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£0.7m Placing, Corporate Update and Board Changes

Edenville Energy Plc (AIM: EDL), the AIM quoted company developing the Rukwa coal project in southwest Tanzania, is pleased to announce that the Company has now completed its previously outlined fundraising initiative, thereby securing the necessary working capital to meet the current contracted production demands of up to 12,000 tonnes of washed coal per month from the Company’s flagship Rukwa Coal Project (“Rukwa” or the “Project”).

Placing and Proposed Loan

The Company has raised £700,000 (before expenses) by way of a placing of 1,750,000,000 new ordinary shares of 0.02p each in the Company (“Ordinary Shares”) at a placing price of 0.04p per Ordinary Share (the “Placing Shares”) (the “Placing Price”) with existing stakeholders through Brandon Hill Capital Limited (“Brandon Hill”) (the “Placing”). In addition, subscribers in the Placing will be issued with one warrant for every two Placing Shares subscribed for (the “Warrants”). The Warrants have a 2-year life and will expire on 23 January 2022 and have an exercise price of 0.06p per Ordinary Share.

The issue and allotment of the Placing Shares will utilise the majority of the Company’s existing share authorities. As such, the Company will shortly be calling a General Meeting in order to seek renewal of share authorities in order to enable any Warrant holder to exercise their Warrants. Specific details of the General Meeting will be announced in due course.

On 29 November 2019 the Company announced it had entered into an agreement with a private lender, Brian McMaster, regarding a non-convertible £100,000 loan (the “November 2019 Loan”). The November 2019 Loan carries a fixed coupon rate of 20% per annum and must be repaid on or before 25 February 2020. Brian McMaster has agreed to subscribe for 750,000,000 Placing Shares, representing a cash subscription of £300,000 as part of the Placing on the assumption that the Company will repay the £120,000 that he is owed pursuant to the terms of the November 2019 Loan on or before 25 February 2020.

To ensure sufficient access to working capital if required, the Company has been advised by Brian McMaster that, in addition to his direct equity of subscription for £300K, he would be willing to provide a loan of £300K to the Company (the “Proposed Loan”). The Proposed Loan is subject to the completion of formal documentation and the consent of Lind Partners LLC. The terms of the Proposed Loan are as expected to be as follows:

· Funds under the Proposed Loan are callable at Edenville’s request.

· There would be no warrants or arrangement fees attached to the Proposed Loan or penalties ascribed in the event no drawdown is required by the Company.

· Any funds drawn under the Proposed Loan will incur interest at a rate of 12% per annum, which is repayable in full, along with any drawn principal, upon the one year anniversary of the initial drawdown.

A further announcement will be made in due course.

Background to Capital Raise

During 2019, Edenville funded and undertook several operational initiatives at Rukwa designed to expand production capacity and improve the Project’s economic potential. These included significant upgrades to the wash plant and the opening up of the Northern Area for mining (the “Northern Area”), which has subsequently proven to have both a better quality of coal from previously mined areas and also better recoveries. Despite these improvements the lack of working capital has prevented the Project from operating effectively and has materially impacted production, with only a de minimis level of washed coal being produced between 30 November 2019 and 22 January 2020.

A sustained marketing initiative took place in Q4 2019, following the appointment of Alistair Muir as the Company’s new CEO, coupled with in pit and stockpile sampling highlighting the improved quality of Rukwa coal from the Northern Area. This was well received by existing and potential customers, culminating in the Company entering into two new long-term contracts, as announced on 11 December 2019, to supply a combined 9,000 tonnes of washed coal per month to industrial customers in Rwanda and Uganda, complimenting the Company’s existing coal supply contracts.

With the proceeds of the Placing and the additional support of Brian McMaster’s Proposed Loan, the Directors believe Edenville is now able to address the shortfall in working capital and that the Company is in a position to begin supplying these coal contracts. In structuring the fundraising, the Company has sought to minimise dilution by including a standby debt component, which will only be utilised if required to bridge any additional working capital requirements as the Project ramps up its production to satisfy the current contracted demand for Rukwa washed coal, which is outlined below.

Current Coal Contacts

As announced on 11 December 2019, Edenville entered into a contract to supply up to 6,000 tonnes of washed coal per month with Tara Group Ltd and a separate contract for up to 3,000 tonnes of washed coal per month with Springwood Capital Ltd. These contracts compliment a standing order for 500 tonnes per month from a Tanzanian industrial user in Arusha and an up to 2,500 tonnes per month order from a cement manufacturer located near Dar Es Salaam in Tanzania.

In addition, the Company has received enquiries from a potential customer in the Democratic Republic of the Congo for the supply of washed coal to a cement works on Lake Tanganyika. The Company is also engaged in discussions with several other potential purchasers of Rukwa coal and although no assurances can be given that long-term contracts will materialise, the Directors are confident that once additional stockpiles are at site, new supply contracts should be forthcoming.

Funding Agreement with Lind

As previously announced, it is the current intention of the Company to repay its outstanding funding agreement (the “Funding Agreement”) with Lind Partners LLC (“Lind”), that was first announced on 6 November 2018 and further detailed in the Company’s announcement of 29 April 2019, in cash. Since the repayment holiday ended in August 2019 all cash payments under the repayment schedule have been made to Lind to date. Consequently, a balance of US$737,437.48 now remains outstanding under the Funding Agreement, repayable on a monthly basis at an amount of US$50,637.38 per month.

