African Energy Resources extends potential investor reach to Botswana with BSE listing

Tuesday, 01 Nov 2011

African Energy Resources joins a growing list of international resource companies as it prepares to list on the Botswana Stock Exchange following approval for the dual-listing.

The company will join the likes of Discovery Metals A‐Cap Resources and CIC Energy when it begins trading on the BSE later today. The move will place increased investor focus on its wholly owned Sese Coal Project, where the company continues to make rapid progress towards developing the 2.7 billion tonne project.

Importantly, Botswana is an emerging global coal province widely perceived as an excellent investment destination by mining companies.

The dual-listing provides African Energy with access to an additional shareholder base within Botswana that includes a number of significant institutional investors and pension funds. A formal ceremony will be held in Gaborone today to mark the admission of the company to the BSE.

The Sese Coal Project is supported by good infrastructure 25 kilometres to the east including road, rail and a 220 kilovolt power line.

India is considered the likely market for Sese thermal coal, with demand set to increase from 50 million tonnes per annum in 2010 to 210 million tonnes per annum by 2025. China is also experiencing a surge in demand for the resource with thermal coal imports expected to double to 213 million tonnes by 2025.

In September, African Energy Resources received results from a Concept Study that confirm the technical and commercial viability of the project.

Robust cash flows and strong operating margins are possible under a variety of scenarios that do not require new rail and port infrastructure.

The study concluded that the project could be developed through a staged approach. An initial, up to 1 million tonnes per annum operation can generate cash flows from 2013 and involves selling washed coal into domestic and regional markets.

Additional coal sales to a power station, and moderate volumes of export sales could expand Sese into a 3 million tonnes to 5 million tonnes per annum operation.

(sourced Proactiveinvestors)

Hodges Resources takes option on 1.4Bt Botswana coal prospect

Monday, March 07, 2011

Hodges Resources (ASX: HDG) has optioned the Moruple South Coal prospect, a strategic coal prospect with a target resource of 1.4 billion tonnes in Botswana.

The Morupule South Coal Prospect is adjacent to the operational Morupule mine and Colliery which is the only operational coal fired power plant in Botswana.

Given the upward share price trajectory of another Botswana coal explorer, African Energy Resources (ASX: AFR), with its Sese Coal Project in eastern Botswana, the deal by Hodges to option a coal prospect with a target resource of 1.4 billion tonnes is interesting, indeed.

Under the terms of the agreement, Hodges can initially earn 75% by completing the payment of US$500,000 cash on execution of the agreement and spending US$3,000,000 over two years, with a requirement to spend the first US$1,000,000 within the first year.

On completion of the terms above the companies will incorporate a special propriety company in Botswana that will hold the permit and form a joint venture company.

Hodges can then exercise its option to acquire an additional 24% in the JV through payment of US$0.10 per tonne of all JORC classified Measured and Indicated Resources calculated at the end of the initial farm‐in agreement (two years).

On initiating this payment Hodges must solely fund an additional US$2,000,000 of exploration costs over a two year period and on completion pay SNDP $0.08 per tonne of additional JORC classified Measured and Indicated Resources from an updated report.

Hodges has the exclusive right, until 2nd May 2011, to conduct due diligence prior to entering into the binding agreement.

Located within the eastern central district of Botswana, the Moruple South Coal prospect joint venture has significant mineable coal seams within the area supported by work completed by the current owner and the neighboring companies and a preliminary report undertaken by GEMECS.

Importantly the project areas have had minimal exploration and coal quality analytical work.

Botswana has extensive unexploited coal resources estimated to be in the order of 212 billion tonnes, making it one of the most coal rich countries in Africa.

Botswana is located within southern Africa and has a stable multi‐party democracy and is considered to have a medium to low political risk, similar to Namibia.