Chariot Limited (CHAR) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Chariot Annual General Meeting. I will now hand you over to Adonis Pouroulis, acting CEO for the formal business of the meeting.

Thank you, Jimmy. Good morning, ladies and gentlemen. Welcome to Chariot's 2021 Annual General Meeting. You're most welcome. How we will handle the proceedings today is twofold. We will start off by going through the formal part of the business. When that is complete, we will give you a presentation on the company itself, giving you an update as to where we are and where we will be going to over the next 12 months. So I'd like to hand over to Julian Maurice-Williams, our Chief Financial Officer, who will take us through the formal part of the business. Jules?

Thank you, Adonis. So welcome to the 2021 Annual General Meeting of Chariot Limited. It's now just past 10 a.m., and so we will commence today's formal part of the meeting. In accordance with the company's articles of incorporation, I, a member of the Board, shall take the chair. Only those who are either shareholders or in the case of corporations present via duly authorized representative or who hold a valid proxy card from a shareholder may attend and vote in the meeting. However, as previously announced, and in light of the current environment, the AGM has been convened remotely with the minimum necessary quorum of 2 shareholders being facilitated by Chariot. Shareholders have been asked not to attend the AGM in person and instead are being advised to attend the webcast to observe the AGM proceedings, receive an update on operations and participate in question-and-answer session at the end. I would like to take this opportunity to welcome shareholders present via webcast. And if there are no objections from the floor, non-shareholders may remain, but may not vote or take part in the meeting. Each resolution will be decided by a show of hands, verified by simple majority and attested by 75% majority unless either before the vote or on declaration of the results always either by the Chairman or at least by 2 shareholders by 1 shareholder with at least 1/10 of the total voting rights. Note the meeting has been made in accordance with the company's article incorporation. The core requirements of 2 persons entitled to vote upon the business to be transacted, each being a member or a proxy for a member or a duly authorized representative of a corporation, which is a member. I confirm that 34 valid proxy forms have been received, representing 84,889,621 ordinary shares, which is 13.3% of the voting capital. I am present as a proxy for 34 members who hold 84,889,621 ordinary shares in aggregate. [ Paul Bressan ] is also attending as a representative of FIL nominee shareholders limited account, a [ FID ] norm in respect to 410,000 ordinary shares. Together with the other members present, I therefore declare a quorum is present and the meeting is properly convened. I will now proceed with the reading the resolutions and give the resolutions as an opportunity to speak about that resolution. So ordinary business, ordinary resolution 1, annual report and financial statements. I propose to receive the statement on account for the year ended 31st December 2020, together with the reports of the Directors of the company and the auditors thereon. I therefore now put the resolution to the meeting as an ordinary resolution. Those in favor? Those against? [Voting]

I declare the resolution carried. In accordance with best practice, I advise that we have received 34 valid proxy cards in favor of the Chairman in respect to the resolution. The votes on these proxy cards are: Total votes, 84,870,206, excluding extension, and that's 484,624,392, representing 99.71%, against 226,467, representing 0.27%, discretionary 19,347, representing 0.02% and abstentions 19,415. Ordinary resolution 2, reappointment of the auditors. I propose that BDO LLP be reappointed as auditors of the company to act as such until the conclusion of the next AGM of the company at which the requirements of Section 257 of the Companies Act Guernsey Law 2008 as amended are complied with and to authorize the directors to fix their remuneration. I therefore now put the resolution to the meeting of an ordinary resolution. Those in favor? Those against? [Voting]

I declare the resolution carried. In accordance with best practice, I advise that we have received 34 valid proxy cards in favor of the Chairman and in respect to the resolution. The votes from these proxy cards are total votes 84,879,406, excluding abstention, and that's 484,591,806, representing 99.66%, against 268,253, representing 0.32%, discretionary 19,347, representing 0.02% and abstentions 10,215. Ordinary Resolution 3, reappointment of Directors. I propose that Robert Sinclair, who retires by rotation be reappointed as a Director of the company. I therefore now put the resolution to the meeting as an ordinary resolution. Those in favor? Those against? [Voting]

I declare the resolution carried. In accordance with best practice, I advise that we have received 34 valid proxy cards in favor of the Chairman in respect to the resolution. And the votes are total votes 84,875,444, excluding abstentions, and that 484,585,201, representing 99.66%, against 270,896, representing 0.32%, discretionary 19,347, representing 0.02% and abstentions 14,177. Ordinary Resolution 4, reappointment of Director. I propose Andrew Hockey, who retires by rotation, being reappointed as a Director of the company. I therefore now put the resolution to the meeting as an ordinary resolution. Those is in favor? Those against? [Voting]

