Name and Location
Mmamantswe coal project, Botswana.

Client
Aviva Corporation completed the sale of the Mmamantswe project to African Energy Resources in July 2013.

Project Description
The Mmamantswe project is located on the South African border, 70 km north of the Botswana capital, Gaborone.

The project has a measured and indicated resource estimated of 1.24-billion tonnes of thermal coal.

Mmamantswe has an approved environmental- and social-impact statement for up to ten-million tonnes of coal  and up to 2 000 MW of electricity generation.

Value
The scoping study is estimated at a total capital cost of $350-million on an owner-operated basis.

Duration
The environmental-impact assessment for the Mmamantswe project will be completed in early 2012.

Latest Developments
African Energy has signed a term sheet with a South African project developer to divest of its Mmamantswe coal and power project.

Subject to certain conditions precedent, African Energy will sell the Mmamantswe project for an initial $10-million to the developer, which will form a bid consortium to sole fund the preparation and submission of a bid to South Africa’s upcoming Coal Baseload Independent Power Producer (IPP) Procurement Programme using the Mmamantswe project.

African Energy will be paid this initial fee if the project is shortlisted by the South African Department of Energy. On receipt of the initial funds, African Energy will transfer ownership of its shares in the Mmamantswe project to the developer.

The ASX-listed company will receive a second payment of $10-million if the project reaches financial close.

The conditions precedent include the completion of a due diligence, the delivery of a bank guarantee or the creation of an escrow account for the initial $10-million payment, and the completion of a share sale agreement within 60 days.

African Energy will retain full ownership of the Mmamabula West coal and power project, also in Botswana, as well as a 49% interest in the Sese joint venture with First Quantum Minerals.

Key Contracts and Suppliers
SRK (scoping study).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
African Energy Resources, tel +61 8 6465 5500, fax +61 8 6465 5599 or email info@africanenergyresources.com.