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Corporate Update

Edenville Energy Plc (AIM: EDL), the AIM quoted company developing the Rukwa coal project in southwest Tanzania, provides an update on recent corporate developments, the current mining operations at its flagship Rukwa Coal Project (the “Project”) and the Company’s current financial position.

Current Operations

Following the refinancing of the Company, in particular through the fund raisings undertaken in April and September 2019, significant investments have been made in plant and equipment at the Project site, including wash plant upgrades and the purchase of the Company’s own trucks in August 2019. The Company has also been able to begin mining at the new Northern Area, which has yielded near surface and thicker coal zones (up to 40m thick versus previous thicknesses of 3.5m) and also higher energy value coal than that previously mined. However, since the announcement of the interim results for the six months to 30 June 2019 on 27 September 2019, further operational progress has been limited, primarily due to working capital constraints and the onset of the rainy season at the beginning of November.

Consequently, whilst the Directors believe the Project currently has an estimated production capacity of approximately 12,000 tonnes of washed product per month, recent production levels have been significantly lower than this with 820 tonnes of washed coal produced from 21 September 2019 to the present time. During this period the Company sold 1,021 tonnes of washed coal, which included some coal from the stockpile at the Project. This was sufficient to satisfy a long-term customer. In addition to this, nearly 30,000 tonnes of overburden were stripped during September and October, providing ready access to the coal zone for production.

During this period the Company has continued to identify new potential customers who, combined with existing customers, cumulatively have demand in excess of the current capacity, but in order to meet this demand and expand operations the Company will require additional working capital.

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. The repayment holiday ended in August 2019 and all cash payments under the repayment schedule have been made to Lind to date. Consequently a balance of US$835,760 now remains outstanding under the Funding Agreement, repayable on a monthly basis at an amount of US$50,637.38 per month.

Loan Agreement and Current Financial Position

In order to satisfy the Company’s immediate working capital requirements, the Company has entered into an agreement with a private lender to secure a non-convertible £100,000 loan (the “Loan”). The Loan carries a fixed coupon rate of 20% per annum and must be repaid on or before 25 February 2020. Including the Loan funds, the Company currently has cash resources of approximately US$190,000. Whilst this will provide the Company with sufficient funds for its immediate needs and enable Edenville to satisfy orders from an existing customer, it does not provide sufficient working capital to enable the Project to operate at its planned capacity, nor to continue the 2020 monthly payments to Lind in cash.

To address this, the Company is currently in discussions relating to an investment at the Project level with a potential strategic investor with experience in Tanzania and the neighbouring region. A further update on this will be made as soon as practicable. Whilst these discussions are at an advanced stage and the Directors believe they will reach a Heads of Terms with the investor in December, the Board cannot guarantee discussions will result in a positive outcome for the Company.

Moreover, to help ensure the Company has sufficient time to close this transaction or source additional funds, either at Project or Company level, the Directors have implemented certain cost cutting measures in order to be able to deploy available capital to the Project. As part of this, the Directors either have not taken their salaries or have drawn reduced salaries since September 2019. In the event the Company is unable to secure project level funding by early Q1 2020, Edenville will require a further capital injection. Following conversations with its broker and major shareholders, who recently participated in the September 2019 equity issue at 0.05p per share, the Directors believe sourcing this capital would be achievable.

Alistair Muir, Chief Executive Officer of Edenville, commented: “Since my appointment as the Company’s new Chief Executive Officer on 1 November 2019 I have undertaken a thorough review of the Company and the Rukwa Coal Project, including spending the majority of my time at site where I met both existing and potential customers. I am encouraged by what I have seen at the Project site and believe in Edenville’s potential.

“We believe Edenville can meet the demands for coal in the regional market. In the long term I believe the Project has the potential to supply in excess of 25,000 tonnes per month to a range of industries, although the current plant capacity restricts us to being able to produce a maximum of approximately 12,000 tonnes per month of washed product. Whilst the current working capital situation is hampering our ability to reach these levels, I am optimistic that all is in place to achieve these production levels in the medium to long term once the working capital situation has been addressed. Our desire is to address the shortfall with a capital injection at the Project level if possible.

“Assuming we are able to source the requisite funds, our aim still remains to become cash flow positive from operations during 2020. I look forward to providing further updates as soon as practicable.”

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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