TIDMTLOU
RNS Number : 7879X
Tlou Energy Ltd
28 April 2023
28 April 2023
Tlou Energy Limited
("Tlou" or "the Company")
Quarterly Activities Report for the quarter ended 31 March
2023
Highlights
Ø The 66KV overhead transmission line is steadily
progressing
Ø Development of a purpose-built operations facility is
continuing
Ø Substation construction scheduled to commence
Ø Production well drilling underway with Lesedi 6
Activities
Tlou Energy continues to have three key project areas referred
to as:
-- Lesedi Project - focused on the development of gas to power
development as well as exploration and evaluation.
-- Mamba Project - focused on exploration and evaluation.
-- Boomslang Project - focused on exploration and
evaluation.
Lesedi Project
The Lesedi project is Tlou's most advanced. It is currently
developing a 10MW gas to power project. The Lesedi project area has
four Prospecting Licenses (PL) and a Production Licence which is
the key focus area for the development of Tlou's independently
certified gas reserves and contingent resources. All licences held
under this project area are valid. The table below summarises the
status of the licences:
Licence Expiry Status
Production Licence Aug-42 Current
2017/18L
-------- --------
PL001/2004 Sep-23 Current
-------- --------
PL003/2004 Sep-23 Current
-------- --------
PL035/2000 Mar- 25 Current
-------- --------
PL037/2000 Mar-25 Current
-------- --------
PL renewal applications are submitted three months prior to
expiration.
Tlou Energy's initial 10MW Power Purchase Agreement (PPA) is
part of a 100MW Request for Proposal for the development of CBM
power projects in Botswana. Tlou previously responded to a separate
request for proposal for the supply and delivery of natural gas to
the Orapa power plant in Botswana. The Company's proposal was not
successful.
Gas to Power Project
The first electricity to be generated at Lesedi, will go towards
satisfying the 10MW PPA with Botswana Power Corporation (BPC) the
national power utility. Tlou is among the first independent power
producers to secure a power purchase agreement with the
utility.
To this end, the Lesedi project currently has several parts of
the development process underway including the construction of
transmission lines, substations, a field operations facility and
generation site as well as production well drilling.
Transmission Line Construction
The Lesedi project is approximately 100km from the nearest BPC
substation connection in Serowe. In efforts to connect onto the
national grid, the Company is undergoing the construction and
installation of a 100km 66kV transmission line. This, together with
the ongoing drilling program can enable the Company to connect and
provide electricity into Botswana's power network.
The construction of the 66kV transmission line is being carried
out by Zismo Engineering Pty Ltd (Zismo) and is expected to be
completed around mid-2023. Zismo is a local engineering procurement
construction company that specialises in industrial engineering.
Progress to end of March 2023 was estimated at approximately 64%,
with planting of wooden poles almost complete, steel pole
structures now being erected and over 20km of line stringing
complete.
Substation Construction
Substations are required at either end of the transmission line,
one to tie Tlou's generators to the transmission line at Lesedi and
another to integrate the line with the existing BPC substation at
Serowe. This work will be led by South African based OptiPower, a
division of Murray & Roberts Ltd. The pre-construction and
design works have been completed and physical construction of the
substations is scheduled to begin very soon with the project
anticipated to be completed in early 2024.
Lesedi Operations Facility
Work has advanced on a purpose-built operations facility for the
initial 10MW development and to allow for project expansion
thereafter. This project is being undertaken by Tlou through its
consultant contractor African Gas Services (AGS).
Drilling and Gas production
The Lesedi 4 production pod continues to produce gas. A key
focus in the coming year is to drill more production wells for the
10MW project.
Post quarter end, the Company began drilling the Lesedi 6
production pod. Lesedi 6 is planned to be the first of a series of
new pods, funds permitting, that the Company will drill as part of
the 10MW gas to power project. Lesedi 6 will comprise one vertical
production well intersected by two lateral wells drilled
horizontally through the target reservoir section for several
hundred metres.
