African Energy Resources has agreed to acquire the 2.4 billion tonne Mmamabula West coal project for cash consideration of USD $2.5M.Mmamabula West in south-east Botswana contains 892Mt of indicated resource and 1,541 Mt of inferred resource at an average in-situ raw CV of 4,800kcal/kg (20.1 MJ/kg). The majority of the coal occurs in two coal seams which are 4-6m thick and 100-150m below surface. A preferred area of approximately 25km2 within the indicated resource contains higher quality coal that can produce a 6,100 kcal/kg export product at yields of 75%. This preferred area requires further detailed studies to confirm its potential for an underground export coal mine.
African Energy will pay an initial USD $1 million to Asenjo Energy once the transfer of title of the relevant prospecting licence has been approved, and a further USD $1.5 million once a retention licence has been granted over the project.On completion of the transaction, African Energy will have increased its total in-situ resources to 6.2 billion tonnes of thermal coal in Botswana.