I declare the resolution carried. In accordance with best practice, I advise that we have received 34 valid proxy cards in favor of the Chairman in respect to the resolution. The votes are: Total votes, 84,875,444 excluding abstentions, and that's 484,596,844, representing 99.67, against 259,251, representing 0.31%, discretionary 19,347, representing 0.02% and abstentions 14,177. Now special business. So the final 2 resolutions are the fourth part of the AGM across a special business under the company's articles of incorporation. Albeit that there are resolutions that I put to shareholders at each AGM for approval. The first, these resolutions, Resolution 5 is an ordinary resolution. This requires support of more than 50% of the votes cast to be binding. Resolution 6 is a special resolution, and this requires support of more than 75% of the votes cast to be binding. The purpose of these 2 resolutions is as follows: Resolution 5 is the director's authority to allot up to 190,823,300 ordinary shares, representing 30% of the issued share caps of the company as of the date of the AGM notice was issued without further shareholder approval. This authority is limited to an allotment of shares as consideration for a noncash asset e.g. the shares of another company, a license or a fixed asset. Without this resolution, the directors would have no authority to issue any shares. Resolution 6 gives the directors authority to allot, a, the shares they have been authorized to allot pursuant to Resolution 5, the cash pursuant to a rights issue or other preemptive offer and 127,215,500 of the shares that have been authorized to be issued pursuant to Resolution 5 for cash without making a preemptive offer to shareholders. Note that these resolutions 5 and 6 together only allow the directors to issue a maximum of 190,823,300 shares without requiring further shareholder approval. For example, if after Resolution 5 and 6 are approved at the AGM, the directors issue 100 million shares, buy shares in another company, they can only issue a further 90,823,300 shares of the cash. Finally, approval of base resolution 5 and 6 remain in place up to the earlier of the date of the next AGM or 15 months from the date of the current AGM, after which the approval expires and must be replaced with a subsequent approval. Now that has been explained, I will progress and formally seek approval for these 2 resolutions using the specific language that has been set out in the AGM notice. For the ordinary resolution 5, I propose that the directors of the company be authorized to exercise all powers of the company to allot relevant securities up to the aggregate nominal amount of GBP 1,908,233, this being 190,823,300 ordinary shares of GBP 0.01 each, such authority to expire on the earlier of the conclusion of the next AGM or 15 months from the date of passing this resolution in accordance with Article 3.5 of the Articles of Incorporation. I would, therefore, now put the resolution to the meeting as an ordinary resolution. Those in favor? Those against? [Voting]

I declare the resolution carried. In accordance with best practice, I advise that we have received 34 valid proxy cards in favor of the Chairman in respect to the resolution. The votes on these proxy cards are: Total vote of 84,889,621, excluding extensions, and that's 484,574,245, representing 99.64% against 284,390, representing 0.33%, discretionary 19,347 representing 0.02% and abstentions 11,710. Special Resolution 7. I propose that resolution 5 have been duly passed, the director has been empowered to allot equity securities in accordance with Article 3.7 of the articles as of Article 3.6A of the articles does not apply and subject to the limitations as set out in A and B of the resolution set out in notice of this meeting. Such authority to expire on the earlier of the conclusion of the next AGM of the company or 15 months of the date of passing this resolution. I, therefore, now put the resolution to the meeting as a special resolution. Those in favor? Those against? [Voting]

I declare the resolution carried. In accordance with best practice, I advise that we have received 34 valid proxy cards in favor of the Chairman in respect to this resolution. The votes on these proxy cards are 84,876,068, excluding abstentions, and that's 484,550,402, representing 99.62% against 285,319, representing 0.34%, discretionary, 40,347, representing 0.05% and abstentions 13,553. And with that, we've now concluded the formal part of the Annual General Meeting, and I'll hand back to Adonis to take us through the presentation.