Rwandan Power Station Tender

The Company is pleased to advise that its subsidiary Edenville International (Tanzania) Limited recently lodged a tender for the supply of 12,000 tonnes of washed coal to a Rwandan power station. The Company believes it is geographically well placed to provide coal at a competitive price compared to other potential suppliers and is awaiting the outcome of this tender. Further announcements regarding this tender will be made as appropriate.

Proposed Board Changes

The Company announces that Rufus Short has indicated his desire to step down from his current role as Non-Executive Director before 31 March 2020. The Company would like to thank Rufus for his service to the Company during exceedingly difficult times in global markets, particularly for junior mining companies.

The Company intends to appoint a new Non-Executive Director to coincide with Mr Short stepping down as a Director and will make a further announcement in due course.

Edenville CEO, Alistair Muir, commented:

“Firstly, I would like to thank all our existing shareholders for their patience and support. Whilst I have only been involved with the Company for a comparatively short space of time, I am encouraged by what I have seen at site and during the various discussions with potential customers. There is a clear demand for Rukwa coal and my energies are focused on translating this interest into sales and cashflow for Edenville.

“Following the work undertaken at site last year, the coal seams have been opened up in the Northern Area and the wash plant has been upgraded to improve efficiencies. Now that the working capital issues have been addressed, I believe Edenville is well placed to be cash flow positive this year, as we start to deliver on our contracted orders. To ensure this happens I will be spending much of the next few months in Tanzania to both monitor the ramp up of the Project, whilst overseeing the proposed consolidation and expansion of our customer base.

“Moreover, we are also looking at development scenarios that will enable us to further increase production beyond the current capacity of the wash plant, which we estimate is in the order of 12,500 tonnes per month (assuming a plant availability of 66%), in the event some of the targeted additional contracts come to fruition.”

Admission to AIM

Application will be made for the admission of the Placing Shares to trading on AIM (“Admission”). Admission is expected to occur at 8am on or around 29 January 2020. The Placing Shares will rank pari passu with the existing Ordinary Shares.

Significant Shareholder Participation

Brandon Hill and its executives, namely Neal Griffith and Oliver Stansfield (collectively the “Brandon Hill Group”), who currently hold 1,201,000,500 Ordinary Shares representing 23.7% of the Company’s issued share capital, have agreed to subscribe for, in aggregate, 225,000,000 Placing Shares representing a cash subscription of £90,000. Upon Admission of the Placing Shares, the Brandon Hill Group’s revised holding of 1,426,000,500 Ordinary Shares will represent 20.9% of the Company’s enlarged share capital.

Pitchcroft Capital Limited and its executives, namely Alexander Fullard, William Orgee and David Thomas (collectively the “Pitchcroft Group”), who currently hold 1,053,959,224 Ordinary Shares representing 20.8% of the Company’s issued share capital, have agreed to subscribe for, in aggregate, 150,000,00 Placing Shares representing a cash subscription of £60,000. Upon Admission of the Placing Shares, the Pitchcroft Group’s revised holding of 1,203,959,224 Ordinary Shares will represent 17.7% of the Company’s enlarged share capital.

Brian McMaster, the provider of the November 2019 Loan and the Proposed Loan, has also agreed to subscribe for 750,000,000 Placing Shares, representing a cash subscription of £300,000. Upon Admission of the Placing Shares Brian McMaster’s holding of 750,000,000 Ordinary Shares will represent 11.0% of the Company’s enlarged share capital.

John Story, who currently has a beneficial interest in 250,000,000 Ordinary Shares has agreed to subscribe for 625,000,000 Placing Shares, representing a cash subscription of £250,000. Upon Admission of the Placing Shares, John Story’s holding of 875,000,000 Ordinary Shares will represent 12.8% of the Company’s enlarged share capital.

Related Party Transaction

Both the Brandon Hill Group and the Pitchcroft Group are existing substantial shareholders of the Company (the “Related Parties”). Accordingly, the participation of the Related Parties in the Placing constitutes a related party transaction pursuant to Rule 13 of the AIM Rules for Companies.

The Directors, having consulted with the Company’s nominated adviser, consider that the terms of the Related Parties’ participation in the Placing are fair and reasonable insofar as Edenville’s shareholders are concerned.

Total Voting Rights

Following Admission, the Company will have 6,812,241,762 Ordinary Shares in issue, each share carrying the right to one vote. The Company does not hold any Ordinary Shares in treasury. The above figure of 6,812,241,762 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority’s Disclosure and Transparency Rules.

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

For further information please contact:

Edenville Energy Plc

Jeff Malaihollo – Chairman

Alistair Muir – CEO

+44 (0) 20 3934 6630

Strand Hanson Limited

(Financial and Nominated Adviser)

James Harris

Rory Murphy

+44 (0) 20 7409 3494

IFC Advisory Limited

(Financial PR and IR)

Tim Metcalfe

Florence Chandler

+44 (0) 20 3934 6630

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