Aviva Corporation (ASX: AVA) is a step closer towards completing the $3.5 million sale of the 1.3 billion tonne Mmamantswe Coal Project in south east Botswana to African Energy Resources (ASX: AFR, BSE: AFR).
This comes after it received Ministerial approval for it to be the registered holder of 100% of the licence under which the Project is operated.
The only condition that remains outstanding is Aviva shareholder approval for the deal at a meeting schedule for 9 July 2013.
"Aviva is pleased to have obtained Ministerial approval satisfying another condition precedent to the sale of the Mmamantswe Coal Project, and completing the purchase transaction with Mawana," chief executive officer Lindsay Reed said.
"Aviva believes consolidation of coal resources in Botswana is important for the development of the coal sector. The transaction is a good outcome for Aviva shareholders, but also enhances the sector development outlook for African Energy and Botswana."
Acquiring 100% of the Licence was the subject of a separate transaction with Mawana Minerals. Under this transaction, Aviva will now make a further payment of US$270,000 to Mawana following an initial payment of US$30,000 in May 2013.
The Mmamantswe Coal Project is in south-eastern Botswana, and comprises a Measured and Indicated Resource of 1.3 billion tonnes of thermal coal, including 895 million tonnes of Probable Reserves.
A 2009 Scoping Study completed by SRK concluded that a 10 million tonnes per annum open-pit mining operation could produce 2.4 million tonnes per annum of washed export coal (22MJ/kg, <20% ash) and 2.1 million tonnes per annum of middlings suitable for power station fuel (15.3MJ/kg, 38% ash) at a ROM (run-of-mine) cash cost of $9.10 per tonne.
An EIA was approved for the project by the Government of Botswana in October 2012.
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