REG - Tlou Energy Ltd - Interim Results
09/03/2023 07:00
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RNS Number : 3684S Tlou Energy Ltd 09 March 2023
9 March 2023
Tlou Energy Limited
("Tlou" or "the Company")
Interim Results
The Company is pleased to announce its interim results for the six months
ended 31 December 2022. The report is available on the Company's website:
tlouenergy.com/reports
The Company has progressed steadily over the past six months and remains on
track to get gas fired power into the grid in Botswana.
Highlights:
· Construction of the transmission line to connect Tlou's Lesedi
gas-to-power project to the electricity grid has continued and is now
approximately 50% complete.
· Construction of the new operations facility including workshops,
maintenance facilities, accommodation and associated infrastructure for the
first phase of development is nearing completion.
· Engineering and design of the next production well has been completed
with drilling set to begin in March 2023.
· Gas production continues at the Lesedi 4 production well.
· ~AUD $5m was raised during the reporting period from a new strategic
investor and currently Tlou's largest shareholder.
Tlou's Managing Director, Mr Tony Gilby commented, "The past six months has
seen good progress at the Lesedi Power Project. The transmission line work is
going well, substation construction will continue during the year, the
generation site is coming together and further production well drilling is set
to commence. We remain focused on delivering first power and earning first
revenue for the Company as soon as possible."
****
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.
Directors' report
The Directors present their report, together with the financial statements, on
the consolidated entity (referred to hereafter as the 'consolidated entity' or
the 'Group') consisting of Tlou Energy Limited (referred to hereafter as the
'Company' or "Tlou") and the entities it controlled at 31 December 2022.
Directors
The names of the directors who held office at any time during the half-year
and up to the date of this report are:
Martin McIver Non-Executive Chairman
Anthony Gilby Managing Director & Chief Executive Officer
Gabaake Gabaake Executive Director
Colm Cloonan Finance Director
Hugh Swire Non-Executive Director
Directors have been in office since the start of the half-year to the date of
this report unless otherwise stated.
Principal Activities
The principal activity of the consolidated entity is to develop power
solutions in Sub-Saharan Africa through Coalbed Methane (CBM) gas-fired power,
solar power, and hydrogen projects. No revenue from these activities has been
earned to date, as the consolidated entity is still in the exploration and
evaluation or pre-development stage.
There have been no significant changes in the nature of the group's principal
activities during the half-year.
Review and results of operations
The loss for the half-year after income tax amounted to $2,245,259 (December
2021 loss $1,271,339). Information on operations and results during the period
are set out below.
Lesedi Project
The Lesedi Project consists of four Prospecting Licences (PL) and a Production
Licence. The first stage of development is a 10MW power generation facility
which will be located in the Company's Production Licence area.
The status of the Lesedi licences is as follows:
Licence Expiry Status
Production Licence 2017/18L August 2042 Current
PL 001/2004 September 2023 Current
PL 003/2004 September 2023 Current
PL 035/2000 March 2025 Current
PL 037/2000 March 2025 Current
Lesedi Gas-to-Power project
The Company is working on bringing the Lesedi 10MW gas to power project into
production as quickly as possible and, subject to available funding, Tlou
plans to rapidly expand to 25MW and beyond. The first electricity generated at
the Lesedi project will be sold under a 10MW Power Purchase Agreement (PPA)
with Botswana Power Corporation (BPC), the national power utility in Botswana.
Once in full production 10MW of generation could provide annual revenue
equivalent to approximately US$10m. The project is moving towards development
with the construction of transmission lines, substations as well as the field
operations facility and generation site.
Transmission Line Construction
To connect to Botswana's power network, a 100 km transmission line is being
built from the Lesedi project to join the grid near the town of Serowe.
Construction is being done by Zismo Engineering Pty Ltd (Zismo) with progress
at the end of February 2023 of approximately 50%. The line is expected to be
completed around 3Q23.
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
completed by South African based OptiPower, a division of Murray & Roberts
Ltd. This work is expected to be completed around late 2023 or early 2024.
