Aviva Corporation (ASX:AVA, BSE:AVIVA) has followed a conditional agreement to sell its Mmamantswe Coal Project to African Energy Resources Limited (ASX: AFR, BSE:AFR) with a binding agreement for $3.5 million.
This follows confirmation from African Energy that it is satisfied with the results of its due diligence enquiries on the Project and completion of a fundraising by African Energy to finance the acquisition of the Project.
The sale of the Project remains conditional on Aviva's subsidiary Mmamantswe Coal (Proprietary) Ltd being registered as the holder of 100% of the licence under which the Project is operated.
Acquiring 100% of the Licence is the subject of a separate transaction with Mawana Minerals (Proprietary) Limited, the details of which were announced by Aviva on 6 May 2013.
Aviva confirms that all shareholders of Mawana have now approved the sale of the Licence and the relevant Minister in Botswana has been notified of the conditional sale of the Licence.
The only outstanding condition precedent on the acquisition of the Licence is the Minister in Botswana approving the sale of the Licence.
The sale of the Project also remains subject to Aviva shareholder approval being obtained at a shareholder meeting which is expected to be held in July.
Aviva's chief executive officer Lindsay Reed said: "Aviva is very pleased with the progress of these transactions. We will work closely with African Energy and Mawana to complete the remaining conditions precedent as soon as possible and we believe these transactions are beneficial for Aviva shareholders".
Aviva is well funded with $19.4 million cash as at 31 March 2013, and has a strategy to identify and develop early resource opportunities which are well located to demand and infrastructure.
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