Thank you very much, Julian. So we'll now give you a presentation on Chariot. And can I confirm that the opening slide is on. So again, welcome to our Annual General Meeting. And it gives me great pleasure to tell you a little bit about Chariot and what we've been up to over the last 12 months. The slide that you're looking at the moment is a picture of the Essakane hybrid solar project in Burkina Faso. This is a project that Chariot now owns a stake on in by virtue of its acquisition of AEMP earlier in the year. This project is the largest solar hybrid project on the African continent and one of the largest in the world, and the company that we acquired was responsible for sourcing this project, funding the project, developing the project and now indeed part of the team that runs the project. It has been in operation for just over 3 years, and it is doing exactly what it's supposed to do. And it's comprised, as you can see, they have many solar panels, to be precise 130,000 solar panels and it is the Essakane gold mine that it powers up in Northeastern Burkina Faso. And this is the type of deals that Chariot will start getting involved in as part of its renewable energy push across the African continent. So moving on to the next slide, which is our disclaimer slide, it's the standard slide saying that -- that we'll be making forward-looking statements. And then if we just move on to the following slide where I'd like to introduce the presenters today. Many of you know me now, I'm the acting Chief Executive Officer of Chariot for the last 12 months. And today, presenting alongside me will be Julian Maurice-Williams, Chief Financial Officer; Duncan Wallace, our Technical Director; and someone many of you won't know a new member of our team, Benoit Garrivier. Benoit is the Founder and CEO of AEMP, and Benoit will be talking a little bit about our renewable energy push later on in the presentation. So if we move to the next slide, a year ago, we embarked on a new trajectory, a new direction for Chariot. And with that, we came up with a new mission statement, which is to create value and deliver positive change by investing in projects that are driving this energy revolution that is so thematic today and that appears in our news flow every day, every week. We also decided that we're going to focus on the African continent. And the reason for that is quite evident. If you look at the graph on the left-hand side, you'll see that we have a population in Africa over 54 countries of just over 1.2 billion people. It's expected that over the next 25 years, that 1.2 billion people will surpass the 2 billion people mark. And by contrast, the rest of the world, all the continents and countries either plateau off in their population growth or stay flat. Africa is the only continent that will show considerable population growth. And of the 1.2 billion people that exist on the continent today, 600 million people have no access to any power whatsoever. So we see this as a great opportunity for Chariot to be involved in providing energy solutions to rural communities across the continent. If you look at the bottom part of the slide, you'll see that our business has transformed into really 2 pillars. There's transitional gas and there's transitional power. The transitional gas is our traditional gas business, and the transitional power is really what we bought through AEMP. Both of those pillars feed into one of the values that came out of our new strategy and direction that we take in the business in, which is positive impact. And what does positive impact mean to Chariot? Well, it means that we will not embark on a project that leaves the community, the country or our stakeholders in a worse position than when we started. Everyone benefits by Chariot being involved. And so when we've left the place, the community, the country and the environment is in a net positive. We take our ESG responsibilities very, very seriously. And later on in the presentation, you'll hear from Benoit some of the positive impact we're having on the continent with regards to ESG. Now moving across to the next slide, I just want to give you a little brief summary of the 2 pillars of the Chariot business. On the left-hand side, you can see we have transitional gas which is really underpinned by the Anchois gas discovery that was made in 2009 by Repsol offshore Morocco. It is a proven discovery and we recently raised money to drill an appraisal well which we hope to drill later in the year, and Duncan will take you a bit of that -- through that in a bit more detail shortly. We also announced during the year an MOU with the Moroccan government, which involved the Ministry of Industries and ONHYM partners and ourselves, showing the serious commitment that the Moroccan government has towards developing the first offshore gas field in Morocco. We also announced a tripartite alliance with Subsea 7, Schlumberger and OneSubsea, some of the world's leaders in offshore gas development. And this is a relatively simple subsea development that has been done many times across the world. And when you look at what we have over there and you plug in our 2C numbers, it gives us a net present value discounted at 10% of $500 million and an internal rate of return of greater than 30%. It's a great project. And we look forward to the march towards developing it further with the imminent drilling of the appraisal well. Looking to the right-hand side, you'll see transitional power, the former AEMP, it's now called Chariot Power. And what is this? In essence, AEMP is a renewable hybrid energy business that is in a strategic partnership with Total Eren. Total Eren is co-owned by Total, the giant energy business that we all know very well. And what does the partnership entail? Well, it's an exclusive relationship whereby Chariot and Total-Erin will provide renewable energy solutions to the mining industry across the African continent. We have a right as Chariot to earn up to 15% of any of those projects, which form part of the pipeline, the 500-megawatt pipeline that came along with this deal. So when we bought AEMP, there existed already a 500-megawatt pipeline of deals with Total Eren. And just to put it in context, that's equivalent to the Hoover Dam in North America. And so it's a massive pipeline and opportunity for Chariot to grow into. At the same time, the Pella group of companies also brings with it another opportunity pipeline of around another 500 megawatts. So we're hoping that between now and the end of 2022 to have signed up around 1 gigawatt of power not built, but signed up that we will roll out with our partners, Total Eren. At the moment, the partnership is contained just to the mining industry in Africa. However, we expect and hope that, that partnership will move beyond just mining. Moving along to the next slide. We said that any project we do in Chariot going forward needs to be imminently scalable. And when you look at our gas project and our power project, we believe that there are very scalable projects. As I've just mentioned earlier on, our 2C resources at Anchois give us a net present value of around $500 million. Another way of describing that would be over a 10-year period, we have a net free cash flow of $1.5 billion through that project. But that is just the Anchois gas field. If you look at the Lixus concession, we've identified more than 3 trillion cubic feet of possible resource. And so there's clearly a material upside and scalability in Morocco and in our gas business. If you look at the right-hand side on our transitional power side, I've said we have a 500-megawatt pipeline already with Total Eren. Chariot enjoys a strategic relationship with the Pella group of companies which have mining operations across the African continent, and there's another 500 megawatts over there. So clearly, scalable. And of course, we have a project that is up and running in Northeastern Burkina Faso. So we've done it, and we know that we can build these projects. But if you look at the bottom right-hand slide, you'll see that in 2018, only 1% of renewable power in the African continent came from solar. And there's a huge market to grow into. I mean, the renewable side in the African continent is just starting off. and Benoit will take you through the size of the prize in a moment and to see exactly how big this business could grow into. So clearly, both sides of our business, whether it's gas or power are very scalable. If you look at the map of Africa in the middle there, what is highlighted in red is where Chariot is or has been. But the green parts are where it's sister companies -- sister company Pella has operation. So we pretty much cover Sub-Saharan Africa, and that gives us a great entree into those countries. And I don't believe there's any other company like Chariot that has this type of access, ready access to renewable energy projects across the African continent. And that is a distinct advantage, which we've highlighted before that Chariot can leverage on. I'd now like to hand over to Duncan and to Benoit, and they'll just dive into a bit more detail on the gas business and on the power business. Duncan, over to you.