Lesedi Operations Facility
Work is continuing on a purpose-built operations facility for the initial 10MW
development and to allow for rapid project expansion thereafter. This project
is being undertaken by Tlou through its consultant contractor African Gas
Services (AGS) and it is expected to be completed during 2023. AGS is also
undertaking the management and construction of the power plant and gas
gathering network.
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. Methane
production of approximately 220-250 mcfd (thousand cubic feet per day) is
expected to be required for 1MW of power generation. Work has commenced in
preparation for the Company's next production pod, Lesedi 6, with drilling
expected to commence in March 2023. This includes drilling of a core-hole to
assess coal depth followed by the vertical production well and two lateral
wells. Once drilling is complete, the pod will be flushed and then commence
dewatering and gas production. Thereafter, drilling of more production pods is
planned.
Mamba Project
The Mamba project 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 a
gas field development by Tlou, the Mamba area provides the Company with
flexibility and optionality.
The Mamba project is in the exploration and evaluation phase with further
operations required on these licences. The next stage of operations will be
core-hole drilling to assess coal qualities in different areas. 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 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
Boomslang Project
Prospecting Licence, PL011/2019 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, but core-hole drilling is
being planned to assess coal qualities in the permit area.
The status of the Boomslang licence is as follows:
Licence Expiry Status
PL 011/2019 June 2024 Current
Significant changes in the state of affairs
During the half-year ended 31 December 2022, there were no other significant
changes to the state of affairs of the consolidated entity other than those
stated above and disclosed in the financial report and notes thereof.
Matters subsequent to the end of the half-year
In January 2023, the Company issued 87,653,278 ordinary shares at $0.035 per
share. The total issue share capital following issue of these shares is
830,715,710. Other than the matters discussed in this report, there has not
arisen in the interval between the end of the half-year and the date of this
report any item, transaction or event of a material and unusual nature likely,
in the opinion of the directors, to affect significantly the operations of the
group, the results of those operations or the state of affairs of the group in
subsequent financial periods.
Likely developments and expected results of operations
The Company has drilled development wells in the Lesedi project area which
have produced CBM gas. These wells were designed to achieve enhanced gas flow
rates in the area proposed for the Company's initial project development. The
gas flow rates from these wells are vitally important to assess the viability
of the Lesedi project and the Company is yet to confirm commercial gas flow
rates and there is no guarantee that the required rates can or will be
achieved. In addition, further wells flowing commercial gas volumes will be
required to produce sufficient gas for the planned Lesedi project.
The Company is advancing plans to develop ancillary projects in addition to
the gas-fired power project. These projects may be subject to regulatory
approvals. No guarantee can be given in relation to the results of the
Company's operations, gas flow rates, regulatory approvals being granted or
the ability to secure the funds required to progress all or any of the
Company's existing or planned operations.
The Company is subject to risks which may have a material adverse effect on
operating and financial performance. Tlou's Risk Management Policy can be
found on the Company's website. It is not possible to identify every risk that
could affect the business or shareholders. Any actions taken to mitigate these
risks cannot provide complete assurance that a risk will not materialise or
have a material adverse effect on the business, strategies, assets or
performance of the Company. A list of risks currently considered material and
mitigation strategies are set out below. This is not an exhaustive list and
risks are outlined in no particular order.
Risk Description Mitigation
Funding The Company will need to raise additional debt and/or equity funds to support The Company has operated in Botswana for over a decade with extensive local
its ongoing operations or implement its planned activities and strategies. and international investor relationships who have supported the Company.
This includes but is not limited to funding to complete the infrastructure
necessary to connect to the power grid and generate electricity at the Lesedi
project and funds to facilitate drilling of additional gas wells to deliver
sufficient gas for development of the proposed 10MW power project. There can The Company actively manages its capital requirements and maintains close
be no assurance that such funding will be available when required or on relationships with potential investors. The Company continues to explore
satisfactory terms or at all. Inability to find sufficient funds may result in sources of both equity and debt capital.
the delay or abandonment of certain activities which would likely have an
adverse on the Company's progress.
