Tlou Energy : OPERATIONAL REPORT – QUARTER ENDED 30 JUNE 2022

25 July 2022

Tlou Energy Limited

(“Tlou” or “the Company”)

Operational Report – Quarter ended 30 June 2022

Highlights

• Transmission line work persevering with and heading in the right direction
• Lesedi 3 and 4 manufacturing wells proceed to stream gasoline
• New goal-constructed area camp underneath building
• Cash place of ~A$7.9m (unaudited) on the finish of the quarter

Projects

The Company has three venture areas in Botswana as outlined under.

• Lesedi Project – Gas & Solar Power Development, Hydrogen and Solid Carbon manufacturing
• Mamba Project – Exploration & (*30*)
• Boomslang Project – Exploration & (*30*)

Lesedi Project

Gas-to-Power venture

The Lesedi Project consists of three Prospecting Licences (PL) and a Production Licence. The first stage of improvement is a 10MW energy era facility which will probably be situated within the Company’s Production Licence space. The Company voluntarily relinquished one PL (PL 35/2000) in the course of the quarter because it was thought of to be of low prospectivity.

Electricity generated on the Lesedi 10MW gasoline fired energy facility will probably be offered underneath a Power Purchase Agreement (PPA) with Botswana Power Corporation (BPC), the nationwide energy utility in Botswana. Once in full manufacturing, 10MW of era may present annual income of roughly US$10m.

Transmission Line Construction

To hook up with Botswana’s energy grid, a 100 km transmission line is being constructed from the Lesedi venture space to affix the grid close to the city of Serowe. Work is underway on this venture and the road is predicted to make use of roughly 650 wood poles and 80 metal buildings. Construction includes excavation, positioning, meeting, dressing, planting, backfilling and compacting, and thereafter stringing, tensioning and regulation. This will probably be adopted by testing and commissioning and finally line energisation.

Progress as at finish of June 2022 is 6% in opposition to deliberate fee of 6%. Work on the transmission line is scheduled for completion in mid-2023, with the substations at both finish of the transmission line anticipated to be accomplished within the second half of 2023. Sale of electrical energy can begin thereafter.

Development Operations Facility

The Company has additionally acquired land within the Lesedi venture space the place work is underway on creating a brand new goal-constructed operations facility together with lodging and related infrastructure required for the preliminary 10MW improvement and to permit for speedy venture growth thereafter.

Gas manufacturing

Tlou’s two manufacturing wells Lesedi 3 and Lesedi 4 proceed to supply gasoline. These wells are dewatering in isolation and gasoline stream charges are anticipated to proceed to extend, notably when further wells are drilled to help with dewatering of the reservoir as a part of a full area improvement. Tlou’s present 2P gasoline reserves stand at roughly 41 billion cubic ft (~7.2m BOE).

Hydrogen and Solid Carbon manufacturing

Tlou is planning the event of a Hydrogen and Solid Carbon venture at Lesedi alongside the Gas-to-Power improvement. The Company’s hydrogen know-how companion Synergen Met Pty Ltd (“SM”), a specialist in plasma torch and pyrolysis know-how, is designing and constructing a prototype unit for cargo to Lesedi. In advance of cargo the plasma torch will probably be examined and configured to optimise hydrogen and stable carbon manufacturing.

The use of plasma know-how for hydrogen manufacturing will probably be a primary for the sub-Saharan area and may very well be advantageous for the manufacturing of low emission, cleaner vitality throughout the area in addition to within the associated fields of waste-to-vitality and waste disposal.

Tlou and SM intend to make use of the hydrogen produced from the prototype to generate electrical energy and presumably as transport gasoline. Solid carbon will probably be made obtainable for regional customers that require the product. World markets for hydrogen and stable carbon or graphite could develop significantly over the medium time period.

SM have postponed their deliberate IPO in Australia and the Company is working with SM to rearrange the subsequent steps to get a prototype unit to Lesedi.

Funding

The first stage of funding in the direction of the development of the transmission line and related infrastructure was acquired earlier this 12 months from Botswana Public Officers Pensions Fund, a protracted-time period supporter of the Company and Tlou’s largest shareholder. Further funding to cowl objects together with substation building, mills, drilling of gasoline manufacturing wells and seismic surveys will probably be required and the Company is actively engaged with numerous events to safe these funds.

