Edenville Energy PLC Updated Financial Model (3695K)
September 21 2016 - 1:00AM
UK Regulatory
TIDMEDL
RNS Number : 3695K
Edenville Energy PLC
21 September 2016
21 September 2016
EDENVILLE ENERGY PLC
("Edenville" or the "Company")
Updated Financial Model
Edenville Enegy plc, the Company developing an integrated coal
to power project in western Tanzania, would like to provide an
update on the status of the financial modelling work for the
project.
A newly constructed financial model (the "Financial Model") for
the Company's Rukwa Coal to Power Project has been completed by
Diamond Energy Ltd, an independent power modelling consultant,
commissioned by the Company. Diamond Energy Ltd, specialise in
building and reviewing valuation models for energy assets, and
assisting clients with negotiation of commercial contracts
supporting independent electricity projects.
Key Points
-- Newly developed independent 2016 Financial Model constructed by Diamond Energy Ltd
-- 2015 Power Plant Feasibility Study financial model
independently validated with new model results
-- Improved NPV (using a nominal pre tax discount rate of 10%)
of US$252 million for a 120MW power plant with a 30 year life
-- Pre Tax Project nominal IRR 23.4%
Rufus Short CEO of Edenville Energy plc said: "I am extremely
pleased with the completion of the new independent financial model
for our Rukwa Coal to Power Project. We now have both an additional
level of assurance to what has been done previously, and going
forward, will be able to use a fully independently constructed
model, structured for international project finance and so
preferable for funding negotiations. In addition, we are currently
in the process of completing significant work flow including an
updated mining assessment; bulk sampling of the deposit and
detailed coal wash plant requirements. These will feed into the
overall financial analysis of the project over the coming weeks and
months."
This new Financial Model further builds upon and validates the
results and integrity of the financial model constructed from the
results of the 2015 Power Plant Feasibility Study carried out by
Lahmeyer India.
Positive and comparable results were obtained in the new
Financial Model compared to the 2015 model with an increase of
approximately 14% in pre-tax NPV, reflective of improved time
granularity of cashflow modelling, pass through indexation and
revised capital cost phasing.
For clarity, the 2015 model returned a pre-tax NPV(10%) of
US$220 million with an IRR of 23.1% over a 30 year project life for
an integrated 120MW coal to power project at the Company's Rukwa
site. The newly constructed Financial Model using essentially the
same cost inputs returns an improved pre-tax NPV(10%) of US$252
million demonstrating an IRR of 23.4% over the same time period of
30 years. The size of power plant in both models was set at 120MW
with a plant utilisation of 80%.
Modelling Comparisons
2015 model 2016 Financial
Model
------------- --------------- ---------------
Plant size 120 MW 120 MW
------------- --------------- ---------------
Utilisation 80% 80%
------------- --------------- ---------------
NPV (10%) US$220 million US$252 million
------------- --------------- ---------------
Project IRR 23.1% 23.4%
------------- --------------- ---------------
Period 30 years 30 years
------------- --------------- ---------------
Additionally, the work currently being completed by independent
mining consultants, SMS, on evaluation of the mineable resource,
will allow the potential for a larger power plant to be more fully
assessed.
The Financial Model gives the Company an additional level of
confidence on both the integrity of the work originally carried out
in 2015 and the underlying modelling methodology.
We are extremely pleased that the original 2015 model has been
independently verified through this latest work. Running
essentially the same inputs though the new Financial Model
indicates the structure of our original modelling was conservative.
The new Financial Model has been independently constructed from
first principles and provides a basis to engage in detailed
discussions with relevant institutions for project financing and
development.
The Company along with its consultants is progressively updating
various inputs and parameters for the project as feasibility work
and other required tasks continue to be progressed and completed.
We will continue to update the model and as appropriate will inform
our shareholders accordingly of material changes.
Note: The Financial Model, which will be further developed as
inputs and parameters are optimised, has been constructed and
reviewed independently and undergone in-house review as part of the
feasibility process.
The Financial Model is indicative and based on the best
available data and estimates at the time. As technical and
commercial work progresses the Financial Model will be further
assessed and refined, both by the Company and by external
consultants. Accordingly the valuation metrics set out in this
announcement should not be taken as a financial forecast or
definitively relied upon for economic assessment purposes.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
For further information please contact:
Edenville Energy Plc
Jeff Malaihollo - Chairman +44 (0) 20 7652
Rufus Short - CEO 9788
Northland Capital Partners Limited
(Nominated Adviser)
Gerry Beaney +44 (0) 20 3861
David Hignell 6625
Optiva Securities Limited
(Broker)
Jeremy King +44 (0) 20 3137
Graeme Dickson 1902
IFC Advisory
(Financial PR and IR)
Tim Metcalfe
Graham Herring +44 (0) 20 3053
Heather Armstrong 8671
This information is provided by RNS
The company news service from the London Stock Exchange
END
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