Aim-listed Edenville Energy on Monday reported a low level of uptake of its open offer on the stock exchange and that, consequently, operations at its Rukwa coal project, in Tanzania, have been constrained.
The company was implementing cost cutting measures to preserve working capital and, despite having the requisite approvals, it has been unable to expand its operations or increase mining capacity.
Edenville in February announced that it had raised gross proceeds of £62 418 from an open offer to existing shareholders, coupled with a further £15 000 that was raised following a subscription for ordinary shares by chairperson Jeffrey Malaihollo.
The open offer sought to raise proceeds of up to £619 099 to strengthen the company’s balance sheet and to progress the operations at Rukwa, including increasing the available run-of-mine (RoM) coal for processing through the opening up of the northern pit area.
Until additional capital can be applied to the project, the company’s management does not expect production to increase from current levels.
The company processed about 17 760 t of RoM coal in the first quarter of this year. This yielded 3 116 t of washed coal and about 7 992 t of fine coal.
“Owing to the shortfall in the proceeds of the open offer, the company will need to raise additional capital in the near term in order to meet its project and corporate commitments and is currently exploring several options at both a company and project level. A further update regarding financing will be made as soon as practicable.
“Additionally, the directors have implemented certain cost cutting measures at the project, including stopping overburden movement and focusing on more easily accessible coal. Further corporate cost cutting measures have been undertaken and the directors have not taken their salaries since December 2018, after only taking part of their salary entitlements in 2018,” the company stated on Monday.