Edenville Energy (LON:EDL) Chief Executive Officer Rufus Short caught up with DirectorsTalk for an exclusive interview to discuss their mining licence application and provide a project overview
Q1: You’ve made two announcements this morning. Firstly, an interesting update covering further exploration plans and your mining licence application. Can you let us know a bit more about what you have already discovered at Rukwa and what this further exploration aims to achieve?
A1: With Rukwa at the moment, we’ve got approximately 170 million tonnes that we’ve proven into measured and indicated categories and this lies to the east of the Rukwa basin where our coal deposit is. This magnetic survey is going to look at extensions on to that, going over to the west and the north, so we’re basically looking for other near-surface coal measures that could be exploited economically in a similar way to the eastern side. Some of this maybe outcropping, some of it may not be but we’re looking for those nearer surface areas. From that, we’ll be able to target those areas with a suitable drill pattern and drill plan to hopefully prove up more resources. So that’s what we’re going to do in Mkomolo and Namwele areas and down in Muze area, we’ve actually got a smaller amount proven up out of that 170, there’s only 11 million tonnes we’ve actually drilled out there out of a total historical resource of 60 million tonnes. So we’re very hopeful to delineate more areas in that Muze area that we can then subsequently drill out to our resource. You ask why we would want to add any more to our resource. So we can look at expansion plans for the project, expansion plans for the existing 120 megawatt power station that we’ve got planned so it’s a long term thing but we understand that we’ve got to start it now to understand how the project will develop better.
Q2: When do you expect to start work on the exploration?
A2: It’ll be in June, say the 1st of June. We’re already gearing up our geologists in Tanzania now and we’ll be out there at the beginning of June and starting that work.
Q3: Assuming a successful outcome from the exploration, what would it mean for the project overall?
A3: Hopefully, number 1 we’d have a larger resource of hopefully good quality coal. We would be able to look at making plans for that phase 2 power station development, upgrading from the 120 megawatt that we did the feasibility on earlier in the year. It’s very much a long term but we could also find areas close to the surface that contain coal measures that would be brought into a near-term mining plan. It has many benefits to doing this work and the work is relatively low cost, compared with drilling, so we’re quite happy to go and get this done and add some value through that route.
Q4: Turning to the mining licence itself, you’re planning to submit the application by the end of June. There seems to be a number of components which need to go into that application, are you confident they can all be completed on schedule?
A4: The majority of those areas, we’ve already covered off. We’ve got our new community and responsibility statement and plan, we have our employment plan, we have our procurement plan and what we’re working on now are the mine plans and the mine designs for the project at its various stages. We’re doing this in conjunction with our consultants, SMS, in Johannesburg who have done various amounts of work for us in the past and they’re very familiar with the project. We don’t see any areas that are going to hold us up from being able to submit the application by the end of June. Tansheq, our consultants in Tanzania, are working alongside us and they manage the process along with us and are our link into Tanzania so we’re not going in blind into any areas.
Q5: Once the application has been submitted, do you have an indication of how long it will take for the licence to be granted? Are there any other processes you have to go through for it to be granted?
A5: The licence application is put in and then it’s reviewed by the mines department and the various groups within that. Questions are returned to us so there may be a few areas that get pushed backwards and forwards, that we answer questions or slightly change the plan etc. I have been advised that it’s around the 3 month time period from when the application goes in. It’s not a massive amount of time, we’re looking, hopefully, to have everything tied in for the granting of the licence by the end of September.
Q6: Once the licence has been granted, what are the options for Edenville Energy plc?
A6: Well I think we want to stay focussed very much on our core business goal which is feeding coal to the power station, there’s no doubt about that. That is where the licence comes in, as a very important component in actually pushing a project and promoting the project forward. It’s a licence to operate and any partner that is going to come in with us to build and construct and possibly operate the power plant, is going to need that surety of supply of the coal in order to pay for the costs of everything in the construction and development. We are very aware that this has to be done at some stage, it’s better to do it now. It gives a lot more clarity to the project for all the various groups we’re taking to, everybody’s very positive about this mining licence application that we’re putting in and the reasons why we’re doing it. It’s very much for the long term power station project, we do have the option as well then to start the mine up at an early stage and feed coal into the local commercial projects and areas within Tanzania and within the surrounding countries. We’re looking at those sort of options to sell coal into those customers and we will take advantage of that should it come up.
Q7: Turning to the second announcement you made today, the termination of the Darwin facility. Are we right in thinking that this has been terminated because it’s not been used for two years and you have more effective ways of financing the company?
A7: Yes, we haven’t used it for two years. It was tremendously useful when we took it out and it could be useful to us again but it’s partly a matter of housekeeping. We haven’t used it for two years, we have found alternative sources of financing, as you’ve said, and we’re looking at alternative sources in the future, it’s really time to move on from that facility now. Talking about the future, we’re very much looking for the longer term investor who is looking to see the project through to its completion.
