African Energy Resources Limited

Published : July 27th, 2016

June Quarterly Activities and Cashflow Report

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June Quarterly Activities and Cashflow Report

28 July 2016


  • First Quantum Minerals Ltd. (FQM) committed AUD $3 million over the next twelve months on work programs to advance the Sese Integrated Power Project.

  • Sese JV focused on advancing the permitting of Sese Coal Mine and Power Project

    • The Department of Mines in Botswana accepted an application for a coal mining license.

    • Negotiations continued with the Botswana Ministry of Finance for a Manufacturing Development Approval Order for the Sese Project.

  • The South African Minister of Energy gazetted a determination setting out terms for the coal baseload cross‐border Independent Power Producer (IPP) procurement programme:

    • 3,750 MW shall be procured through one or more coal‐fired, cross‐border IPP's

    • The Department of Energy can commence direct negotiation with one or more project developers rather than being restricted to a tendering process;

    • Procurement shall target connection to the grid as soon as reasonably possible.

  • African Energy's 100% owned Mmamabula West and Mmamantswe Projects are being developed for submission into this cross border IPP programme.

  • Project development programmes continued at the Mmamabula West project:

    • Test work programme to develop a preliminary fuel specification continued

    • Amendments to the Environmental and Social Impacts Assessment (ESIA) and Environmental Management Plan to include 600MW of power generation and grid connection continued;

    • Hydrogeological modelling for ESIA baseline studies continued;

    • Preparation of submissions for surface rights and water allocation continued

  • AFR assisted TM Consulting prepare the Mmamantswe Project work programme to deliver a formal submission in response to South Africa's coal‐fired, cross‐border IPP procurement programme.

  • On‐market share buyback remained suspended in the quarter.

  • At 30 June 2016, the Company had cash reserves of AU$5.27M.


Sese Integrated Power Project (47% AFR, 53% FQM)

  • Commence a work programme to advance the Sese Project including;

    • Additional large diameter drilling to collect ~1,000kg of coal for combustion testing.

    • Preliminary geotechnical evaluations of the proposed power station site

    • Update the Environmental Approvals to allow up to 450MW of power generation. o Update the mining study to meet the requirements of a 450MW power project. o Preliminary power station design and layout.

    • Execution of the Water Supply Agreement for the project.

    • Hydrogeological studies at the mine site to characterize the aquifers.

  • Continue to assess power market opportunities in the southern African region suitable for expansions of the Sese Integrated Power Project.

  • Submit an application to Botswana Ministry of Finance for a Manufacturing Development Approval Order for the Sese Project.

  • FQM are required to commit a further A$10.0M by 12 July 2017 to acquire an additional 22% interest in the project.

    Mmamabula West Project (100% AFR)

  • Complete binding documentation for a Joint Development Agreement with a development partner and such other ancillary documents as may be required.

  • Completion of large diameter core analyses to provide the basis for determination of a power station fuel specification for each coal seam.

  • Ongoing hydrogeological modelling for the ESIA baseline study.

  • Ongoing amendment of the ESIA and EMP to include 600MW of power generation plus grid connection.

  • Commence grid integration and transmission study.

    Mmamantswe Power Project (100% AFR, operated by TM Consulting)

  • Continue to assist TM Consulting execute the Mmamantswe Project work programme to deliver a formal submission in response to South Africa's coal‐fired, cross‐border IPP procurement programme.


  1. Sese JV, Botswana (AFR 47%, FQM 53%)

  2. Sese JV

    • FQM acquired a 51% interest in the Sese Project in January 2015 and shall increase their interest in to 75% by investing a further A$10.0M by 12 July 2017. This investment will be used to fund the evaluation and development of the proposed Sese Integrated Power Project.

    • Once FQM has reached a 75% project interest, AFR's ongoing 25% interest in all projects undertaken in the Sese JV will be loan carried through to commercial operation, with the loan to be priced on the same terms as FQM's weighted average cost of long‐term debt, and repaid from AFR's share of operating surplus cash flow.

