Aim-listed Edenville Energy has recently received the proceeds of £100 000 from a share placement and expects to receive the net proceeds from a conditional offer to raise a further £410 000 shortly and has, therefore, restarted a number of activities at its Rukwa coal project, in south-west Tanzania.
The company had previously been forced to constrain operations to maintain capital while it sought funding.
The company used the period of limited production to further optimise the plant and facilities at Rukwa.
It reported on Tuesday that the recalibration of parts of the plant, orders for additional low capital expenditure items and the reorganisation of the workforce was now under way and that all upgrades were expected to be completed by the end of June.
These are in addition to the plant upgrades, such as the installation of the Lamella water treatment plant and the introduction of a pre-screening plant, that have taken place over the last six months.
Upon completion of this optimisation process, the company expects to eliminate the previous issues that had hindered the throughput and operational capacity of the plant, thereby enabling the plant to reach its targeted initial production capacity of 10 000 t a month of washed coal.
Meanwhile, the company has started site preparations for road construction to the new mining area, to the north of current operations.
Upon completion of road construction, the company intends to open up this new pit and begin extracting coal before the end of the third quarter of this year.
Prior to opening the northern mining area, the company plans to continue to mine the existing pit to build up stockpiles and supply coal to existing customers.
WASHED COAL SALES
In recent times Edenville has only achieved modest levels of production, and therefore, the inventory of washed coal has been exhausted.
The company has been able to sell all the washed coal it has produced to date and believes the current contracts which are in place for about 8 000 t a month in aggregate, will be satisfied from its opening up the northern mining area.
From recent enquiries received, the company believes there is a potential broader market for in excess of 10 000 t a month of washed coal.
As the stockpile builds up following the restart of operations, the company will restart sales to its existing client base and will continue to pursue additional orders from new and existing customers.