can't believe some of the rubbish being spouted here

Of course RS knew about World Bank importance (and there are references on the website)

The World Bank award is based upon the specification provided by the TZ authorities. Its all on the web - read it. Very detailed and many of the papers very recent. The project team will be fully familiar with EDL, Sinohydro and the Coal Plant plans. Probably almost on a daily basis

The Feb visit of the ministerial delegation will have been related to this. The authorities will have wanted assurance on every aspect of the plan - and as we now know they regard the local substation as strategically critical. Some dismissed that visit as a gimic - makes me wonder if they know anything at all about how a business works

RS will not have had any idea re when the WB would make their decision - which in any event is the prime concern of the TZ Government. RS clearly had shorter term problems - hence the dreaded placing

Where is Seanny? Waiting to hear his expert analysis of the situation.

RS would n

Old news? All we had before was a broad expression of unfunded desire and intent from the authorities.

Now we have a fully funded very highly specified project creating internationally accepted strategic benefits for both Zambia and Tanzania

Further similar extract from another of the base documents - dated April 2018...…………….

"Sumbawanga substation The proposed Sumbawanga Substation will be strategic as major transmission lines are expected to meet there. For example the proposed 120 – 240MW coal power plant with an associated 400kV transmission line is expected to be connected to the Sumbawanga substation as is the existing 66kV line from Zambia.

The size of the Sumbawanga substation is planned to be 13.0 Hectares (32.0 Acres) and will be constructed with one 400/220kV 120MVA power transformer, one 220/66kV 40MVA power transformer and one 66/33kV 40MVA power transformer. The rated power of transformers shall cover the demand and the expected future load increase. The proposed substation area is located at Makazi Mapya in Sumbawanga Municipal. See Google map (2017) for Sumbawanga Substation in Annex 9."

It will be interesting next week to see some of the leading lights of the anti protagonists comment. One or two seem strangely silent. But hats off to those who have commented

Thanks to Atomicrain for the World Bank link – plenty of references to Rukwa and Sumbawanga.

Try this one on page 17 of document 5 - reads very nicely. In fact I would say this is more significant than the RNS itself – it effectively says that the Sumbawanga substation is a critical element to the whole project – especially to the TZ/Zambia component.

Also clearly confirms the coal power plant link.

“Sumbawanga substation

The proposed Sumbawanga Substation will be strategic as major transmission lines are expected to meet there. For example the proposed 120 – 240MW coal power plant with an associated 400kV transmission line is expected to be connected to the Sumbawanga substation as is the existing 66kV line from Zambia. The size of the Sumbawanga substation is planned to be 140m x 200m and will be constructed with one 400/220kV 120MVA power transformer, one 220/66kV 40MVA power transformer and one 66/33kV 40MVA power transformer. The rated power of transformers shall cover the demand and the expected future load increase.”

Now if that isn’t transformational I don’t know what is

So the Friday RNS was clearly a big move in the right direction, especially for LTHs.

To add perspective the World Bank on a project of this scale will have reviewed a very detailed submission, will have deployed their own assessors and almost certainly hired a team of expert consulting engineers. Every aspect of the plan would have been reviewed in detail – and I have no doubt that EDL and Sinohydro will met with the experts many times regarding their part of it. We can now conclude that:

- TZ is deadly serious about these plans, and that coal is a major component.
- The section we are interested in is now fully endorsed by TZ, and of course EDL is the owner of the only coal asset available for this section
- Sinohydro are probably just as positive about this as EDL – they haven’t done all this work just for the hell of it

A few other observations:

First - RS and JM will have had no control over timing – but they will have been a part of the planning and review process for this section of grid.

Second – I suspect we will see an ops update this week - if only to help them manage some of you guys

Third –Sinohydro must now be close to finalising the Bankable Feasibility Study. I suspect a final element is simply assurance that a customer will exist for a power station – and Friday effectively gave that assurance. We will probably get some indication of next steps in July – but if JM/RS are currently in full contract discussions I would strongly suggest that the last thing any sensible investor will wish to do is to foolishly try to jeopardise that relationship.

Fourth – I see a few calls to sell the asset now. You must be bonkers. Any serious LTH would have always seen this as an eventual multi-bagger. Otherwise why on earth would you have invested in it? The MCap is currently around £5 million for a potential realisable asset of 170 million tons of coal. If this all goes forward the NPV and the ROI numbers would be truly spectacular – but to get those numbers need a whole lot of other value creating stuff needs to happen first. Including of course the company achieving their own publicly stated break-even production requirements.

There are few things I am certain of here - but I am 100% certain that if a director is selling shares today it will be RNSd the next day. End of.

I asked Zaza at the meeting - he said a further visit opportunity would be provided late summer.

