Edenville flags delay to Rukwa handover as it faces cash crisis
By Josh White
Date: Friday 27 Nov 2020
(Sharecast News) - Edenville Energy, which operates the Rukwa Coal Project in southwest Tanzania, updated the market on its operations on Friday, reporting that the mine was continuing to fulfil its pre-purchase orders.
The AIM-traded firm said it was still expecting to hand over operations at Rukwa to its strategic partner Infrastructure and Logistics Tanzania (ILTL) "shortly", under the terms of the previously-announced coal mining agreement between the two parties.
Both Edenville and ILTL had expected this transition to take place before the end of November, but as a result of ongoing administrative issues relating to work permits between the Tanzanian government and ILTL, primarily due to a backlog caused by Covid-19, the transition had been delayed.
"Both parties expect these administrative issues to be resolved in the short term and a further announcement regarding the new commencement date will be made as soon as it has been confirmed," the Edenville board said in its statement.
The company also updated shareholders on its outstanding funding agreement with Lind Partners, which was first announced on 6 November 2018 and further detailed in a number of announcements between then and October this year.
As it said on 6 October, Edenville said Lind initially requested the company repay the total outstanding balance of the funding agreement, which was currently $0.58m, by 30 November.
The firm then entered discussions with Lind regarding the repayment terms of the agreement.
"The directors are confident that mutually agreeable terms can be agreed with Lind regarding the funding agreement, however, at this current time it is premature to reach any conclusions," the board said.
"There are no assurances that these discussions will result in a favourable outcome for Edenville."
Should Edenville be unable to agree mutually agreeable terms with Lind, there could be material uncertainty regarding the company's ability to continue as a going concern unless it raised further capital, the directors warned.
"The company has a number of supportive significant shareholders whom the directors believe would continue to support the company in such an event.
"The directors are working towards reaching a conclusion with Lind with regards to the funding agreement."
Edenville said a further announcement regarding the status of the funding agreement would be made as soon as it could.
At 1142 GMT, shares in Edenville Energy were down 10.77% at 0.03p.
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