Bots’multi-billion coal project sale completed
Gaborone – African Energy has completed the acquisition of the 1.3 billion tonnes of Mmamantswe coal project in Botswana from Aviva Corporation after the latter's shareholders voted in favour of the transaction.
Aviva needed shareholders’ nod for the sale to proceed.
The company announced in April that it had entered into a conditional agreement with African Resources Ltd to sell the Mmamantswe coal project.
Aviva’s CEO, Lindsay Reed, said her company believes consolidation of coal resources in Botswana is important for the development of the coal sector.
She said the transaction enhances the sector development for African Energy and Botswana.
The announcement comes shortly after Aviva’s wholly owned subsidiary, Mmamantswe Coal Ltd became the registered holder of 100 percent of the prospecting license under which the Mmamantswe coal project is operated.
With the completion of the deal, African Energy has secured the rights to 3.8 billion tonnes of coal in the country.
The approval also paves the way for African Energy to raise a further US$3.2 million from Sentient Executive GP, IV, via the issue of a further 29.16 million shares at US$0.11.
Proactive Investors said, in a statement, that “African Energy will now broaden its project portfolio.
It already owns Sese Coal Mine, which is poised to be one of the largest and lowest cost coal producers in Africa, with ready access to transport infrastructure.
African Resources had earlier raised US$4.6 million through placements with Sentient, with the two trenches increasing the working capital to around US$6 million from capital raised.
Sentient will also receive an additional 3 541 667 shares in African Energy as a Placement Fee on its entire US$7.8 million investment and will become 17.4 percent stakeholder in the company.
The coal project is located 70 km north of Gaborone, and is on the South African border.
Aviva identified a large coal resource of 1.3 billion tonnes, including a probable ROM reserve of 895 million tonnes.
According to Aviva’s Press statement, a study completed by A&B Mylec Pty Ltd in February 2011 demonstrated that the project could yield two product streams ‑ 200 million tonnes of export grade thermal coal, and 100-150 million tonnes of domestic power coal capable of supporting a 300 MW domestic power plant with a mine life of 60 years.