Gaf - so every share you write about is a dog - and in your words a complete disaster. You must have a very perverse sense of investment strategy. More likely you are not invested but have short positions on all of them. Be interested to know whether I am right or wrong. And as for the comparison with BHR a while back - who did go under - there are a stack of differences . I saw the writing on the wall long before it went down the tubes and got out more or less intact. You will no doubt recall the high overheads, the debt, the problems to market and the poor relationships with government and suppliers, the endless delays on the hugely expensive railway project etc etc. This feels very different - a stack of challenges yes, and some definitely self inflicted - but quite close in fact to getting things moving.

Afternoon folks Well for those who missed it ii has decided to help out those poor folks at TSB and on the Railways. Just when they thought life couldn't get any worse ii show that it definitely can. Anyway a few random thoughts. First on YA. For me the key issue here is about control. I am sure we will still get some equity exchanges in the future - particularly as cash flow will take time to evolve and other priorities will also clearly exist. However Zaza now has more options on both timing and source of finance - and he will surely want to try to manage cash for equity when the price is right, not when YA demand it. Big difference, and for him getting YA to sign would have been critical whilst in a lowish price range (because when positive news does come he won't want it watered down by sword of YA hanging over him). Second - how about this theory to explain at least some of the cancelled trades. Need to note that there seem to be different arrangements in place - some are at a slightly different price - others match the initial price even if the cancellation is covered by quite a few transactions. On Thursday and Friday some transactions showed a range of prices - but the total still balanced out re the overall sum. So imagine you are a senior player in a local vendor company - the company having taken shares instead of cash some time back. You are still close to the action and have probably done OK so far, but you know there is more to come. So it might make good sense, regarding future access, to transfer those shares (or at least some of them) to an individual rather than the company, in exchange of course for cash. You talk to your broker who can either do it for a very small commission payment - or even a flat fee (which of course is paid separately.). He then uses his favoured MM to arrange the deal. Hence a transfer to one or more people, all carefully managed over several hours, and at very small margins. I might be wide of the mark but in the absence of anything better it could explain some of the patterns seen.

Puddy - in 2016 and in 2017 no director was paid for their role as a director. However there was a small and a large "consultancy" payment (which I assume went to SN. For 2017 - well we will find out in a few weeks time but I assume the same again In the accounts there is also a debt line for upaid salaries - which I assume is for directors and perhaps a few of the more senior guys when the cash was very tight. I assume these sums will be repaid once cash is coming in and/or some sort of deal gets done The directors (mainly SN/ZM) have put around between $30 and $35 million into this enterprise over the years in share capital.

I refrained from commenting yesterday - some (not all) of the exchanges resembled a football club blog rather than an investors exchange. My thoughts, as a pretty serious LTH: - the BoD/RS/JM/Nomad clearly need to learn from this. The early RNSs were based on ambitions and expectations regarding production (which is fine) but as soon as they encountered problems they should have updated and managed the expectations they had set. The more sensible amongst us would have grimaced a little but would have accepted the reset and the remedial action required. And this would have made the placing much more understandable. - This is a very small company with a very small BoD. It needs a well paid CEO, but RS needs to better understand SH communications here. Comments around his sales skills are poppy cock - you don't know. The issue we now understand has been consistent production - and a small company operating in places like Tanzania can only run its sales activity via local agents. That is the way it works in Africa - and indeed most of the World. (And I have been there on this stuff) - Some positives for me are that the cash position at year end was pretty much where I expected, that the asset register has increased as expected and that generally the finances were in order. Most importantly they are now addressing the shortfalls but I would still like more information on the nature of the capital spend. - The biggest positive is that my reason for being a LTH still seems to be intact. Ie the coal to power project. For that prize I will be a very patient LTH - MCap at �4m seems absurdly low now - considerably less than the tangible assets. Clear evidence on sorting out the supply and sales issues will surely change this - and it is now about restoration of positive sentiment - Talk of getting rid of the Bod/RS/JM etc is useless tosh. Who would take over - are you guys going to form a consortium and put the cash together? And do you for one moment understand where we are on the sensitive and complex relationships with government and Sinohydro? The share base is hugely spread and virtually unidentifiable - so a very small company and a very small BoD is what you have invested in. There are no others to turn to - you either stick with it and try to positively influence or quietly retreat - that is the nature of such small businesses. Finally I saw some guff about comparisons with BHR. Well I was in BHR but saw the writing on the wall and exited roughly intact before it went down the tubes. They were totally dependent on a railway link that was hugely costly - and had little government interface, plus a shed load of debt and overhead. EDL has a different set of issues, but critically is getting coal out of the ground, has little real debt, has low overhead, has a route to market and most importantly of all has government and partner support for a major power project. Wholly different Enough from me