****
Mamba Project
The Mamba project is in the exploration and evaluation phase
with further operations required on the operating licences. It
consists of five PL's covering an area of approximately 4,500 Km(2)
. The Mamba area is situated adjacent to Lesedi. In the event of
successful drilling results at Mamba, it is envisioned that this
area would be developed as a separate project from Lesedi. The
Mamba area provides the Company with flexibility and
optionality.
The status of the Mamba licences is as follows:
Licence Expiry Status
PL 237/2014 September 2023 Current
--------------- --------
PL 238/2014 September 2023 Current
--------------- --------
PL 239/2014 September 2023 Current
--------------- --------
PL 240/2014 September 2023 Current
--------------- --------
PL 241/2014 September 2023 Current
--------------- --------
PL renewal applications are submitted three months prior to
expiration.
****
Boomslang Project
Prospecting Licence, PL011/2019 designated "Boomslang", is
approximately 1,000 Km(2) and is situated adjacent to the Company's
existing licences. To date, the Company has not carried out ground
operations in the Boomslang area. The status of the Boomslang
licence is as follows:
Licence Expiry Status
PL 011/2019 June 2024 Current
---------- --------
PL renewal applications are submitted three months prior to
expiration.
****
Cash Position
At the end of the quarter the Company had A$3.54m cash on hand
(unaudited). The aggregate value of payments to related parties and
their associates of A$339k for the quarter (shown in item 6.1 of
the attached Quarterly Cashflow Report) relates to directors'
salaries and fees (including tax and superannuation payments made
on their behalf) and office rent.
The Company is significantly advanced in relation to raising
further capital. In addition, Dr Ian Campbell (Tlou's largest
shareholder) has offered a $2m loan to the Company if required. The
exact terms of the loan are being finalised. Subject to any
regulatory approval the agreement is expected to be signed in the
coming days. Once the agreement is executed the funds will be
available to draw down immediately if necessary.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the retained EU
law version of the Market Abuse Regulation (EU) No. 596/2014 (the
"UK MAR") which is part of UK law by virtue of the European Union
(withdrawal) Act 2018. The information is disclosed in accordance
with the Company's obligations under Article 17 of the UK MAR. Upon
the publication of this announcement, this inside information is
now considered to be in the public domain.
By Authority of the Board of Directors
Mr. Anthony Gilby
Managing Director
****
For further information regarding this announcement please
contact:
Tlou Energy Limited +61 7 3040 9084
Tony Gilby, Managing Director
---------------------
Solomon Rowland, General Manager
---------------------
Grant Thornton (Nominated Adviser) +44 (0)20 7383 5100
---------------------
Harrison Clarke, Colin Aaronson, Ciara Donnelly
---------------------
Zeus Capital (UK Broker) +44 (0)20 3829 5000
---------------------
Simon Johnson
---------------------
Public Relations
---------------------
Ashley Seller +61 418 556 875
---------------------
About Tlou
Tlou is developing energy solutions in Sub-Saharan Africa
through gas-fired power and ancillary projects. The Company is
listed on the ASX (Australia), AIM (UK) and the BSE (Botswana). The
Lesedi Gas-to-Power Project ("Lesedi") is 100% owned and is the
Company's most advanced project. Tlou's competitive advantages
include the ability to drill cost effectively for gas, operational
experience and Lesedi's strategic location in relation to energy
customers. All major government approvals have been achieved.
Forward-Looking Statements
This announcement may contain certain forward-looking
statements. Actual results may differ materially from those
projected or implied in any forward-looking statements. Such
forward-looking information involves risks and uncertainties that
could significantly affect expected results. No representation is
made that any of those statements or forecasts will come to pass or
that any forecast results will be achieved. You are cautioned not
to place any reliance on such statements or forecasts. Those
forward-looking and other statements speak only as at the date of
this announcement. Save as required by any applicable law or
regulation, Tlou Energy Limited undertakes no obligation to update
any forward-looking statements.
