Project Finance
The Company is currently seeking funding for development of Lesedi. The project is proposed to be developed in two phases.
Phase one involves transmission line construction, transformers, grid connection, electricity generators and potentially the drilling of additional gas wells. The 100 Km transmission line will run from the Lesedi project to the town of Serowe where it will connect to the existing power grid. Initial generation is proposed to be up to 2MW of electricity. Funding required for phase one is USD
Phase two funding is for the expansion of electricity generation up to 10MW. This will involve drilling more gas wells and the purchase of additional electricity generation assets. Funding required for phase two is USD
Funding discussions are progressing well, in particular with
Tlou is also considering what further progress can be made at Lesedi prior to conclusion of any
Ministerial Site Visit and Government support
The Company was delighted to welcome Honourable Minister Lefoko Moagi, Minister of Mineral Resources Green Technology and Energy Security (MMGE), and his team to the Lesedi project during the quarter. The Honourable Minister has been a long-term advocate of Coal Bed Methane (CBM) and Tlou's project and again reiterated his support during his visit.
Just after the end of the quarter the Company received written confirmation from MMGE of the intention of MMGE to fast track the development of CBM in
In relation to the current tender to implement up to 100MW of CBM fired power plants, MMGE confirmed that negotiations with preferred bidders are due to commence in
The Company looks forward to negotiation and finalisation of the tender process in the near term.
Signed PPA and Connection Agreement
Formalities having been completed for a 2MW Power Purchase Agreement (PPA) with
These agreements represent significant achievements and show substantial progress for the
Transmission line detailed design
Detailed design and engineering of the 100 Km transmission line and associated infrastructure to connect Lesedi to the electricity grid has been completed by the Company's engineers
Requests to tender were sent to the qualified parties in December, with responses to be received in late Q1 2021, with evaluation of bids and award of contracts planned for Q2 2021.
Lesedi gas production
Gas continues to flow at the Company's production well Lesedi 4P. The Lesedi 4P gas rate has shown a steady increase over time while water rates are progressively decreasing. The continuous nature of the gas flow throughout the year with the steady incline being observed is very encouraging.
Gas flow rates are not anticipated to increase materially until further drilling is carried out. Lesedi 4P is a single well and is not part of a mature gas field where multiple adjacent wells would all be assisting with the dewatering of the reservoir. Once further water can be removed from the system by additional wells, the Company expects that gas should start to substantially increase.
A schematic illustrating the historical production curves for gas and water to
The continuous gas flow reinforces the significant upside potential for shareholders and along with Tlou's plans for solar power, could create a new cleaner power opportunity for the region. Only the deeper gas target horizon (Morupule coal seam) has been explored to date with at least one other shallower potentially productive zone (Serowe coal seam) yet to be evaluated.
Community support
The Company continues its work with local communities as part of its environmental, social and governance commitment. The Company is engaged in activities aimed at advancing the lives of the local population and regional communities.
During the quarter the Company provided support to
Ownership:
The Lesedi project covers an area of approximately 3,800 Km2 and consists of four Coal and Coal Bed Methane (CBM) Prospecting Licences (PL) and a
The Lesedi project is the Company's most advanced project. Plans are in place to purchase land at the Lesedi project, install solar photovoltaic (PV) panels and gas-fired electricity generators and connect to the power grid in
Tlou's mining licence is required by an operator to develop a CBM asset. This licence spans a large 900 Km2 area and is valid until 2042.
Tlou has the only independently certified CBM gas reserves in
Initial development of the Lesedi project is planned to be up to 10MW of power. With plans for solar and gas fired power, these can be standalone operations or a hybrid solution with gas-fired power able to provide back-up power when solar is not available. The location of the Central Processing Facility (generation site) at the Lesedi project is approximately 100 Km from the electricity grid. The Company is planning to construct a 100 Km transmission line and is in the process of securing funding to do so.
The proposed off-taker (purchaser) of the power generated by Tlou is the national energy utility,
The Mamba project consists of five Coal and CBM PL's covering an area of approximately 4,500 Km2. The Mamba area is situated adjacent to Tlou's Lesedi project and is on-trend with the asset that has produced the encouraging results observed to date. In the event of a gas field development by Tlou, the Mamba area provides the Company with flexibility and optionality.
Independently certified 3P Gas Reserves of 175 BCF are already in place at the Mamba project. The Mamba project is in the exploration and evaluation phase with further operations required on these licences. The next stage of development is likely to be core-hole drilling and a seismic survey of the area. Positive results from these operations could expand the reserves footprint across the Mamba project area.
The Mamba area has the potential to become a separate revenue generating development project in addition to the proposed development at Lesedi, with solar and gas-fired generation a possibility subject to approvals. Geographically, the Mamba project area is approximately 50 Km closer to the
Contact:
Tel: +61 7 3012 9793
In addition to plans for cleaner energy, the Company is also committed to developing community projects in
The Company is listed on the
The project is significantly de-risked. The Company produced its first gas in 2014, has a Mining (or development) Licence valid to 2042 and 10 Prospecting (or exploration) Licences. The Company's project acreage covers a vast area spanning approximately 9,300 Km2 in total.
Tlou's 'Lesedi' and 'Mamba' projects already benefit from significant independently certified 2P gas Reserves of 41 Billion Cubic Feet (BCF). In addition, 3P gas Reserves of 427 BCF and Contingent Gas Resources of 3,043 BCF provide significant additional potential.
The Company is planning an initial scalable power project. Following successful implementation of this first scalable project, the Company looks forward to evaluating longer-term prospects for the delivery of additional electricity to
Forward-Looking Statements
This announcement may contain certain forward-looking statements. Actual results may differ materially from those projected or implied in any forward-looking statements. Such forward-looking information involves risks and uncertainties that could significantly affect expected results. No representation is made that any of those statements or forecasts will come to pass or that any forecast results will be achieved. You are cautioned not to place any reliance on such statements or forecasts. Those forward-looking and other statements speak only as at the date of this announcement.
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