The Company has some investors who have provided non-binding indications that
they could provide long term support of the Company.
Health and Safety The project operations are in a remote location, in a sometimes-harsh The Company employs highly skilled and experienced personnel where possible.
environment and involves the use of heavy machinery and equipment. The Chief Operations Officer is supported by a dedicated Safety, Health and
Environment (SHE) officer and a paramedic is also on duty at all times at the
field operations. The Company has a training and safety management system and
external audits of the safety management system are conducted. All visitors to
site are given a safety briefing.
Freedom to Operate The Company has licences to operate over approximately 8,000 square km and has The Company continues to support regular and extensive Government engagement
had continued access to key licence areas when required. Negative sentiment activities to interest and educate lawmakers to the country's natural resource
towards the project or industry may impair Tlou's freedom to operate. Changes opportunities as well as keep up to date with changing national power
to key Government personnel and/or national policy could also impact the strategies and requirements.
Company's ability to operate effectively.
Tlou supports and interacts with a wide network of local stakeholders
including farmers and landowners to try and ensure that the needs of the
community are being met and that the project can provide benefits for all
stakeholders including providing long term and sustainable employment
opportunities.
Environment Botswana's natural habitat, water and wildlife needs to be protected. Botswana Tlou has full environmental approval in place for development of the
rigorously enforces its environmental regulations so the risk of fines or gas-to-power project. The Company aims to not just meet environmental
other liabilities for noncompliance is commensurately high. requirements but exceed them.
The Company uses local specialists to support its ongoing permit renewals,
environmental assessments and licence applications. Continual monitoring of
actual and potential impacts on the environment is practiced to try and ensure
that any impact on the natural habitat is eliminated or minimised.
Power Sales The Company has signed a 10MW Power Purchase Agreement (PPA) with Botswana The Company works closely with its contractors and engineers to progress
Power Corporation (BPC) with the aim for first power to be supplied into the infrastructure projects in a timely manner.
national grid in late 2023 or early 2024. There is a risk completion that the
grid connection infrastructure could be delayed thereby postponing first power
sales. No other agreements are currently in place for sale of power or gas to
other parties. Management continues to explore opportunities with other potential customers
across the region, potentially via the Southern African Power Pool or within
Botswana. The power market in South Africa is experiencing some difficulties
which may lead to opportunities to provide power.
The Company also aims to diversify its operations to provide ancillary
products such as solar power.
Geological Risk The Company has approximately 8,000 square km of licence areas part of which Tlou has invested in seismic surveys and core hole drilling to identify areas
has not had significant CBM operations to date. There remains significant of lower risk prior to conducting further exploration and evaluation. This
geological risk in these areas and subject to operational results these areas strategy is planned for undeveloped areas of the project. After a decade of
may not be commercial. operating in the region and supported by external resource certifications, the
operations team have and continue to develop an excellent knowledge of the
geological area to help de-risk future exploration and evaluation operations.
Remote Operations The Company operates over 100km from established medical and engineering The Company has on-site paramedic support and has invested in its own stock of
support facilities in the closest urban area which increases costs and risks equipment so that it can ideally operate as autonomously as possible over a
as well as requiring adequate insurance. greater range of activities.
A purpose-built field operations camp is under construction which will be
suitable for full development of the initial 10MW project and for further
expansion.
People The Company may lose key executives and management. The Company operates in a The Company continues to search for skilled staff to grow the team to satisfy
competitive environment in relation to talented corporate and technical the Company's needs and ideally to have a lead person and back-up support
personnel. person for all key positions. In addition, implementation of appropriate staff
training and succession plans is a key target. The Company offers incentives
and development opportunities for key executives and management to attract the
best talent to the Company.
Auditor's Independence Declaration
The auditor's independence declaration for the half-year ended 31 December
2022 has been received and is attached to this report.
Signed in accordance with a resolution of the Board of Directors.