Great. Thanks, Adonis. So moving on to Slide 7. This really sets the context for the key projects within our gas portfolio. And this is the Lixus Offshore concession that you can see on the map, which is located between Tangiers and Casablanca on the Atlantic coast line of Morocco. Within that license area is the Anchois gas discovery, about 40 kilometers from the coast. And the key thing about any gas development, especially one in an emerging economy such as in Morocco is having access to a scalable and attractive gas market. And that's one of the really fantastic things about our Moroccan portfolio in the Anchois gas field. As I mentioned, it's just off the coast of Morocco and directly inward between Tangiers and Casablanca is the main industrial area of Morocco, representing about 62% of Morocco's GDP from that coast line. So clearly, with our imported energy in Morocco of over 90% of their energy needs, the opening up and development of a natural domestic resource is extremely well placed to start to feed that domestic market. That has been demonstrated with our MOU, which we've signed with the Moroccan government. That's the Ministry of Industry and Ministry of Energy that is focused around the delivery of a cheaper and cleaner energy source to promote economic growth in country. And clearly, the gas from Anchois has the potential to be a key part of that strategy. What we also enjoy in Morocco are high established gas prices, so between $8 and $11 from the power to industrial sectors, which have been announced by others in country. And also to help to incentivize investment in the E&P sector in Morocco, we have famously excellent fiscal terms. So we have a low royalty rate and we have a 10-year corporate tax holiday that we enjoy in the country. And that in part helps to deliver the very strong economic value from the project, as Adonis has already described the high NPVs and internal rates of return of over 30%. And what we also have on our doorstep is the Maghreb-Europe-Gas Pipeline, which you can see in red on the map. That is a major trunk line taking Algerian gas into Spain and feeding existing CCGT power plants within Morocco. So we can access that pipeline, which gives us the ability to also sell gas into the European market via that Spanish interconnection. So we've got a variety of markets at different scales, and they underpin a very attractive project. What is also excellent are the ESG credentials, which are becoming increasingly important in the sector. This project has the potential to increase security of supply to Morocco. It's highly dependent upon energy imports to promote economic growth in country with cheaper and cleaner energy. And if you look at the chart on the lower right, you can see that despite admirable investments in renewables in country and being a leader in Africa in meeting its obligations under the Paris accord, in 2019, Morocco produced 67% of its power through coal. So by replacing legacy coal plants with gas fired power generation, we can make a material reduction in the CO2 footprint for power generation in country. If we move to the next slide, Slide 8. You can see the subsurface description of the Anchois gas field. On that cross-section, you can see the Anchois one discovery well drilled in 2009, discovering 55 meters of net gas pay in high-quality reservoirs across the A Sand and the B Sand. The reservoirs are 25% to 30% porosity over a darcy permeability and with very good gas quality. So 97% methane and no impurities, such as CO2 or H2S. That means we have a very high degree of confidence in the ability of any producer well to produce at high rates. And also the good gas quality means that we can use standardized equipment and materials, which can reduce development costs and get us to first gas as quickly as possible. What we've done on this license area is to reprocess all of the existing seismic data, including the 3D seismic in 2020 and performed a reevaluation of the subsurface. And through that work, we've identified additional exploration prospective upsides within Anchois. So the Anchois best estimate resource is now just over 1 Tcf. You can see on the seismic inset and the cross-section in Anchois, that's the C, the M and the O Sand. They're inherently low-risk exploration objectives. The C Sand is audited to have a 64% chance of success, for example. So the planned investment, which is now funded is the drilling of the appraisal well on Anchois. And essentially, that has 3 objectives. It's to be a low-risk appraisal well to unlock the development of the AMD Sands by drilling close to the original well and to confirm reservoir productivity for the future producers. So that's objective number one, to unlock that development. Objective number 2 is to reuse this appraisal well within a subsequent development as a producer, therefore, avoiding duplication of CapEx. And then finally, to deepen that well through into some of those prospective gas sands, the CVM and the O to unlock additional resources to allow longer-term growth from the asset. Our preparations for that drilling are well underway. We recently announced that David Brecknock has rejoined the team as Drilling Manager. He -- we've ordered all the long-lead items, and we were in negotiations on a rig contract to allow drilling of that well to commence in late 2021. The next slide, Slide 9, shows what a subsequent development could look like at Anchois. On the cartoon, you can see the subsea to shore development concept which is ideally suited for the Anchois gas field given its bathymetry, its distance from the coast and the excellent subsurface conditions that we have at Anchois that allows us to consider a simple and standardized development. And we've been through pre-FEED studies already with the Xodus group, and we recently signed the development collaboration agreement with the Subsea Integration Alliance being OneSubsea, Schlumberger and Subsea 7. And the motivation and the objective behind that is to fast-track the project and to get to first gas as quickly as possible, potentially in the second half of 2024 could be when we could be online with this project. Post FID, the development CapEx is in the order of $300 million, at 70 million cubic feet a day that could be repaid within 2 years. We have also announced the expressions of interest to a debt finance project from the Africa Finance Corporation, so a Pan African investment fund with about $6 billion of assets in management and specialization in the energy sector and also a large European multinational investment bank who are specialists in RBL financing and would look to lead the financing of the project. That not only -- that interest not only underpins the attractiveness of the project, but also Morocco as an investment destination, it is an Tier 1 country within Africa to invest. And finally, on this slide, we will look to continue to strategically partner on the asset prior to FID. And potentially with Moroccan players where possible, we think it's beneficial to align ourselves in country, it being fundamentally a project that's going to be founded on the domestic gas market. Moving on to Slide 10. This shows some of the very exciting upsides beyond the Anchois gas field. So the map on the left-hand side shows the Lixus Offshore license. The Anchois gas field is shown in red on the left-hand side, and that's the 361 Bcf of 2C contingent resources already discovered. The other polygons that you can see on there are the prospect portfolio within the same Mio-Pliocene gas play as Anchois. And those opportunities have been described using a calibrated seismic data set and it's inherently a low-risk portfolio of gas prospects because we use the characteristic seismic signature of the gas-bearing sands at Anchois to identify and to derisk these prospects. The latest independent assessment has that portfolio at around 3 Tcf. That was from Netherland Sewell, their assessments in 2019 and 2020. And since the completion of their latest estimate, on that new seismic data we have now added an extra 1.5 Tcf of prospective resource potential, as you can see on the chart in the center. So once Anchois is on stream, we have our export flow line from Anchois to the coast, this portfolio is a low risk, but very high value set of potential upside gas resources that could be developed at relatively low cost by exploiting the development infrastructure from Anchois. So it gives us a real long-term resource base for growth here. The other upside that we have in country is shown on the map on the right-hand side, which is the Rissana Offshore area, which completely surrounds Anchois and captures the full extent of this offshore Mio-Pliocene gas play related to Anchois, and it also captures legacy prospects from the Mohammedia & Kenitra areas, which are fully covered by 3D as well. We look forward to completing that and having that license awarded in the second half of this year, and we secured a very attractive set of opportunities here for a minimal 2D seismic commitment. So in the gas side of the business, we have a very strong foundation in the Anchois project, lots of exciting and low-risk upsides within the portfolio and we'll continue to look for value-accretive opportunities in gas in Africa and also synergies with the power side of Chariot's business. So with that, I'll hand over to Benoit to describe the power business in more detail.

