REG - Tlou Energy Ltd - Operational Report Quarter ended 31 December 2021
24/01/2022 07:05
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RNS Number : 3053Z Tlou Energy Ltd 24 January 2022
24 January 2022
Tlou Energy Limited
("Tlou" or "the Company")
Operational Report - Quarter ended 31 December 2021
Tlou Energy Limited is developing power solutions in Sub-Saharan Africa
through gas-fired power, solar power and hydrogen projects. The company is
listed on the ASX (Australia), AIM (UK) and the BSE (Botswana). The Lesedi
Power Project ("Lesedi") is the Company's most advanced project. Tlou plans to
develop gas and solar power generation assets at Lesedi with electricity to be
sold into the power grid.
Project Areas
The Company has three project areas in Botswana:
· Lesedi Project - Gas & Solar Power, Hydrogen production
· Mamba Project - Exploration & Evaluation
· Boomslang Project - Exploration & Evaluation
Lesedi Project Area, Botswana
Licences: Production Licence 2017/18L, Prospecting
Licences 001 & 003/2004 and 35 & 37/2000
Ownership: Tlou Energy Limited 100%
The Lesedi licenses covers an area of approximately 3,800 Km(2) and consists
of four Prospecting Licences (PL) and a Production Licence. The Lesedi Power
project is located in the Company's Production Licence area (~800 km(2)).
The Lesedi project has all approvals in place to allow development to
commence. The first phase will be a 10MW power project with electricity to be
sold to Botswana Power Corporation. Once in full production, 10MW of
generation could provide annual revenue of approximately US$10m.
During the quarter the Company signed a 10MW Power Purchase Agreement (PPA)
with Botswana Power Corporation (BPC). Under the terms of the PPA, BPC will
purchase up to 10MW of power generated at Tlou's Lesedi power project.
The Company also signed a Convertible Note Agreement with Botswana Public
Officers Pension Fund (BPOPF).
The principal terms of the Convertible Note Agreement are as follows:
· Amount: BWP 50m
· Maturity: 5 years
· Interest rate: 7.75% per annum
· Conversion: Conversion to shares at a 10% discount to
the 90-day VWAP
The funds are planned to be used to finance construction of transmission line
infrastructure to connect the Lesedi Project to the power grid, installation
of generation assets, and ancillary costs to facilitate power generation and
sale of electricity.
The status of the Lesedi area 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 September 2022 Current
PL 037/2000 September 2022 Current
Mamba Project Area, Botswana
Licences: Prospecting Licences 237-241/2014
Ownership: Tlou Energy Limited 100%
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 exploration is likely
to be core hole drilling. Positive results from operations at Mamba could
expand the reserves footprint across Tlou's project areas.
In the event of successful development at Mamba, it is envisioned that this
area would be developed as a separate project from Lesedi, with the potential
for gas-fired power, solar power and hydrogen production.
The status of the Mamba area 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 Area, Botswana
Licence: Prospecting Licence 011/2019
Ownership: Tlou Energy Limited 100%
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 having only received environmental approval to commence exploration
activities in 2021. A renewal application for the Boomslang licence was
submitted in December 2021.
The status of the Boomslang area licence is as follows:
Licence Expiry Status
PL 011/2019 March 2022 Renewal application submitted
Hydrogen
The Company's hydrogen technology partner Synergen Met Pty Ltd ("SM"), a
specialist in plasma torch and pyrolysis technology, has informed the Company
that during the quarter, preliminary engineering for their hydrogen-carbon
production process was completed. The plasma torch will be tested and
configured to optimise hydrogen and solid carbon production.
The use of plasma technology for hydrogen production will be a first for the
sub-Saharan region and could be advantageous for the production of low
emission, clean energy across the region as well as in the related fields of
waste-to-energy and waste disposal.
Tlou and SM intend to use the hydrogen produced from the prototype to generate
electricity and possibly for transport fuel. Solid carbon will be made
available for regional consumers that require the product. World markets for
hydrogen and solid carbon black are predicted to expand considerably over the
short and medium term.
SM considers that their process meets the definition of green hydrogen
production via their plasma torch gas pyrolysis design.
Crypto Mining
During the quarter the Company held discussions with an international crypto
mining organisation to use Tlou's electricity to mine crypto currencies such
as Bitcoin. The Company is evaluating the merits of this possibility which
could lead to another avenue to generate income from Tlou's gas. The potential
exists to generate revenue from this project while the grid connection
infrastructure is being built.
Cash Position
At the end of the quarter the Company had $4.28m cash on hand (unaudited). The
aggregate value of payments to related parties and their associates of $129k
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.
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
Shore Capital (Broker) +44 (0)20 7408 4090
Toby Gibbs, John More
Public Relations
Ashley Seller +61 418 556 875
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 December 2021
Consolidated statement of cash flows Current quarter Year to date (6 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
(c) production
(d) staff costs (199) (367)
(e) administration and corporate costs (460) (683)
1.3 Dividends received (see note 3)
1.4 Interest received
1.5 Interest and other costs of finance paid
1.6 Income taxes paid
1.7 Government grants and tax incentives
1.8 Other (provide details if material) 19 22
1.9 Net cash from / (used in) operating activities (640) (1,028)
2. Cash flows from investing activities
2.1 Payments to acquire or for:
(a) entities
(b) tenements
(c) property, plant and equipment (5) (51)
(d) exploration & evaluation (622) (958)
(e) investments
(f) other non-current assets
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)
2.6 Net cash from / (used in) investing activities (627) (1,009)
3. Cash flows from financing activities
3.1 Proceeds from issues of equity securities (excluding convertible debt
securities)
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
3.9 Other (provide details if material) (8) (11)
3.10 Net cash from / (used in) financing activities (8) (11)
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 5,537 6,385
4.2 Net cash from / (used in) operating activities (item 1.9 above) (640) (1,028)
4.3 Net cash from / (used in) investing activities (item 2.6 above) (627) (1,009)
4.4 Net cash from / (used in) financing activities (item 3.10 above) (8) (11)
4.5 Effect of movement in exchange rates on cash held 24 (51)
4.6 Cash and cash equivalents at end of period 4,286 4,286
5. Reconciliation of cash and cash equivalents Current quarter Previous quarter
at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts
$A'000
$A'000
5.1 Bank balances 4,286 5,537
5.2 Call deposits
5.3 Bank overdrafts
5.4 Other (provide details)
5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 4,286 5,537
6. Payments to related parties of the entity and their associates Current quarter
$A'000
6.1 Aggregate amount of payments to related parties and their associates included 129
in item 1
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 at quarter end Amount drawn at quarter end
Note: the term "facility' includes all forms of financing arrangements available to the entity.
$A'000
$A'000
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 activities $A'000
8.1 Net cash from / (used in) operating activities (item 1.9) 640
8.2 (Payments for exploration & evaluation classified as investing activities) 622
(item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 8.2) 1,262
8.4 Cash and cash equivalents at quarter end (item 4.6) 4,286
8.5 Unused finance facilities available at quarter end (item 7.5) -
8.6 Total available funding (item 8.4 + item 8.5) 4,286
8.7 Estimated quarters of funding available (item 8.6 divided by item 8.3) 3
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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:
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:
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:
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:
.....24/01/2022...............................................................
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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