Anthony Gilby
Managing Director
Brisbane
9 March 2023
Consolidated statement of comprehensive income for the half-year ended 31
December 2022
Consolidated
Note Dec 2022 Dec 2021
$ $
Interest income 6,351 9
Expenses
Employee benefits expense (564,644) (320,901)
Depreciation expense (147,104) (279,106)
Foreign exchange gain 189,605 45,654
Interest expense (296,013) -
Share based payment expense (76,369) (14,670)
Professional fees (271,658) (107,675)
Occupancy costs (6,746) (9,000)
Other expenses 2 (1,032,014) (585,650)
Fair value loss on financial instruments (46,667) -
LOSS BEFORE TAX (2,245,259) (1,271,339)
Income tax - -
LOSS FOR THE PERIOD (2,245,259) (1,271,339)
OTHER COMPREHENSIVE INCOME/(LOSS)
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations (1,009,425) (1,665,137)
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS) (1,009,425) (1,665,137)
TOTAL COMPREHENSIVE INCOME/(LOSS) (3,254,684) (2,936,476)
Earnings per share
Cents Cents
Basic loss per share (0.3) (0.2)
Diluted loss per share (0.3) (0.2)
Consolidated statement of financial position as at 31 December 2022
Consolidated
Note Dec 2022 June 2022
$ $
CURRENT ASSETS
Cash and cash equivalents 6,154,779 7,875,025
Trade and other receivables 427,322 424,220
Other current assets 3 1,082,016 178,887
TOTAL CURRENT ASSETS 7,664,117 8,478,132
NON-CURRENT ASSETS
Exploration and evaluation assets 4 49,740,884 49,232,167
Other non-current assets 587,016 602,112
Property, plant and equipment 288,029 366,492
Contract costs 5 3,526,329 948,446
TOTAL NON-CURRENT ASSETS 54,142,258 51,149,217
TOTAL ASSETS 61,806,375 59,627,349
CURRENT LIABILITIES
Trade and other payables 1,226,537 563,599
Derivatives 12,184 696,153
Lease liabilities 14,872 13,792
Provisions 339,694 319,903
TOTAL CURRENT LIABILITIES 1,593,287 1,593,447
NON-CURRENT LIABILITIES
Convertible notes 6 7,633,374 7,263,643
Derivatives 64,237 67,600
Lease liabilities 47,163 56,530
Provisions 113,000 113,000
TOTAL NON-CURRENT LIABILITIES 7,857,774 7,500,773
TOTAL LIABILITIES 9,451,061 9,094,220
NET ASSETS 52,355,314 50,533,129
EQUITY
Contributed equity 7 111,764,427 106,763,927
Reserves (7,838,089) (6,716,016)
Accumulated losses (51,571,024) (49,514,782)
TOTAL EQUITY 52,355,314 50,533,129
Consolidated statement of changes in equity for the half-year ended 31
December 2022
Contributed Equity Share Based Payments Reserve Foreign Currency Translation Reserve Accumulated Losses Total
$ $ $ $ $
Consolidated
Balance at 1 July 2021 106,763,927 925,604 (6,155,951) (45,185,666) 56,347,914
Loss for the period - - - (1,271,339) (1,271,339)
Other comprehensive income, net of tax - - (1,665,137) - (1,665,137)
Total comprehensive income - - (1,665,137) (1,271,339) (2,936,476)
Transactions with owners in their capacity as owners
Share based payments - 14,670 - - 14,670
- 14,670 - - 14,670
Balance at 31 December 2021 106,763,927 940,274 (7,821,088) (46,457,005) 53,426,108
Balance at 1 July 2022 106,763,927 1,157,804 (7,873,820) (49,514,782) 50,533,129
Loss for the period - - - (2,245,259) (2,245,259)
Other comprehensive income, net of tax - - (1,009,425) - (1,009,425)
Total comprehensive income - - (1,009,425) (2,245,259) (3,254,684)
Transactions with owners in their capacity as owners
Share based payments - 76,369 - - 76,369
Transfers - Options expired (189,017) - 189,017 -
Shares issued, net of costs 5,000,500 - - - 5,000,500
5,000,500 (112,648) - 189,017 5,076,869
Balance at 31 December 2022 111,764,427 1,045,156 (8,883,245) (51,571,024) 52,355,314
Consolidated statement of cash flows for the half-year ended 31 December 2022
Consolidated
Note Dec 2022 Dec 2021
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees (inclusive of GST and VAT) (1,977,025) (1,049,650)
Interest received 6,351 9
GST and VAT received 165,550 21,891