Thank you, Duncan. So let me present the business of AEMP, which is now becoming Chariot's transitional power. So we are an independent power producer focused on Africa. We target large bankable private customers, mainly mines and industrial clients across the continent. Our business consists in originating, building, owning and operating renewable or hybrid power plants that sell electricity to our customers over a long-term contract. So for example, it could be a mine operating off-grid and powered by a diesel power plant and the mine wants to add solar generation to decrease its cost and CO2 emission. We will look at the maximum PV penetration that we can have in order to maximize its savings, the optimal size of the battery to provide spinning reserve to a system to ensure that the system is stable, whatever happens. We build an order plant in the client space for 80-megawatt hour that we sell. AEMP has an exclusive partnership for mines in Africa with the French IPP Total Eren, part of the Total group. And under this partnership, Total Eren pays the development cost of the project that we originate, pay the service fee to AEMP for the development service we provide, and we have the right to invest 15% in the project and to receive also success fees on the project completion at financial close. So AEMP is now joining the Chariot family, and we now trade using the name Chariot Transitional Power. Obviously, we have discussed the transaction with Total Eren to make sure they're happy to continue working with the same team in the new Chariot entity. And they are, unlike us, they understand the opportunity. If you look at the map on the right, you will see where AEMP has currently transaction in its pipeline, the green spot. And this transaction are materialized by signed memorandum of understanding. We have the Chariot management through the holding pillar, has stakes in operation that could be added to the pipeline. It's obvious and together we more than double our reach across the continent, and it gives us great confidence in our capacity to capture a larger portion of the market, grow our pipeline and ultimately convert it into projects in operation. Moving on to the next slide. Let's say a few words about the size of the market. So according to the World Bank, mining and large industrial clients represent a demand of about 20 gigawatts in Africa. This is equivalent to about half of the U.K. power market. So that's a very large market. And most of this demand is yet to be transitioned to cleaner energy, and therefore, a pipeline of about 500 megawatts represent less than 1% of this demand in terms of energy consumption. So the potential for growth is huge. We are at Chariot absolutely convinced that the time for renewable energy in Africa is now for the following results. The solar power generation has become the cheapest option in most of the countries where we operate, is cheaper than grid power for the mine connected to the grid in the southern part of Africa. And it's obviously cheaper than the thermal generation for the mine of grid, particularly in West Africa. It's not cheaper than pretty much any other alternative for new generation capacity. And secondly, and even more importantly, the investors are more and more expecting the mines to increase their ESG performance. In order to attract investment and funding from banks, company are under pressure to reduce their environmental impact, including carbon footprint and water use and improve their so-called license to operate by creating value for local communities. In fact, climate is now listed as the main risk for mining operations. So increasingly, for these 2 reasons, energy savings and ESG performance, we see mining clients considering using renewable power. Let's look on the right-hand side of the slide, at a numerical example and consider a 50-megawatt solar project. So for this project, the total cost will be around $50 million, could be slightly more depending on the size of the battery that we add to stabilize the generation output. As such project will be financed 70% by project debt, nonrecourse to the equity and 30% by equity or shareholder loans. We will leverage on Total Eren relationships with banks and balance sheet to obtain the project financing at the best market conditions. Assuming Chariot's stake of 15% of the equity in this project, the investment will amount to $2.2 million. In these typical transactions, the power generated by the PV plant will be sold to the offtaker on a take-or-pay basis, meaning that everything that is produced is bought by the mine, over 10 to 15 years, depending on the life of mine and normally, we peg the maturity of the transaction to the life of mine. Working with Tier 1 EPC company providing guarantees and performance will limit the execution risk. And the project will also contract insurances, including political risk insurance when necessary so that the financial risk is also limited. Project will generate revenues of $10 million to $30 million with an EBITDA of between $8 million and $11 million per annum. We target approximately 15% return post tax and withholdings on the equity in hard currencies. And we have some additional upside options typically on this project. First, the mining, life of mine could be extended as more discoveries are made within the mining lease. The mining load could be increased, leading to a second phase of the project. And last, there could be the possibility to connect the project to the grid post life of mine, extending and sometimes doubling the life of the project. A well-maintained PV plant can work perfectly for 25 years and even more. So from the signing of the added term with the clients, the typical development time will be 6 to 12 months, and that's the time necessary to drive the contract, obtain the financing, permits and authorization and construction time, depending on the size will be 6 to 12 months. Our goal is to create a constant flow of projects by adding a large pipeline at various stage of development in order to have continuously new projects added under construction and under operation. Moving on to the next slide. Let's have a look at project under operation, and we see a picture of project at Essakane in the Northeast or Burkina Faso. It provides power to the IAMGOLD gold mine. The mine is also powered by the 55-megawatt Wartsila power plant, running on heavy fuel oil and the PV ant is replacing some of this polluting heavy fuel consumption with clear solar energy. On the fuel item below represented the various steps that were necessary to bring this project to life. And the Chariot's team was particularly involved in the origination of the project at the mine, the design of the PV plant, which is fully tailored to the mines requirement and its configuration of the thermal plant and also the operating philosophy to make sure that the system is stable. We were the one obtaining all the necessary local authorizations and permits and this project was, in fact, the first independent power producer in Burkina Faso to sell to a private customer. This has been a very successful proof of concept and a very good showcase. On various occasions, we have invited mining clients to visit the plants and discuss with the people operating the thermal plants. And otherwise, we see very positive feedback. They always were convinced that the system was stable, and this has brought more business to us. Last, I'd like to say a few words about the sustainability of the Essakane project. So we have registered the project with the UNFCC, and about 18,000 certified emission reductions are credited every year, proving that the project significantly reduces the amount of CO2 emitted by the mine. The project also benefits to local communities. All employees at Burkina including the management, 95% come from the local communities and 25% of the employees are women. In addition, the project spends 1% of its income to fund community development activities. And in the first 2 years of operation, we have helped fund a new school, distributed solar kits and participated in a successful tree planting campaign. We also sponsored a few students at the University in Ouagadougou. And we continue to do so for the next 13 years of the life of mine and maturity of this project. The project contribution to sustainable development has been recognized by the 2019 Towards Sustainable Mining Excellence awards, and we are very proud of that. So as a conclusion, we believe that the success of Essakane clearly shows the market potential for competitive low-carbon energy solutions for mine. And as part of the Chariot family, we'll now replicate this model across our pipeline. And in order to create a diversified portfolio of projects providing long-term predictable EBITDA for the company. And I will hand over to Julian.

