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African Energy Resources Ticks The Boxes As It Moves Closer To Development

African Energy Resources (ASX: AFR) is rapidly progressing operations at its Sese Thermal Coal Project in Botswana as it heads towards development.

The company has completed the excavation of a 15,000 tonne bulk sample of coal from a 320 metre long box-cut.

A site has been identified in South Africa to undertake the first combustion trials of Sese coal in an industrial boiler.

This trial is being undertaken to confirm the combustion characteristics of Sese coal for typical industrial users that form part of African Energy's regional target market.

This initial trial is a key step before undertaking further trials in Botswana and in neighbouring countries such as South Africa, Zambia and Namibia.

Coal Marketing Manager

African Energy has appointed Industrial Coal Africa (NYSE:ICA) as coal marketing manager to oversee the marketing, sales and logistics services for the Sese Coal Project.

ICA has previously serviced Riversdale Mining, which owned and operated the Zululand Anthracite Colliery prior to the company being taken over by Rio Tinto (ASX: RIO) last year.

The colliery produces high quality anthracite with an annual saleable tonnage of around 750,000 tonnes.

Export Trials

A trial shipment of Sese coal will be shipped to the Matola Coal Terminal at the east coast port of Maputo in Mozambique in the coming weeks, under an agreement with Botswana Rail Corporation.

During the past six months African Energy has been assessing options for exporting coal from Botswana to ports on the east and west coasts of Africa using the existing rail network that passes within 25 kilometres of the Sese Coal Project.

The trial shipment is expected to help determine the freight and logistical issues associated with delivering Sese coal to a port.

Community Consultation

African Energy has received a positive response to its Sese Coal Project proposal in community consultation meetings held in February. No material adverse issues were raised by the community.

Feasibility Studies

A Pre‐Feasibility Study is scheduled to be completed by the end of June and African Energy is on track to deliver a Bankable Feasibility Study by December.

The Bankable Feasibility Study is evaluating a mining operation of up to 5 million tonnes per annum of coal, with the option for an associated mine‐mouth power station of up to 600 megawatts.

The Sese Coal Project hosts over 2.5 billion tonnes of coal at the project in the Indicated category, after more than 95% of the in-situ resource was classified.

Part of the resource is now targeted to be moved into the higher confidence Measured category in the June 2012 quarter, which will be from Blocks B and C.