NET CASH USED IN OPERATING ACTIVITIES (1,805,124) (1,027,750)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation assets (1,908,226) (959,344)
Payment for contract assets (2,648,787) -
Payments and deposits for property, plant and equipment (573,151) (49,771)
NET CASH USED IN INVESTING ACTIVITIES (5,130,164) (1,009,115)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares 5 5,000,500 -
Payments of lease liabilities (10,757) (11,319)
NET CASH PROVIDED BY FINANCING ACTIVITIES 4,989,743 (11,319)
Net (decrease)/increase in cash held (1,945,545) (2,048,184)
Cash at the beginning of the period 7,875,025 6,385,384
Effects of exchange rate changes on cash 225,299 (50,799)
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 6,154,779 4,286,401
Notes to the consolidated financial statements for the half-year ended 31
December 2022
Note 1. Significant accounting policies
Introduction
Tlou Energy Limited (Tlou) is a company domiciled and incorporated in
Australia. The Financial Report for the half-year ended 31 December 2022
consists of the Financial Statements of Tlou Energy Limited and the entities
it controlled during the period ('Consolidated Entity' or the 'Group').
Compliance with accounting standards
The half-year financial report is a general purpose financial report prepared
in accordance with the requirements of the Corporations Act 2001 and
Australian Accounting Standard AASB 134: Interim Financial Reporting.
The half-year financial report does not include all the notes of the type
normally included in an annual financial report and shall be read in
conjunction with the most recent annual financial report of the group for the
year ended 30 June 2022 and any public announcements made by Tlou during the
interim reporting period in accordance with the continuous disclosure
requirements of the Corporation Act 2001.
Basis of preparation
The financial statements have been prepared on an accruals basis and are based
on historical costs except for derivative financial instruments which are
measured at fair value through profit and loss. The financial report is
presented in Australian dollars.
The accounting policies and methods of computation applied by the Consolidated
Entity in the consolidated interim financial report are the same as those
applied by the Consolidated Entity in its consolidated financial report as at
and for the year ended 30 June 2022, except as noted below.
New and revised standards
A number of new or amended standards became applicable for the current
reporting period. The impact of the adoption of these standards did not have
any impact on the group's accounting policies and did not require
retrospective adjustments.
Going Concern
The consolidated financial statements have been prepared on a going concern
basis which contemplates that the consolidated entity will continue to meet
its commitments and can therefore continue normal business activities and the
realisation of assets and settlement of liabilities in the ordinary course of
business.
Because of the nature of the operations, exploration or pre-development
companies, such as Tlou Energy Limited, find it necessary on a regular basis
to raise additional cash funds for future exploration and development activity
and meet other necessary corporate expenditure. The Company has recently
completed an equity capital raising but will require additional funding for
ongoing operations and working capital requirements for the next 12 months.
Subject to the results of these operations the consolidated entity may also
need to raise additional capital to expand and develop the project further.
Accordingly, the consolidated entity is in the process of investigating
various options for the raising of funds which may include but is not limited
to an issue of shares or the sale of exploration assets where increased value
has been created through previous exploration activity.
