Edenville Energy announces subscription to raise £1.25m

AIM-listed company Edenville Energy, which is developing a coal project in south west Tanzania, announced on Wednesday an oversubscribed subscription to raise £1.25m to complete construction and logistics work.

As well as issuing 208m new ordinary shares to new and existing shareholders, the company said it had issued 104m warrants to the subscribers on the basis of one warrant for every two new ordinary shares, exercisable at 0.8 pence per warrant at any time over the next 12 months.

Net proceeds from the placing will be used to the complete construction work at, and for transport logistics for, its Rukwa Coal Project, as well as providing working capital to fund the increase in production over the next six months.

In addition, cash could be used, "in the appropriate circumstances", for expansion options.

For chief executive Rufus Short, net proceeds are expected to enable Rukwa to begin generating positive cash flow.

"The net proceeds from this over subscribed placing are expected to take the project to the point where it is cash flow positive, a fundamental advance for Edenville. We are in detailed negotiations with coal customers and believe we currently have sufficient interest to justify our plans.

"We look forward to Edenville becoming a significant coal producer in the East Africa region and I look forward to providing our shareholders with further updates in due course."