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Name of entity
------------------------------------------------------
Tlou Energy Limited
ABN Quarter ended ("current quarter")
--------------- -----------------------------------
79 136 739 967 31 March 2023
-----------------------------------
Consolidated statement of cash Current quarter Year to date
flows (9 months)
$A'000 $A'000
1. Cash flows from operating
activities
1.1 Receipts from customers
1.2 Payments for
(a) exploration & evaluation
(b) development (114) (248)
(c) production
(d) staff costs (441) (896)
(e) administration and corporate
costs (490) (1,534)
1.3 Dividends received (see note
3)
1.4 Interest received 9 15
1.5 Interest and other costs of
finance paid
1.6 Income taxes paid
1.7 Government grants and tax
incentives
Other (provide details if
1.8 material) 181 347
---------------- -------------
Net cash from / (used in)
1.9 operating activities (855) (2,316)
----------------- ----------------------------------- ---------------- -------------
2. Cash flows from investing
activities
2.1 Payments to acquire or for:
(a) entities
(b) tenements
(c) property, plant and equipment (584) (1217)
(d) exploration & evaluation (1,627) (3,528)
(e) investments
(f) other non-current assets (1,653) (4,519)
2.2 Proceeds from the disposal
of:
(a) entities
(b) tenements
(c) property, plant and equipment
(d) investments
(e) other non-current assets
2.3 Cash flows from loans to other
entities
2.4 Dividends received (see note
3)
2.5 Other (provide details if
material)
---------------- -------------
Net cash from / (used in)
2.6 investing activities (3,864) (9,264)
----------------- ----------------------------------- ---------------- -------------
3. Cash flows from financing
activities
Proceeds from issues of equity
securities (excluding convertible
3.1 debt securities) 3,267 8,268
3.2 Proceeds from issue of convertible
debt securities
3.3 Proceeds from exercise of
options
3.4 Transaction costs related
to issues of equity securities
or convertible debt securities
3.5 Proceeds from borrowings
3.6 Repayment of borrowings
3.7 Transaction costs related
to loans and borrowings
3.8 Dividends paid
Other (provide details if
3.9 material) (4) (15)
---------------- -------------
Net cash from / (used in)
3.10 financing activities 3,263 8,253
----------------- ----------------------------------- ---------------- -------------
4. Net increase / (decrease)
in cash and cash equivalents
for the period
Cash and cash equivalents
4.1 at beginning of period 6,156 7,875
Net cash from / (used in)
operating activities (item
4.2 1.9 above) (855) (2,316)
Net cash from / (used in)
investing activities (item
4.3 2.6 above) (3,864) (9,264)
Net cash from / (used in)
financing activities (item
4.4 3.10 above) 3,263 8,253
Effect of movement in exchange
4.5 rates on cash held (1,161) (1,009)
---------------- -------------
Cash and cash equivalents
4.6 at end of period 3,540 3,540
----------------- ----------------------------------- ---------------- -------------
5. Reconciliation of cash and Current quarter Previous quarter
cash equivalents $A'000 $A'000
at the end of the quarter
(as shown in the consolidated
statement of cash flows) to
the related items in the accounts
5.1 Bank balances 3,540 6,165
5.2 Call deposits
5.3 Bank overdrafts
5.4 Other (provide details)
---------------- -----------------
Cash and cash equivalents
at end of quarter (should
5.5 equal item 4.6 above) 3,540 6,165
----------------- ------------------------------------ ---------------- -----------------
6. Payments to related parties of the entity Current quarter
and their associates $A'000
Aggregate amount of payments to related
parties and their associates included in
6.1 item 1 339
----------------
6.2 Aggregate amount of payments to related
parties and their associates included in
item 2
----------------
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly
activity report must include a description of, and an explanation
for, such payments.
7. Financing facilities Total facility Amount drawn
Note: the term "facility' amount at quarter at quarter end
includes all forms of financing end $A'000
arrangements available to $A'000
the entity. Add notes as necessary
for an understanding of the
sources of finance available
to the entity.
7.1 Loan facilities
------------------- ----------------
7.2 Credit standby arrangements
------------------- ----------------
7.3 Other (please specify)
------------------- ----------------
7.4 Total financing facilities
------------------- ----------------
7.5 Unused financing facilities available at
quarter end
----------------
7.6 Include in the box below a description of each facility
above, including the lender, interest rate, maturity date
and whether it is secured or unsecured. If any additional
financing facilities have been entered into or are proposed
to be entered into after quarter end, include a note providing
details of those facilities as well.