Thank you, Benoit. If we now turn over to Slide 14. So this slide shows the busy and exciting anticipated time line at Chariot. The top half shows the time line for transitional gas and the bottom half shows the transitional power. On transitional gas, we're now full steam ahead on drilling that appraisal well. And the last time we operated a well we drilled it within a 6-month window of raising capital. We're using the same team, and we're already in detailed negotiations on rigs. And as Duncan has already said, we've seen effectively 3 types of wells in 1 operation, an appraisal, a producer and an exploration well all in one. And as shown by our recent announcements, we're already well advanced with project finance, development plan and gas sales. And so there is a clear track to those material cash flows. On the bottom half, on transitional power, we've now completed the acquisition of AEMP, and we brought that operating Essakane project into the Chariot fold that Benoit spoke about. We also anticipate the next project will close late this year with operations to start early in 2022. And overlaid on this is a significant further pipeline of projects, which we look forward to announcing as they progress. And it is our intention to look for other investments within the African energy transition space, which will add further to the narrative. And this may include investments in areas such as hydrogen and batteries but only if they are value accretive and only if they add to the Chariot's story. So our aim is to be an exciting, different and busy stock with lots of news flow, and we're not going to be shy about telling the market about our progress and our growth. Now we turn to the next slide, Slide 15. So in summary, we believe that we are a unique and sustainable business opportunity in the energy transition space. What we have is a high-value transitional gas and transitional power business with immediate or near-term cash flows and numerous additional tributes that are scalable and is going to make us an exciting and relevant business over the longer term. We want to use those cash flows to both return cash to shareholders, but also to invest in additional exciting and different energy transition projects, while ensuring that we make a positive impact on the environment, the communities and the countries where we operate. I'll now hand over to Adonis to finish.

Thank you, Julian. Moving to the next slide. The last 12 months have been a very busy 12 months for Chariot and indeed, the company is totally different to a company to where we were looking back a year ago. One of the things that came out of our strategic review in deciding where the company should go with this, what we called our value wheel and you see it there in front of you. And it's really underpinned by the 5 principles that you see there. And have we lived up to what we promise ourselves in our mission statement, which is creating value and delivering positive change by investing in this energy revolution. Are we a positive impact on the environment, community, employees and our shareholders. And I think, whilst we've got a long way to go, we certainly made strides in that direction through our investments in renewable energy. Our MOU that we announced with the Moroccan government indicates a new type of collaboration that we're embarking on with our host countries and again, with the communities in which we operate. This will grow further. We strive to operate with integrity, and I believe our technical teams on both the gas side and the power side, the renewable side, are performing some of the best work that we can see on the continent. And we have great faith in rolling out our gas strategy and our renewable strategy. We're transparent, and that's coming as bearing fruit in the relationships we are further developing on the continent. Are we pioneering enough? Well, I think our departure from the original business model shows that. And again, the drive into renewable energy is a big move for us but a move that we think is absolutely necessary and makes economic sense for Chariot. And there will be further pioneering moves that we will make going forward. And again, we try to do all of this with respect and dignity to those that we engage with, again, I repeat it to the communities, the countries that we operate in and we try to be as open and transparent as we do, and we'll continue to operate in this manner. And so I thank you very much for listening to our Chariot story. And I believe now we will be taking some questions that you may have asked.