As the share price drifts down a few observations from myself. First, the recent �shareholder group� activities following the placing will have simply created a �Fortress Edenville� mentality with the very small BoD united in approach. They will have gone into lock down � and will stay like that until they see the opportunity to regain control of the news agenda. And a secondary impact has been to spook large numbers of PI holders to offload. I am pretty sure that this accounts for most of the recent sells as personal risk levels are re-based. The real questions we should be asking surround the �740K placing. Why so sudden, why the low placing price, why the broker change and what might the reasons be -as the RNS was so thin on the rationale? �740K is quite substantial for a company this size � and unlike the previous large placing there was no real detail on the nature of the capital spend. But the placing price suggests this sum was needed relatively quickly. The lack of commentary was actually quite unusual compared to previous RNSs, and of course they used a different broker, leading to a change of broker. Which suggests a largely new set of investors to me � which the previous broker was unable to secure. Some of the background may indeed have simply been down to production teething problems, but I really struggle to see why this couldn�t have been communicated in more detail. The BoD would have known that the placing would have caused a furore � so why not just state that this emerging junior producer had encountered unforeseen problems. A lot of investors would have grimaced and grunted - but would have accepted the situation as not being unusual with this type of enterprise. So perhaps there is another reason? And one that couldn�t be easily communicated? The recently revised presentation now says: �The Mine is currently producing up to 4,000t per month of coal for sale and the Company is seeking to increase production up to 10,000t per month in the near term. At the higher production rate, Edenville expects the mine to generate sufficient cash flow to cover corporate overheads and contribute to advancing the coal-to-power project, reducing future dilution for investors. The Feasibility Study on a 120MW coal-to-power project returned an NPV10 of US$252m (�176m) and IRR of 20%. Edenville is examining the potential to increase power production to 300MW, potentially improving these robust economics.� I strongly suspect that behind the scenes the Energy Ministry and Sinohydro � have simply told EDL to speed up the capacity proving � perhaps with some ultimatums regarding share of future revenue streams � hence the placing. Whatever � this investor will hold and let the BoD get on with it. Albeit urging them to be a little more transparent.

As one or two might recall I occasionally post, and currently have around 10 million shares. Have been here for around 5-6 years - albeit not always at these levels. I also have experience in a couple of company's of trying to engage with BoDs and to influence approach - either on behalf of just myself or others. As disappointed as I was with last weeks placing - I have not sold and as things stand remain a holder. My disappointment was in part the price - but more importantly the lack of adequate commentary that might have explained it. A couple of bits of advice (and I have absolutely no intention of getting involved here). First any resolution to change/challenge the CEO/BOD via an EGM is in my view a complete waste of time - unless the larger shareholders feel the same way. And if they do they will already be doing something about it. Plus most shareholders rarely vote on anything, and mobilising the larger shareholders almost always blots out small PI groupings. In fact what often happens in these circumstances is that the BoD become even more defensive/secretive, backed by the larger shareholders, who will of course always get better insight than we do. Second - if RS is engaged in delicate conversations with suppliers or government, or indeed Synohydro, then a change of leadership could be the kiss of death. We simply don't know what is going on behind the scenes - but be assured that larger shareholders will be asking good questions. And I do wonder if the placing was in fact necessary to get over some obstacles that it is perhaps best not to speculate about. Third - in my experience � it might be better to create an informal shareholder group and through a couple of respected and less emotive holders to attempt to have an off record dialogue with Rufus and Co. It could be in confidence - with the output simply to engage and try to understand some of the background. Feedback would have to accepted as not material � but what we want is a) confidence that the right agenda is being followed, and b) the Bod to engage more frequently and more comprehensively on the underlying issues. Might sound a bit soft - but why not try it? Finally - this is a very small company and despite what some say RS is not highly paid for working in this environment/role. Might be a lot of money versus most PI earnings - but if you want to find a new CEO for a small micro-cap operating in this part of the world do not underestimate a) the removal risk and b) the difficulty in replacing with the right set of skills. Even large companies have problems in this environment. Me - well the choice is do you sell up and crystallise the loss, or hold firm? I have very clearly chosen the latter - albeit putting in the bottom drawer for now. And I assume that the latest batch of shares have gone to those who do have more insight and do have a reasonable level of confidence. Over and out.

Whilst I understand the interest here I struggle to see why it is such a concern. Most of the companies I invest in leave the accounts to pretty much the deadline date - and for PIP this is the end of the year for the year ended June 30th 2017. Last year they reported on November 16th. AIM Rule 19 says " An AIM company must publish annual audited accounts which must be sent to its shareholders without delay and in any event not later than six months after the end of the financial year to which they relate". As I said I am used to waiting till virtually deadline day with many of my investments. We know there will be an AGM in December so happy to wait.