    • FQM spent A$164,820 in the quarter and has spent A$1,935,800 to date since their initial investment on January 2015 and currently own 53% interest in the Sese Project.

    • First Quantum Minerals Ltd. (FQM) has committed AUD $3 million over the next twelve months on work programs to advance the Sese Integrated Power Project:

      • Additional large diameter drilling to collect approximately 1,000kg of coal for combustion testing and physical handling test work. This will lead to the development of the fuel specification for the proposed power station, and finalization of the coal handling and processing flowsheet.

      • Preliminary geotechnical evaluations of the proposed power station site to assess sub‐ surface conditions with respect to footings for the power station (boilers, turbines, generators) and ancillary infrastructure.

      • Update the mining study to meet the requirements of fuel delivery for a 450MW integrated power project.

      • Preliminary power station design and layout.

      • Negotiations for power off take agreements with interested parties.

      • Execution of the Water Supply Agreement for the project.

      • Hydrogeological studies at the mine site to characterize aquifers to allow mine design and aquifer management plans to be advanced.

      • Commencement of early site works to include an upgraded access road and preliminary siting of camp facilities.

      • Diamond drilling to test the continuity and quality of the Seswe limestone deposit for use as a sorbent to reduce airborne sulphur emissions from the proposed power station.

  3. Permitting

    • A mining license application covering enough coal for the initial Sese Power Project and potential future expansions is currently being assessed by Botswana Department of Mines.

    • A Land Lease agreement providing guaranteed surface rights over the Sese project area for 50 years was signed during the quarter and remains in the process of being registered as a Deed in Botswana.

    • A formal Water Supply Agreement is being finalized for execution.

    • The Environmental and Social Impact Assessment for the Sese Integrated Power Project has been approved by the Department of Environmental Affairs (DEA).

      • This covers an initial 300MW power station, associated coal mine and related infrastructure, including an access corridor to the main A1 highway and regional transmission grid.

      • An update to the ESIA is being prepared to seek environmental approvals sufficient for up to 450MW of power generation (staged development of 2 x 225MW units) and the associated coal mining and processing.

    • Foley North industrial minerals prospecting license (PL004/2013) was extended to 31 December 2017. Sese (PL96/2005) and Sese West (PL197/2007) prospecting licenses are valid until 31 December 2016.

    • Commenced negotiations with Botswana Ministry of Finance for a Manufacturing Development Approval Order for the Sese Project. AFR is providing assistance to FQM for these negotiations, including financial modelling of project cash flows to various stakeholders and compiling advice on options for efficient and fair tax structuring.

  4. Mmamabula West Project, Botswana (AFR 100%)

  5. Integrated Power Project

    South Africa recently gazetted an updated notice amending it coal‐fired, baseload, cross‐border IPP procurement programme to 3,750MW. Procurement is to be managed via the IPP Office on behalf of the Department of Energy, and can be via direct negotiation for grid connection as soon as possible.

    The Mmamabula West project contains two ~5m thick coal seams and is being developed as an integrated underground coal mine and 600MW power station for submission into the South African cross‐border IPP procurement programme.

  6. Joint Development Agreement

    The Company is continuing to negotiate a Joint Development Agreement for the Mmamabula West project with a South African developer.

  7. Project Development Plan

  8. The following project development plan has been implemented:

    • A large diameter drilling programme to derive a power station fuel specification:

      • Proximate analyses of coal core samples from four slim‐line cores (48 samples of HQ3 core) indicate that the coal quality is in‐line with expectations from previous drilling.

      • Petrographic analysis of representative coal samples from each seam has been undertaken and indicates that the coal from both seams is a Medium Rank D bituminous coal.

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African Energy Resources Limited

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African Energy is a uranium exploration company based in Australia.

African Energy holds various exploration projects in Malawi, in Zambia and in Zimbabwe.