Yes. Thank you, Adonis. Thank you to everyone for sending through their questions. If you don't hear your question, read out word for word, it is because we can some of them to avoid repetition. However, if anyone has any further questions after the call, please don't hesitate to get in touch with Celicourt Communications, and we will endeavor to get responses back to you in a timely manner. First question, what is the status of the rig tender process? And when is the rig contract expected to be announced?

Yes. Thanks, Jimmy. So we are -- as I mentioned in the presentation, we are in those rig negotiations. Things are going well. And it puts us in a place to be able to conduct operations as we've previously indicated, so to commence by the end of this year. So things are on track.

In the case of a gas discovery in both the appraisal target and the deep exploration target, is there any plan to conduct a flow test?

Yes. So at the moment, our plans for formation evaluation of the appraisal program are to focus on downhole or subsurface data acquisition. But that is going to be to analyze and to confirm the reservoir quality, so the porosity and permeability, the pressure measurements that are needed, downhole and sampling. And through that, we think that we'll get a very good confirmation of the excellent reservoir characteristics that we have and also a very robust prediction of the productivity and deliverability of any producer wells. So that's our focus at the moment. So we don't believe that a traditional surface flow test would be required necessarily on the assets. We're focusing on downhole data acquisition.

Understood. Since the company is fully funded for this drill, is there a chance of partners still coming in for it?

Yes. No, it's a very interesting comment. And I think now that we are funded to drill, it puts us actually in an extremely good position when it comes to partnering negotiations. We're in a much stronger position now and gives us much more flexibility around the scales of investment and the types of partners who might join us in the opportunity. So our data room remains open. And is active, and we're encouraged by the interest and the opportunity that we've seen from third parties. So we will be looking to bring in, as I mentioned, strategic partners into the asset prior to FID and potentially prior to drilling, but they will be partners who will be strategic partners who will bring more to the asset than solely a financial contribution.

What is the plan for development, either the company plans to go it alone? Or will it wait to sign a partner?

Again, we're in a position of strength now. And so bringing in a partner -- strategically aligned partner would make sense ahead of that final investment decision and moving through into a development. But we've positioned ourselves with strong partners, for example, under the collaboration agreement with the Subsea Integration Alliance. And we believe that to continue ourselves as a major equity holder and operator. That's something that we are in a position to be able to execute that as operator, but obviously partnering, if it makes sense, is something that we will look at.

When is the license award expected for Rissana and what is the potential for there being a gas prospect on that license?

So if I deal with the license award process, so that is progressing well. All the key documents have now been agreed. It's going through a sort of formal administrative process, and we expect the formal award of that license to occur before the year-end as we previously stated in the announcement when we announced the key terms have been agreed. And on the gas prospect activity, Duncan?

Yes. Thanks, Jules. So the Rissana license had a mixture of data. So the 3D seismic data that covers Lixus and the Anchois gas field also extends north outside of the Lixus area into Rissana. And we can see similar gas prospectivity that's been identified on Lixus extending into the Rissana area. So there's an extension of the same gas play. We don't yet -- we don't have the license fully awarded yet. So we don't yet have a portfolio ready to describe that work will materially happen, once the license is with us. As I briefly mentioned earlier, the Southwest corner of Rissana also has some of our legacy prospects that are also covered by 3D seismic. So those were from the Mohammedia & Kenitra areas and those also fall within the Rissana area. So we have diversity of plays going from the mine of licensing gas play, but also some gas potential within those large Jurassic prospects that we had in our legacy portfolio as well.

Why have we been not able to find a partner to drill Anchois? And have we had any offers that have been declined?

Yes. As we've said earlier in the year and the end of last year there have been seen some offers on the table for farm into Anchois. They were unacceptable we felt for the Chariot shareholder. As Duncan has said, people are still in our data room still looking. We're in a much better position now, I believe, to do a deal that is really in the best interest of Chariot shareholders.

Did Chariot intend to relinquish or sell any of their interest in Namibia or Brazil?

As we've said before that our Namibia and Brazilian data rooms are still open. We're looking to partner those assets. There seems to be a lot more interest in Namibia due to sort of upcoming wells to be drilled there. And we still remain hopeful that we will be able to partner these concessions out. But I must stress that in line with the new direction that Chariot's taking, this is not a focus of our business today.

What level of proven discovery is required to satisfy potential partners.

Yes. So the contingent resource assessment that we have at Anchois done by Netherland Sewell last year gives us a one fee volume of 201 Bcf of resources. So once the estimate is the P90 or a 90% chance of success, that 201 Bcf is an economically viable and economically attractive development in its own right. So anything north of that 1C number will simply bring additional value to the company. So the 1C resource of 201 is still a very exciting project if that is what is delivered by the well. But we feel very confident that the appraisal drilling will deliver more than that in unlocking the 2C resource at the AEMP Sand and also in evaluating and hopefully proving up the upside in these additional gas sands.

