Aviva sells off Botswana coal project
PERTH (miningweekly.com) – ASX-listed energy provider Aviva Corporation has sold off its Mmamantswe coal project, in Botswana, to fellow-listed African Energy Resources for A$3.5-million.
Aviva, which acquired the project in 2007, has identified a 1.3-billion-ton coal resource, which included a probable reserve of 895-million tons. The company has also completed several studies on the project, and has carried out a water drilling programme.
The project’s environmental-impact statement was issued in October last year.
“Aviva and GDF Suez bid Mmamantswe into the South African power procurement programme as a very competitive 1 000 MW integrated power project. When the procurement programme was cancelled in 2010, the Aviva board wrote down its investment in Mmamantswe and has seen no cause to review its holding value,” said Aviva CEO Lindsay Reed on Monday.
“We believe the coal sector in Botswana will now be driven forward through a combination of smaller domestic power stations and access to export coal markets, for which a consolidation of resource ownership is required to drive infrastructure investment and unlock value.”
Reed said that with that in mind, the Aviva board had positioned the project to be part of a scale-up of resources in Botswana, with the sell-off of the project giving effect to that strategy.
“The sale price will increase Aviva’s cash position and we believe this is a good outcome for shareholders.”
The transaction was subject to a number of conditions precedent, including shareholder approval, a positive due diligence by African Energy by May 3, and Aviva obtaining the outstanding 10% of the Mmamantswe project from Mawana Minerals.
The deal was also subject to African Energy completing an A$8.5-million fund raising by issuing shares to The Sentient Group.
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