EDL.L Regulatory News (EDL)

6 November 2018

EDENVILLE ENERGY PLC

("Edenville" or the "Company")

Conditional Convertible Loan Facility

Edenville Energy plc (AIM: EDL), the company developing a coal project in southwest Tanzania, is pleased to announce that it has entered into a Conditional Convertible Funding Agreement (the "Convertible Agreement") with an entity managed by the Lind Partners, LLC ("Lind") to make up to US$2,750,000 available to the Company for working capital and expansion purposes.

The Convertible Agreement splits the potential funds to be received by the Company into two amounts: an initial US$750,000 loan (the "Initial Loan") that is to be provided immediately; and a further loan of up to US$2,000,000 that may be drawn with mutual agreement between the Company and Lind (the "Further Loan").

The net proceeds of the US$750,000 Initial Loan will be used by the Company for:

· the purchase of a second loader to load the pre-screen plant and coal delivery trucks;

· the purchase of a second excavator to open up the new mining area to the north of the current excavations;

· the provision of further on-site trucks;

· site lighting to allow 24 hour per day operation;

· an additional spares package for the site plant and equipment to reduce any delays in production; and

· for general working capital purposes as the Company fulfils existing and new coal purchase orders.

Convertible Agreement Summary

· The maximum funds available to the Company under the Convertible Agreement will be US$2,750,000;

· The Initial Loan amount of US$750,000 is expected to be received by the Company in mid-November and any further drawdowns on the Further Loan will require mutual agreement;

· The Initial Loan and any amounts drawn under the Further Loan are secured against the assets of the Company by a debenture which ranks in priority over other debts which may exist within the Company. Further, subject to the Company obtaining in due course the necessary Share allotment authorities, the aggregate value of both the Initial Loan and the Further Loan will be secured against 36,000,000 ordinary shares of 0.02 pence each in the Company ("Shares"), which will be transferred or credited to the Company at the end of the term;

· The Face Value of the Initial Loan is US$900,000. Commencing on 16 February 2019 the Company will repay the Face Value in monthly instalments equal to 1/20 of the Face Value (US$45,000) ("Repayments"). At the Company's option every month the Repayments may be made in: cash (at a 3% premium to Face Value); or in Shares (priced at 90% of the average five day VWAP chosen by Lind during the 20 days before issuance ("Repayment Price")); or a combination of both;

· Correspondingly the "Further Loan" of US$2,000,000 has a Face Value of US$2,400,000 and would be repayable under the same terms as the "Initial Loan" in monthly instalments equal to 1/20 of the Face Value or in Shares, or a combination of both;

· At its sole discretion the Company has the right to buy-back the entire outstanding Face Value at any time at a 5% premium. Should the Company exercise this right, Lind will have the option to convert, subject to the Company having the necessary Share allotment authorities, up to 25% of the Face Value into Shares at the lesser of the Repayment Price or 0.29p per Share ("Conversion Price") (being 130% of the 10 day VWAP immediately prior to the Company entering into the Convertible Agreement);

· The Company will pay Lind a commitment fee of US$37,500 from the US$750,000 Initial Loan proceeds. Subject to the Company obtaining the necessary authorities to allot Shares and convertible securities, Lind will also receive options over 99,568,966 Shares exercisable for four years at the 0.29p Conversion Price;

· Lind has agreed not to hold more than 29.99% of the Company's issued Shares at any one time;

· Lind, together with its affiliates, has agreed, during the term of the Convertible Agreement, not to engage in short selling of the Company's Shares; and

· The Company has agreed to convene a General Meeting to be held no later than 16 February 2019 to seek shareholder approval for the allotment of the required Shares and convertible securities. If shareholder approval is not received for the allotment of the required Shares and convertible securities the Company will repay an additional two monthly instalments of US$45,000 at a 3% premium, for a total of 22 monthly instalments, together with an immediate payment of US$45,000. A circular convening the General Meeting will be sent to the Company's shareholders in due course.

Commenting, Rufus Short, CEO of Edenville said, "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. 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."

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

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