How will the drilling updates on Anchois be released, I think it is a multi-target drill. Previously, we have had very little drilling updates until the completion of the drill.

We will update the market on a regular and appropriate basis, starting when the rig contract is signed and when operations progress, and we'll look to update the market both through RNS and through videos and through other means as the year progresses.

Roughly how many tenders do we have for the rig contract? And when do we estimate the rig contract being signed and the rig mobilized?

Yes. I mean I can't really give any details around the numbers of companies who participated in that tender process only to say that we've followed industry best practice in the contracting strategy. The request for tender. So we have gone out to the full market potential rig providers for the opportunity. And as I say, we are in negotiations on the rig for the project.

In the recent placing, it was communicated by the Board that new institutions took stock. However, to date, there have been no new TR1s issued. Who are the new institutions and why have we not seen any TR1 notification?

Yes. Well, it's not the obligation of the company to announce the TR1 notices. However, I will say that for the first time in many years, Chariot managed through this recent fund raise to bring new institutions on board, substantial institutions and it's sticky money. It's there for the long haul. And so we're very happy with the progression of our shareholder register. And we hope as we roll out the gas strategy and the renewable strategy to add new and additional institutions. But I must stress it's the first time in a number of years that we have an institutional shareholder list in the company.

If Chariot do once again drill alone at Anchois, what are the provisions in place for potential drilling problems, i.e., equipment failure, geological, different whole issues, et cetera?

Yes. We are -- well, the last operations that we performed in Namibia in 2018, the nearest offset well was around 100 kilometers away, and we were drilling in a frontier environment. Through the planning that was put in place and the detailed operational procedures, we were able to carry out that operation in a remote location significantly ahead of time and under budget. So that was Namibia in 2018. In this instance, in Morocco, we will be drilling in close proximity to a well that was drilled in 2009. So we have really good control point to understand the subsurface conditions and to plan the well for efficient and safe operations. So first things first, I think it's all about planning an appropriate well and having ready all the contingencies that are necessary. So we're focused on that.

Please, could you give an indication of the key milestone dates for the development of Anchois, including commencement of FEED study, FID and first gas?

Yes. So what we've looked at in terms of time line is post the appraisal results potentially reaching FID within 6 months or so following the final results from that well. And then we see around a 2-year time post FID before we can get to the first gas. So potentially FID within 2022 and then first gas to market by the end of 2024. With the collaboration agreement and the alliance with the SIA, we're also looking at ways in which we can achieve that time line or accelerate certain parts of that time line through acceleration of FEED studies for standard equipment, for example. But it's something that we see as important. There's a really window of opportunity to capitalize the value of the asset in Morocco within this time line. And that's what we focused on is delivering first gas as quickly as possible and delivering values from the project.

When do we expect the actual spud will take place on Anchois?

As I say, we're on track to commence drilling operations by the end of this year. But that will be updated once we have a more accurate time line for the potential start of operations.

What exactly did the CFO mean by a 10x share event and given the share price performance since does he now consider this misleading?

Thanks, Jimmy. So first of all, I stand by that statement. I believe we are -- and we all believe that we are a unique and excited proposition both for existing and for potential new investors. We now have 2 very high-growth business streams. We have our gas business, but we now have a funded appraisal well. And when it gets on to that production, it should be throwing out material amounts of cash. And we now obviously have the power business with Benoit and his team. We have that strategic partnership with Total Eren, where we are targeting an enormous power market in Africa, and we look forward to announcing those projects as we can. And I think we have a very exciting period ahead. And as I said before, we're not going to be shy about getting out there, banging the door and making sure that our shareholders get the price that they deserve.

Just to add to what Julian has just said, as I said earlier on in the presentation, we decided to take on projects that are scalable. And if you look at our Gas business and if you look at our Power business, both of them are incredibly scalable businesses. And you could see them growing in size by several factors.

You mentioned the value will be returned to shareholders. When will that be? And in what form will it take?

So the value back to shareholders could be in the form of a shareholder return, an increase in the shareholder price. And obviously, through dividend flow eventually. What we are excited about is we have the Anchois gas field that could come into First Gas at the end of 2024, 2025, beginning of '25. And that shows and kicks off material cash flow from there. At the same time, we really have some cash flow coming from our Essakane solar project in Northeastern Burkina Faso, whilst it's moderate at the moment, as you heard earlier in the presentation, we expect to roll out several renewable energy projects. And once these are built, they require very little or no CapEx going forward, and they just spin up cash thereafter. So we expect our renewable energy business to not only be self-funding in the years to come, but to be able to return excess cash to shareholders as well as our gas business.

And the final question, which I can answer, when will the AGM presentation be available on the website? It is on the website at the moment under the Investors section in the Presentations tab. And with that, there are no further questions. And so I will bring to a close today's Annual General Meeting Call. I would like to thank investors for their time. Apologies one final question. It is important to inform the market about upcoming projects through a PR campaign. Is there any plan to ramp up a campaign about the Anchois drill?

As we've said again, we are going to keep the market informed regularly and often, and bear in mind all the rules under which we operate being a public company.

Thank you, Adonis. And with that, there's no further questions. So we'll bring today's call to an end. Thank you, everyone, for joining.

Thank you.