Tlou Energy Limited is developing power solutions in Sub-Saharan Africa through gas-fired power, solar power and hydrogen projects. The company is listed on the ASX (Australia), AIM (UK) and the BSE (Botswana). The Lesedi Power Project ("Lesedi") is the Company's most advanced project. Tlou plans to develop gas and solar power generation assets at Lesedi with electricity to be sold into the local power grid.
Project Areas
The Company has three project areas in Botswana:
· Lesedi Project - Gas & Solar Development, Exploration & Evaluation
· Mamba Project - Exploration & Evaluation
· Boomslang Project - Exploration & Evaluation
Lesedi Project Area, Botswana
Licences: Production Licence 2017/18L, Prospecting Licences 001 & 003/2004 and 35 & 37/2000
Ownership: Tlou Energy Limited 100%
The Lesedi project covers an area of approximately 3,800 Km2 and consists of four Prospecting Licences (PL) and a Production Licence. The Production Licence area is currently the focal point for the Company's operations and includes the Lesedi production wells or 'pods'.
Lesedi is the Company's most advanced project. The Company plans to commence work on the development of the Lesedi project as soon as possible. Key stages to achieving first revenue are as follows:
· Construction and installation of an overhead transmission line and substations to connect Lesedi to the existing power grid
· Installation of generation assets at Lesedi
· Commissioning and testing
· Sale of first power
In order to complete the above, the Company is currently working on two key aspects of the project. Firstly, negotiating a 10MW Power Purchase Agreement (PPA) with Botswana Power Corporation (BPC) and, secondly, securing project finance.
During the quarter, negotiations in relation to both the PPA and funding have significantly advanced. The Company is bound by confidentiality and therefore cannot expand further at this point in time, however it is looking forward to bringing both of these key matters to a conclusion as soon as possible. However, as stated previously, the timing is unfortunately outside Tlou's control.
The initial development of Lesedi is planned to be up to 10MW of gas-fired power. A 10MW project could generate annual revenue of approximately US$10m. Once the first 10MW is in place, the project can rapidly expand.
The status of the Lesedi area licences is as follows:
Mamba Project Area, Botswana
Licences: Prospecting Licences 237-241/2014
Ownership: Tlou Energy Limited 100%
The Mamba project consists of five Prospecting Licence s covering an area of approximately 4,500 Km2. The Mamba area is situated adjacent to Lesedi. In the event of a gas field development by Tlou, the Mamba area provides the Company with flexibility and optionality.
The Mamba project is in the exploration and evaluation phase with further operations required on these licences. The next stage of exploration is likely to be core hole drilling, with the drilling of core wells using Tlou's drilling rig already planned. Positive results from operations at Mamba could expand the reserves footprint across Tlou's project areas.
In the event of successful development at Mamba, it is envisioned that this area would be developed as a separate project from Lesedi, again with the potential for gas-fired power, solar power and hydrogen production.
The status of the Mamba area licences is as follows:
Boomslang Project Area, Botswana
Licence: Prospecting Licence 011/2019
Ownership: Tlou Energy Limited 100%
Prospecting Licence, PL011/2019 designated "Boomslang", is valid for an initial term of three years. The licence area is approximately 1,000 Km2 and is situated adjacent to the Company's existing licences.
To date, the Company has not carried out ground operations in the Boomslang area having only received environmental approval to commence exploration activities earlier this year.
The status of the Boomslang area licence is as follows:
Hydrogen
In addition to gas-to-power development, the Company is planning solar generation, as well as the production of carbon-neutral hydrogen. During the quarter, the Company entered into negotiations with a potential hydrogen project partner. Tlou is well-positioned to produce hydrogen in a relatively short time frame. The Company has large and proven resources to develop these products, including methane for carbon and hydrogen, readily available water for hydrogen and oxygen, and CBM / solar power to drive the process.
Orapa Gas Supply Tender
The Mamba project area is the Company's closest to the Orapa power plant, which provides power to the Orapa diamond mine - one of the largest diamond mines in the world. Earlier this year, Botswana Power Corporation issued a tender for supply and delivery of natural gas to the Orapa 90MW power plant. During the quarter, Tlou made a submission in relation to this tender.