At the date of this financial report, none of the above fund-raising options
have been concluded and no guarantee can be given that a successful outcome
will eventuate. The directors have concluded that as a result of the current
circumstances there exists a material uncertainty that may cast significant
doubt regarding the consolidated entity's and the Company's ability to
continue as a going concern and therefore the consolidated entity and Company
may be unable to realise their assets and discharge their liabilities in the
normal course of business. Nevertheless, after taking into account the current
status of the various funding options currently being investigated and making
other enquiries regarding other sources of funding, the directors have a
reasonable expectation that the consolidated entity and the Company will have
adequate resources to fund its future operational requirements and for these
reasons they continue to adopt the going concern basis in preparing the
financial report.
The interim financial report does not include adjustments relating to the
recoverability or classification of recorded assets amounts nor to the amounts
or classification of liabilities that might be necessary should the group not
be able to continue as a going concern.
Fair values
The fair values of Consolidated Entity's financial assets and financial
liabilities approximate their carrying values. No financial assets or
financial liabilities are readily traded on organised markets in standardised
form.
Accounting estimates and judgements
Critical estimates and judgements are continually evaluated and are consistent
with those disclosed in the previous annual report.
Exploration & evaluation assets
In a prior period, the Consolidated Entity converted a prospecting licence
into a mining licence. A mining licence allows the commencement of
commercial development. Management has not commenced amortisation of the
exploration and evaluation assets held in relation to the mining licence as
the Consolidated Entity has not yet entered into production of a commercially
viable resource.
Note 2. Expenses
Loss before income tax includes the following specific expenses: Dec 2022 Dec 2021
$ $
Other expenses
● Stock exchange and secretarial fees 197,608 140,890
● Engineers and consultants 190,204 210,491
● Investor relations 320,463 136,327
● Legal fees 128,689 13,044
Note 3. Other current assets
Dec 2022 June 2022
$ $
Deposits for purchase of land 317,394 81,389
Prepayments for material and equipment for new field operations facility 452,768 -
Other prepayments 311,854 97,498
1,082,016 178,887
Note 4. Exploration and evaluation expenditure
Dec 2022 June 2022
$ $
Exploration and evaluation assets 49,740,884 49,232,167
49,740,884 49,232,167
Movements in exploration and evaluation assets
Balance at the beginning of period 49,232,167 48,855,466
Exploration and evaluation expenditure during the year 1,403,354 1,926,164
Impairment expense - (166,054)
Foreign currency translation (894,637) (1,383,409)
Balance at the end of period 49,740,884 49,232,167
The recoupment of costs carried forward in relation to areas of interest in
the exploration and evaluation phase is dependent on successful development
and commercial exploitation, or alternatively, sale of the respective areas of
interest.
Note 5. Contract costs
Consolidated
Dec 2022 June 2022
Contract costs - transmission line $ $
Opening balance 948,446 -
Additions 2,577,883 948,446
Closing balance 3,526,329 948,446
The Company has contract with a third party for the construction of a
transmission line from the Company's Lesedi Power Project to the town of
Serowe in Botswana. The expected cost of this contract is approximately BWP
60m (~$7m). Of this expected total, $3,562,329 has been capitalised at 31
December 2022.
Once the transmission line and associated infrastructure is completed and
approval is granted by the relevant authority in Botswana, the transmission
line will be connected to the existing power grid in Botswana. Under current
legislation, on connection to the existing grid all ownership, rights and
responsibilities for the transmission line and associated infrastructure will
transfer to Botswana Power Corporation, the national power utility in Botswana
and current owner of the existing power grid.
Note 6. Convertible notes
The parent entity issued convertible notes totalling US$5,000,000 on 24
January 2022. The notes are convertible into ordinary shares of the parent
entity, at the option of the holder at the higher of:
(a) A 10% discount to the weighted average traded price of the Company's
shares on the ASX over the 90 days prior to the Conversion Date; and
(b) A$0.06
The notes incur interest at 7.75% and the Company may capitalise interest for
the first 18 months, thereafter, interest must be paid at each six-month
anniversary of issue date. The notes expire on 24 January 2027, being 5 years
after issue.
