Tlou Energy Ltd (AIM:TLOU, ASX:TOU, BSE:TLOU) plans to raise around £5.86mln as it looks to further develop its power projects.
The funds will be targeted towards the drilling of gas production wells, construction of transmission line and substations to connect the Lesedi project to the electricity grid, land purchase and construction of an operations and generation facility, as well as general working capital requirements.
The fundraise will be by way of an entitlement offer for four new shares for every 11 shares held, at a price of A$0.035 per share (around £0.02) and is partially underwritten for £2.75mln by ILC Investments Pty Ltd.
Directors at the ASX, AIM and BSE-listed company focused on generating power in Botswana are participating in the offer with commitments in place for a minimum of A$392,760.
Tlou said operations are continuing in Botswana and gas continues to be produced at the Lesedi 4 production pod and drilling of the next production well Lesedi 6 commenced in April 2023.
The objective is to increase the volume of gas available to the company for power generation. Once Lesedi 6 is drilled and completed, dewatering will commence and thereafter the well should start to establish an indicative gas flow rate.
Lesedi 6 is the first well of a proposed drilling program to expand gas production at the Lesedi power project.
Gas flows from Lesedi 6 are planned to be converted to electricity under a 10MW Power Purchase Agreement once the transmission line, substations and associated electrical infrastructure are in place.
Construction of the 100km transmission lines is well advanced and scheduled to be completed in the coming months while work has commenced on the electrical substations to be built at either end of the 100km line and is expected to be completed early in 2024.