African Energy Resources (ASX: AFR) has announced that the Minister for Minerals Energy and Water Resources in Botswana has approved the transfer of title of the Mmamabula West prospecting licence to African Energy Resources Ltd.
This satisfies the completion requirements of the Mmamabula West Sale Agreement.
Under the terms of the Sale Agreement, African Energy will now make a US$1 million cash payment to Asenjo Energy. A final cash payment of US$1.5 million will be made to Asenjo Energy once a retention licence has been granted over the project in mid-to late-2014.
Mmamabula West contains 892 million tonnes of Indicated Resource and 1,541 million tonnes of Inferred Resource at an average in‐situ raw CV of 4,800kcal/kg (20.1 MJ/kg).
Through completion of the transaction, African Energy has increased its total in-situ resources to over 6.2 billion tonnes of thermal coal in Botswana.
An Environmental Impact Assessment for an underground coal mine at Mmamabula West has commenced.
A feasibility study to assess the technical and economic viability of an underground coal mine at Mmamabula West will commence in January 2014 and will be used to support the application for a retention licence by 31st March 2014.
AFR and ACWA Power International
Recently African Energy entered into a potentially long term partnership with ACWA Power International, for power generation in Botswana that could also see the JV tender for additional projects in Africa.
ACWA Power brings a pedigree and track record of completing multi-billion dollar transactions in delivering power solutions in numerous countries, and has paid-up capital of around US$1.4 billion. It is owned by eight Saudi conglomerates.
The companies have executed a joint development agreement for the development of a 300 MW power station and integrated coal mine at African Energy's Sese coal deposit in Botswana.
This project would be fuelled by coal from just a 50 million tonne block within the Sese deposit's 2,500 million tonnes of resources - thereby providing African Energy with enormous remaining resources to fuel other power projects.
ACWA will be the lead developer of the 300MW Botswana power project that the JV has tendered for; it will also bear the majority on ongoing project development costs up to the point of financial close.
African Energy will be the joint developer and its local team will be responsible for delivering all permits required for the project plus the mining solution - which are the core skills of the company's team.
ACWA Power will have a first right of refusal to partner with African Energy on any new power opportunities using Sese Coal.
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