16 August 2022

Edenville Energy Plc

("Edenville" or the "Company")

New Coal Mining Agreement

Business update

Edenville is pleased to announce that it has signed an agreement ("Agreement") with Brahma Energies Limited ("Brahma"), commencing immediately, to secure production and sales of a minimum of 4,000 tonnes of washed coal per month at the Company's Rukwa Coal Project ("Rukwa") in Tanzania, potentially rising to a minimum 6,000 tonnes after 2 months, based on the assumptions set out below.

Brahma are a local mine operator and commercial and logistics specialist having up to 70 transport vehicles on the roads of Tanzania. Their team is experienced in all aspects of operations, mine management and coal commercial sales. They bring with them an offtake which will enable Edenville to sell all of its production of washed coal to parties introduced by Brahma. The agreement with Brahma is for 12 months initially and can be extended by mutual agreement.

Economics of the Agreement

Under the Agreement, Brahma will take on full day to day operational management and control of the Rukwa mine, including all operational costs, with ultimate oversight continuing to be provided by Edenville. Given local demand, sales are currently expected to take place to customers in Tanzania and adjoining neighbouring countries. As a result, the net target sales price for Rukwa coal delivered at the gate of the mine is currently estimated to be between $35-$50 per washed tonne. The revenue share arrangements under the Agreement give Edenville $10 per tonne of washed coal sold at the minimum price of $35 per tonne, plus 60% of any sales revenue above $35 per tonne of washed coal ("profit share"). Brahma shall be responsible for the collection of any taxes and royalties from coal sales after month 2.

Accordingly, the Brahma operational team is motivated to ensure maximum output, sales volume and sales price are achieved, leading to an efficient running of the mine as a result. Edenville management will work closely with the operator on any proposed sales contracts.

Edenville will continue to manage and fund operational costs from its existing cash resources during the first two months of the Agreement, following which the Company expects Rukwa to become cashflow positive on an ongoing basis. Edenville, at its sole discretion, can also deploy additional capital to expedite production ramp up; any such capital deployed is to be repaid to Edenville before any profit share is paid. Brahma's commitment to production of 4,000 tonnes per month is contingent on plant being in working order and any commitment above 4,000 tonnes per month is contingent on further plant improvements.

Operational Review

Following a visit to Rukwa and an analysis of the operation, the newly appointed management of Edenville have concluded the mine would benefit from greater oversight and management on the ground at Rukwa, to meaningfully build on the very low and sporadic historical production and sales, and to allow Rukwa to achieve its potential.

At present, the Rukwa wash plant, which has an input capacity of 100 tonnes per hour, is yielding approximately 35 tonnes of washed coal an hour of output. There is scope to increase this yield following the completion of ongoing repairs. Management will update the market once any improvements have been made.

Based on its initial analysis and following consultation with Brahma since their appointment on 3 August 2022, Edenville believes that an initial 4,000 tonnes per month of washed coal can be achieved from the wash plant by mid-September 2022 following the completion of ongoing works on the wash plant. A further increase to 6,000 tonnes per month of washed coal will then be targeted, albeit following additional maintenance and repairs to existing infrastructure and/or deployment of further equipment. This output could be increased still further with longer or double shifts and/or by adding additional working days. However, the Company is pursuing a conservative approach to increase production steadily from these initial levels until such time operational capacity of both staff and existing machinery is better understood. The Company will be monitoring progress and looking at ways to further improve output above the target of 4,000-6,000 tonnes per month.

The current 'at gate' sales price range of $35-50 per tonne from Rukwa is low in comparison to international coal prices. However, this is before transportation costs, which are high given the remoteness of Rukwa. It also reflects the royalty regime within Tanzania, which includes the transport costs in its calculation. To achieve international coal prices the mine would need both large, consistent production and sales quantities (something Rukwa has not yet provided) and reasonable access to international ports via road or rail infrastructure. Therefore, sales of Rukwa coal are currently focused on the local markets, particularly cement companies who require coal as part of their production process. It should be noted that regional coal prices have still risen over the last year and there is potential for further increases in the event the global demand for coal continues. Establishing a reliable source of washed coal at Rukwa is also expected to strengthen the Company's position on any further offtake negotiations.

Noel Lyons, CEO of Edenville, commented:

"I am pleased to be announcing this agreement with Brahma. Unlike previous agreements, this contract does not cap the Edenville upside in terms of coal sales price. We have undertaken a thorough review of the asset and settled on a contracted output and sales of 4,000 tonnes of washed coal per month, potentially rising to 6,000 tonnes per month from mid October 2022 for the remainder of the 12-month contract, based on the success of the aforementioned development plan.

Brahma have agreed that a stock pile of run of mine coal will be built up over the coming months to seek to ensure production and sales of 6,000 tonnes of washed coal per month, even during the rainy season which can severely curtail access to run of mine. With a regular supply of washed coal, the Company is optimistic it will be able to secure attractive market prices for domestic and regional sales.

The Company will keep the market appraised of progress and output levels as the ongoing technical audit is completed and plant repairs and upgrades are carried out."

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The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.