REG - Tlou Energy Ltd - Operational Report Quarter ended 31 December 2022
27/01/2023 07:00
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RNS Number : 0848O Tlou Energy Ltd 27 January 2023
27 January 2023
Tlou Energy Limited
("Tlou" or "the Company")
Operational Report - Quarter ended 31 December 2022
Highlights
Ø Transmission line construction progressing
Ø Development of a purpose-built operations facility nearing completion
Ø Preparations for drilling in 1Q23 on-track
Ø New strategic investor and long-term funder secured
Projects
The Company has three project areas in Botswana.
· Lesedi Project - Power Development, Exploration & Evaluation
· Mamba Project - Exploration & Evaluation
· Boomslang Project - Exploration & Evaluation
Lesedi Project
The Lesedi Project consists of three 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 037/2000 September 2022 Verbal confirmation of renewal received. Awaiting written confirmation post
implementation of new IT system at the department of mines..
*PL renewal applications are submitted three months prior to expiry.
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. Tlou's initial 10MW PPA is part of
a 100MW Request for Proposal (RFP) for the development of CBM power projects
in Botswana. This, coupled with an existing 90MW RFP for supply of gas or
power to the Orapa Diamond Mine, creates enormous expansion potential.
Gas-to-Power project
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 of approximately US$10m, noting that CPI
escalation also applies.
The project is in development including 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) and is
expected to be completed around mid-2023.
Achieved progress as at end of December 2022 was 33%. Zismo are fast tracking
the wooden pole works with intent to complete these in February 2023, earlier
than planned. They will then focus on stringing work and the steel monopole
section. Procurement has caused some issues to date, however, many materials
were shipped during the quarter and have now reached Botswana.
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.
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 1Q23. 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 commenced during the
quarter preparing for the Company's next production pod, Lesedi 6, with
drilling expected to commence during 1Q23. This will include 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. 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 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
****
Cash Position
At the end of the quarter the Company had ~A$6.1m cash on hand (unaudited).
The aggregate value of payments to related parties and their associates of
A$154k 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 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 December 2022
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 (71) (134)
(c) production
(d) staff costs (235) (455)
(e) administration and corporate costs (699) (1,044)
1.3 Dividends received (see note 3)
1.4 Interest received 6 6
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) 46 166
1.9 Net cash from / (used in) operating activities (953) (1,461)
2. Cash flows from investing activities
2.1 Payments to acquire or for:
(a) entities
(b) tenements
(c) property, plant and equipment (615) (633)
(d) exploration & evaluation (522) (1,901)
(e) investments
(f) other non-current assets (2,464) (2,866)
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 (3,601) (5,400)
3. Cash flows from financing activities 5,000 5,001
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) (6) (11)
3.10 Net cash from / (used in) financing activities (4,994) (4,990)
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 5,883 7,875
4.2 Net cash from / (used in) operating activities (item 1.9 above) (953) (1,461)
4.3 Net cash from / (used in) investing activities (item 2.6 above) (3,601) (5,400)
4.4 Net cash from / (used in) financing activities (item 3.10 above) 4,994 4,990
4.5 Effect of movement in exchange rates on cash held (167) 152
4.6 Cash and cash equivalents at end of period 6,156 6,156
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 6,156 5,883
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) 6,156 5,883
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 154
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) 953
8.2 (Payments for exploration & evaluation classified as investing activities) 522
(item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 8.2) 1,475
8.4 Cash and cash equivalents at quarter end (item 4.6) 6,156
8.5 Unused finance facilities available at quarter end (item 7.5) -
8.6 Total available funding (item 8.4 + item 8.5) 6,156
8.7 Estimated quarters of funding available (item 8.6 divided by item 8.3) 4.2
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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:
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:
.....27/01/2023...............................................................
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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