----------------- ----------------------------------------------------------------------------
8. Estimated cash available for future operating $A'000
activities
Net cash from / (used in) operating activities
8.1 (item 1.9) 855
8.2 (Payments for exploration & evaluation classified 1,627
as investing activities) (item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 2,481
8.2)
8.4 Cash and cash equivalents at quarter end 3,540
(item 4.6)
8.5 Unused finance facilities available at quarter -
end (item 7.5)
--------
8.6 Total available funding (item 8.4 + item 3,540
8.5)
--------
Estimated quarters of funding available
8.7 (item 8.6 divided by item 8.3) 1.4
--------
Note: if the entity has reported positive relevant outgoings
(ie a net cash inflow) in item 8.3, answer item 8.7 as
"N/A". Otherwise, a figure for the estimated quarters
of funding available must be included in item 8.7.
8.8 If item 8.7 is less than 2 quarters, please provide answers
to the following questions:
8.8.1 Does the entity expect that it will continue to
have the current level of net operating cash flows for
the time being and, if not, why not?
--------------------------------------------------------------------
Answer: Yes
--------------------------------------------------------------------
8.8.2 Has the entity taken any steps, or does it propose
to take any steps, to raise further cash to fund its operations
and, if so, what are those steps and how likely does it
believe that they will be successful?
--------------------------------------------------------------------
Answer: The Company is significantly advanced in relation
to raising further capital. In addition, Dr Ian Campbell
(Tlou's largest shareholder) has offered a $2m loan to
the Company if required. The exact terms of the loan are
being finalised. Subject to any regulatory approval the
agreement is expected to be signed in the coming days.
Once the agreement is executed the funds will be available
to draw down immediately if necessary.
--------------------------------------------------------------------
8.8.3 Does the entity expect to be able to continue its
operations and to meet its business objectives and, if
so, on what basis?
--------------------------------------------------------------------
Answer: With funds available under the loan agreement
and negotiations ongoing with investors in relation to
other potential sources of finance the Company expects
to be able to meet its objectives.
--------------------------------------------------------------------
Note: where item 8.7 is less than 2 quarters, all of
questions 8.8.1, 8.8.2 and 8.8.3 above must be answered.
----------------- --------------------------------------------------------------------
Compliance statement
1 This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Date: .....28/04/2023...............................................................
Authorised by: ....By the
Board.............................................................
(Name of body or officer authorising release - see note 4)
Notes
1. This quarterly cash flow report and the accompanying activity
report provide a basis for informing the market about the entity's
activities for the past quarter, how they have been financed and
the effect this has had on its cash position. An entity that wishes
to disclose additional information over and above the minimum
required under the Listing Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared in
accordance with Australian Accounting Standards, the definitions
in, and provisions of, AASB 6: Exploration for and Evaluation of
Mineral Resources and AASB 107: Statement of Cash Flows apply to
this report. If this quarterly cash flow report has been prepared
in accordance with other accounting standards agreed by ASX
pursuant to Listing Rule 19.11A, the corresponding equivalent
standards apply to this report.
3. Dividends received may be classified either as cash flows
from operating activities or cash flows from investing activities,
depending on the accounting policy of the entity.
4. If this report has been authorised for release to the market
by your board of directors, you can insert here: "By the board". If
it has been authorised for release to the market by a committee of
your board of directors, you can insert here: "By the [name of
board committee - eg Audit and Risk Committee]". If it has been
authorised for release to the market by a disclosure committee, you
can insert here: "By the Disclosure Committee".
5. If this report has been authorised for release to the market
by your board of directors and you wish to hold yourself out as
complying with recommendation 4.2 of the ASX Corporate Governance
Council's Corporate Governance Principles and Recommendations, the
board should have received a declaration from its CEO and CFO that,
in their opinion, the financial records of the entity have been
properly maintained, that this report complies with the appropriate
accounting standards and gives a true and fair view of the cash
flows of the entity, and that their opinion has been formed on the
basis of a sound system of risk management and internal control
which is operating effectively.
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END
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