Tlou Energy raises £3.1m to invest in coal bed methane projects

The company raised the funds from the issue of 51.78m new shares, which represents 17.9% of its enlarged share capital, at a price of AU$0.10 or 0.06p per share to investors in Australia and the UK.

The share price was a discount in the range of 12-19% to the 10-day volume weighted average price for Tlou's shares on AIM and the Australian Stock Exchange (ASX).

The new shares are expected to be admitted to trade on ASX on 6 April and on AIM the following day. After admission, the company will have a share capital of 288.98m shares with voting rights.

The funds will be used to buy new 2D seismic data for additional reserves, d vertical well drilling along the new seismic line and complete studies needed for the submission of the mining licence for the Botswana government's 100 megawatt coal bed methane pilot project.

It will also be used for production testing at the Selemo mine and for working capital for its Lesedi coal bed methane project.

Managing director Tony Gilby said: "This placement along with the recently announced agreement with Independent Power Corporation provides significant momentum for Tlou to progress the upstream (gas field) and downstream (power and transmission) components of the Lesedi coal bed methane project with the objective of supplying the first gas-fired power in Botswana".

Tlou has also announced that there will be a share purchase plan to raise a further AU$2m at the same price to pay for Lesdi work programme costs. Investors will be be able to apply with a minimum investment of AU$1,000 and maximum of AU$15,000 free of brokerage and other related transaction costs.

Shares in Tlou Energy were down 9.79% to 6.32p at 0949 GMT.