Flared Gas Monetisation Trial

Tlou is monetising presently flared gasoline. One probably viable possibility is the mining of crypto currencies and the Company has efficiently accomplished a small crypto mining trial at its area camp and earned some preliminary income, albeit an immaterial quantity.

The trial used extra area camp electrical energy to run crypto mining models to supply Bitcoin. This has established proof of idea and inbuilt-home technical experience. The subsequent stage will contain powering the crypto miners utilizing electrical energy generated from the Lesedi 4 manufacturing nicely, i.e. utilizing gasoline which might in any other case be flared. Thereafter the Company can have a look at growth of the venture all else being equal.

The Company’s main goal stays gasoline and solar energy era and sale inside Botswana adopted by hydrogen and stable carbon manufacturing. Crypto mining is presently solely deliberate to be performed if extra gasoline or energy is obtainable.

EOI with GreenCo Power Services Limited

The 66kV transmission line presently underneath building is predicted to have a capability of as much as 25MW. With 10MW already dedicated underneath the PPA with BPC, the Company has been advertising and marketing the extra 15MW of energy to different potential off-takers. Tlou has acquired an Expression of Interest (EOI) from the main Zambian primarily based

renewable vitality organisation, GreenCo Power Services Limited, the Southern African Power Pool’s (SAPP) solely market participant member, which has expressed curiosity in supporting Tlou to market its surplus energy from the Lesedi venture through the SAPP aggressive markets.

The standing of the Lesedi licences is as follows:

PL renewal purposes are submitted three months previous to the expiry of the present licence.

Mamba Project

The Mamba venture consists of 5 PL’s protecting an space of roughly 4,500 Km2. The Mamba space is located adjoining to Lesedi. In the occasion of a gasoline area improvement by Tlou, the Mamba space gives the Company with flexibility and optionality.

The Mamba venture is within the exploration and analysis section with additional operations required on these licences. The subsequent stage of exploration is more likely to be seismic surveying and core gap drilling. Positive outcomes from operations at Mamba may develop the reserves footprint throughout Tlou’s venture areas.

In the occasion of profitable improvement at Mamba, it’s envisioned that this space can be developed as a separate venture from Lesedi, with the potential for gasoline-fired energy, solar energy, and hydrogen manufacturing.

The standing of the Mamba licences is as follows:

Boomslang Project

Prospecting Licence, PL011/2019 designated “Boomslang”, is roughly 1,000 Km2 and is located adjoining to the Company’s current licences. To date, the Company has not carried out floor operations within the Boomslang space having solely acquired environmental approval to begin exploration actions in 2021.

The standing of the Boomslang licence is as follows:

Forward plan till first income

Note: This ahead program is indicative solely and the record isn’t exhaustive. The plan could change because of unexpected circumstances and is topic to obtainable funds and well timed progress of third-celebration deliverables.

2H22

• Transmission line building (on-going)
• Construct new goal-constructed operational base on Tlou owned property adjoining to proposed energy station
• Flared gasoline monetisation trial (on-going)
• Complete monetary bundle for ahead program to first PPA income
• Buy drilling rig to additional cut back gasoline nicely drilling price
• Seismic survey

1H23

• Drilling and dewatering to stream extra gasoline
• Hydrogen and stable carbon prototype commissioning
• Lesedi Central Processing Plant building
• Practical completion of Transmission Line

2H23

• Installation of electrical energy era (gasoline & photo voltaic)
• Connection of gasoline to mills
• Connect substations
• Commission Lesedi energy station
• First income from electrical energy gross sales underneath the present PPA with BPC

Cash Position

At the tip of the quarter the Company had ~A$7.9m money readily available (unaudited). The mixture worth of funds to associated events and their associates of A$140k for the quarter (proven in merchandise 6.1 of the connected Quarterly Cashflow Report) pertains to administrators’ salaries and costs (together with tax and superannuation funds made on their behalf) and workplace lease.

Shareholder Communications Options

Legislative modifications made to the Corporations Act 2001 (Cth) efficient from 1 April 2022 implies that there are new choices obtainable to shareholders to elect how you can obtain shareholder notices.

These particulars in addition to the Company’s up to date venture montages and company presentation can be found on the corporate’s web site at https://tlouenergy.com/reports