Edenville upbeat on latest activity at Rukwa Coal Project

The AIM-traded firm said of that, 512.5 tonnes of coal was washed between 20 and 31 March, due to improved weather conditions and operational performance of the wash plant.

It said it had established a “substantial” stockpile of run-of-mine coal, but the subsequent washing of the coal was hampered by its moisture content due to the ongoing rainy season in Tanzania.

However, the wash plant was able to operate for at least four hours per day on six occasions during the second half of March, which enabled it to average more than 10 tonnes per hour of throughput and achieve the company's target production rate of 2,500 tonnes per month of washed coal.

Edenville said it expected washed coal figures to continue to be volatile during April, but it added that it was encouraged by the results and evidence suggesting that Rukwa would be able to deliver on its initial production targets after the end of the rainy season, typically in May in Tanzania.

As it previously reported, the company had agreed to supply 2,000 tonnes of washed coal per month at a pre-transport price of $98 per tonne from June.

Additionally, Edenville said it was exploring the possibility of bringing an additional wash plant to Rukwa due to ongoing discussions with potential customers that had indicated demand for an additional 8,000 to 10,000 tonnes per month of washed coal.

The firm said it was also exploring non-equity avenues of funding to acquire an additional wash plant.

It had also identified an additional accessible coal seam at Rukwa, which could potentially increase the project's potential.

“Performance at Rukwa during the second half of March was much improved and suggested we have the potential to achieve our initial and contracted base case production target of 2,500 tonnes per month once the rainy season concludes,” said chief executive officer Noel Lyons.

“Confirmation that when the plant is able to operate it is doing so at a rate that will achieve these levels of production is very encouraging.”

Lyons said there were also other areas where the company would continue to target improvements, noting that work at site had also identified a further potential seam to be mined.

“Additionally, in conjunction with the work at Rukwa, we remain focused on securing potential new and exciting coal opportunities.”

At 1057 BST, shares in Edenville Energy were up 11.79% at 5.45p.

Reporting by Josh White for Sharecast.com.