Consolidated
Dec 2022 June 2022
$ $
Opening Balance/Host liability on initial recognition 7,263,643 6,794,845
Interest expense 296,013 241,917
Interest paid - -
Effect of foreign exchange movement 73,718 226,881
Non-current host liability 7,633,374 7,263,643
Total Borrowings 7,633,374 7,263,643
Note 7. Contributed equity
Dec 2022 June 2022 Dec 2022 June 2022
Shares Shares $ $
Opening balance 600,199,039 600,199,039 106,763,927 106,763,927
Issue of ordinary shares during the half-year* 142,863,393 - 5,000,500 -
Ordinary shares ‑ fully paid 743,062,432 600,199,039 111,764,427 106,763,927
*Ordinary shares issued during the half-year
Issue Date No. of Shares Issue Price (AUD)
Exercise of Options 18-Jul-22 6,250 $0.08
Placement 9-Nov-22 57,142,857 $0.035
Placement 16-Nov-22 85,714,286 $0.035
Options
At 31 December 2022, there were no options for ordinary shares in Tlou Energy
Limited on issue.
Performance rights
The following table shows the number, movements and exercise price of
performance rights for the period ended 31 December 2022.
Date of Approval Exercise Price 1/07/2022 Issued Exercised Expired 31/12/2022
10 November 2016 $0.28 2,275,000 - - - 2,275,000
17 October 2018 $0.165 2,225,000 - - - 2,225,000
17 October 2018 $0.22 2,225,000 - - - 2,225,000
24 November 2021 $0.10 3,000,000 - - - 3,000,000
24 November 2021 $0.165 3,000,000 - - - 3,000,000
12,725,000 - - - 12,725,000
Note 8. Contingent liabilities
The Directors are not aware of any contingent liabilities at 31 December 2022.
Note 9. Segment information
Identification of reportable segments
Operating segments are identified on the basis of internal reports that are
regularly reviewed by the executive team in order to allocate resources to the
segment and assess its performance. The Company currently operates in one
segment, being the exploration, evaluation and development of coalbed methane
resources and power generation in southern Africa.
Segment revenue
As at 31 December 2022 no revenue has been derived from its operations (2021:
$nil).
Segment assets
Segment non-current assets are allocated to countries based on where the
assets are located as outlined below.
Dec 2022 June 2022
$ $
Botswana 54,104,622 51,147,251
Australia 37,636 1,966
54,142,258 51,149,217
Note 10. Commitments
Exploration expenditure:
To maintain an interest in the exploration tenements in which it is involved,
the consolidated entity is required to meet certain conditions imposed by the
various statutory authorities granting the exploration tenements or that are
imposed by the joint venture agreements entered into by the consolidated
entity. These conditions can include proposed expenditure commitments. The
timing and amount of exploration expenditure obligations of the consolidated
entity may vary significantly from the forecast based on the results of the
work performed, which will determine the prospectivity of the relevant area of
interest. Subject to renewal of all prospecting licences, the consolidated
entity's proposed expenditure obligations which are not provided for in the
financial statements are as follows:
Consolidated
Dec 2022 June 2022
Minimum expenditure requirements $ $
● not later than 12 months 153,032 451,575
● between 12 months and 5 years 549,415 165,103
702,447 616,678
Contract Assets:
The consolidated entity has agreed contracts to construct a transmission line
for approximately BWP 60m (~$7m) and substations for approximately BWP 42m
(~$4.8m). In relation to the transmission line 3,526,329 has been capitalised
at 31 December 2022 ($948,446 at 30 June 2022). No costs had been incurred in
relation to the substation contract at the reporting date.
Note 11. Events occurring after reporting date
In January 2023, the Company issued 87,653,278 ordinary shares at $0.035 per
share. The total issue share capital following issue of these shares is
830,715,710. Other than the matters discussed in this report, there has not
arisen in the interval between the end of the half-year and the date of this
report any item, transaction or event of a material and unusual nature likely,
in the opinion of the directors, to affect significantly the operations of the
group, the results of those operations or the state of affairs of the group in
subsequent financial periods.
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