Its main asset in development is GWABE (CHIRUNDU) in Zambia and its main exploration properties are NORTHERN LUANGWA VALLEY, LUANO VALLEY, ALDERSHOT, KARIBA VALLEY JV, CHIRUNDU JV, NJAME, LUANO and CENTRAL LUANGWA VALLEY in Zambia, SESE in Botswana and KARIBA in Zimbabwe.

African Energy is listed in Australia. Its market capitalisation is AU$ 20.1 millions as of today (US$ 14.5 millions, € 12.7 millions).

Its stock quote reached its highest recent level on February 25, 2011 at AU$ 1.00, and its lowest recent point on March 20, 2020 at AU$ 0.01.

African Energy has 609 000 000 shares outstanding.

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Corporate Presentations of African Energy Resources Limited
11/10/2009AFR: Investor Presentation November 2009
Annual reports of African Energy Resources Limited
2009 Annual Report
2009 Annual report
Project news of African Energy Resources Limited
11/6/2012(Sese)Receives Commitments to Raise A$3.0m for Sese Coal & Power P...
10/23/2012Company Update - Recent Progress with Projects
2/7/2012BRR Broadcast - African Energy Moves from Exploration to Pre...
6/11/2009(Chirundu Jv)Operating Cost Reduction for Chirundu Uranium JV Project
Corporate news of African Energy Resources Limited
7/27/2016June Quarterly Activities and Cashflow Report
4/20/2016African Energy Resources Ltd Media Broadcast
10/1/20152015 Annual Financial Report
7/30/2015June Quarterly Activities and Cashflows Report
7/6/2015Binding Term Sheet Signed for The Mmamantswe Project
7/6/2015Notice under 708A
7/2/2015Change of Director's Interest Notice x7
4/8/2015Change of Director's Interest Notice x7
3/10/2015Eastern States Roadshow
1/29/2015December Quarterly Activities and Cashflow Report
12/15/2014Sese Joint Venture Shareholder Agreement Executed
12/5/2014Sese Prospecting Licences Extended for Two Years
12/1/2014Extension of Time to Complete Sese Joint Venture
11/28/2014Appendix 3B
11/17/2014Completion of Sese Joint Venture Agreement Extended
11/3/2014Quarterly Activities and Cashflow Report
10/27/2014Change of Substantial Holders Interest
10/23/2014s708 ASIC Cleansing Notice
10/20/2014Investment by First Quantum Minerals to Develop New Power Pr...
3/6/2014Company Update
2/25/2014Update on Botswana 300MW Greenfield Power Project Tender
2/13/201413 Feb 2014 JORC Clarification Statement
2/1/201424 Jan 2014 Change of Directors Interest Notice x3
1/29/201429 Jan 2014 Change of Directors Interest Notice x3
1/13/201403 Jan 2014 JORC Clarification Statement
1/6/201407 Jan 2014 Change of Directors Interest Notice x4
11/11/2013BRR Webcast: African Energy acquires Mmamabula West Coal Pro...
10/18/2012Signs MOU with Power Station EPC Contractor
9/24/2012tests coal export route with 1,000 tons
4/30/2012News Release
1/29/2012News Release
7/18/2011(Sese)Raises A$15m to Accelerate Sese Coal Project
3/25/20102010 Exploration Programme Commences
2/2/2010AFR: February 2010 Investor Update
1/27/2010AFR: December Quarterly Activities and Cashflow Report
12/4/2009AFR: Placement and Appendix 3B
11/27/2009AFR: Share Purchase Plan
11/25/2009AFR: Results of Meeting
11/24/2009AFR: AGM Shareholder Presentation
10/29/2009AFR: September 2009 Quartery Activities and Cashflow Report
10/22/2009AFR: Notice of Annual General Meeting/Proxy Form
9/22/2009AFR: Full Year Statutory Accounts
8/18/2009Results of Shareholder Meeting
7/31/2009Boardroom Radio Broadcast
7/31/2009Appendix 3B
7/31/2009Section 708 Notice - Cleansing Statement
7/31/2009Notice of Meeting
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