Edenville Energy PLC (LON: EDL) have seen their shares rally after the firm gave confident expectations on Wednesday morning.
In July, the firm gave the market a very impressive update which alluded to record levels of coal production.
The firm said in July “The coal in this area measures collectively at approximately 20 metres thick and up to 40 metres thick in some areas, which is dense compared to previously mined areas with approximately 3.5 metre thickness.”
Again today, Edenville have seemed to pull it out of the bag which has caught shareholder appetite.
Edenville signed two “significant” coal supply contracts for its flagship project, as it announced today.
Further, the company said a second potential investor has expressed interest in providing funding for the project which sent shares rallying
The two contracts, covering coal from Edenville’s Rukwa project in south-west Tanzania, will see the company supply 6,000 tonnes of washed coal per month to a customer in Rwanda and 3,000 tonnes a month to one in Uganda.
The Rwandan company is Tara Group Ltd which is a part of part of Kitanyoe Group Co Ltd which supplies coal, limestone and other natural resources to the sector.
In Uganda, the firm said they will supply coal to Springwood Capital Ltd who also supply comedies to the market.
At the end of November, Edenville said it needed investment from a partner to keep Rukwa going at acceptable levels, and said at the time it was in “advanced” talks with an investor.
Chief Executive Alastair Muir commented: “I would like to acknowledge the project team’s efforts, and particularly those of former CEO Rufus Short, for their groundwork and efforts in making these contracts possible. The project has a significant advantage being the most northerly coal mine in the region by some 700 kilometres.
“I believe these contracts represent an important first step; now Rukwa has to deliver and assuming the required operational funds are secured we should see the mine and plant delivering as initially planned and our goal of becoming cash flow positive being realised. I look forward to providing our shareholders with further updates in due course.”
In the industry, firms have given mixed updates which have seen shares become volatile.
Fellow coal miner, South32 Ltd have agreed to sell a major South African coal unit for ZAR100 million in an upfront payment deal, as the report outlined.
Elsewhere in the wider industry, Eurasia Mining saw their shares rally following progress in their Russian operations. Eurasia reported that it is edging closer to securing the final approval for the Tipil permit, a platinum group metals target located in Russia.
Notably, last week FTSE100 listed Fresnillo saw their shares crash yesterday, after the firm gave a pessimistic annual production estimate.