South Perth-based energy company Aviva Corporation Ltd will spend around $650,000 to acquire a 90 per cent joint venture interest in Botswana-based Mawana Minerals Ltd's Mmamantswe Coal Project, the company announced today.
South Perth-based energy company Aviva Corporation Ltd will spend around $650,000 to acquire a 90 per cent joint venture interest in Botswana-based Mawana Minerals Ltd's Mmamantswe Coal Project, the company announced today.
The full text of a company announcement is pasted below
Aviva Corporation Ltd, has signed a letter of agreement with Mawana Minerals (Pty) Ltd (Mawana) of Botswana to enter into a Joint Venture over the Mmamantswe Coal Project, located 70km north of the capital, Gaborone.
The Mmamantswe Coal Project tenement area is positioned between the major infrastructure corridor of Botswana and the South African border. Rail, power and highway links to Gaborone and South Africa pass within 30km of the coal deposit.
Aviva and Mawana have entered into an agreement whereby Aviva will spend $US0.5M over 18 months upon which Mawana will grant it an option to earn a 90% Joint Venture interest in the project after payment of US$0.5M and the completion of a Bankable Feasibility Study.
Mawana will be free carried to production on its 10% interest and will have the right to take up a further 15% on a fully funded basis.
Aviva Chief Executive Officer Lindsay Reed said building the company's energy portfolio would add value for shareholders.
"We have established a team of energy experts to develop the Central West Coal project in Western Australia and Aviva will have access to this team to advance the Mmamantswe Project. Expanding an energy portfolio into Botswana is a logical step to utilise the expertise we have built," Mr Reed said.
"A 12 month exploration and development plan for the Mmamantswe Project are currently being formulated with a drilling and quality testing program scheduled for the second quarter of 2007.
"Energy consumption is a major issue in a significant number of countries throughout the world and Botswana is no different."
Prior to 1983, exploration drilling by BP Coal and JCI intercepted three coal seams with a combined thickness of 23 metres between 30 and 110m depth.
The coal appears to have very shallow dip and is structurally limited to an area approximately 7km by 4km. Coal quality test work returned energy values of between 15 and 20MJ/kg. No further exploration has been completed since 1983.
The Botswana Department of Geological Survey has published an inventory of 598Mt of coal within the tenement area and puts the potential of the area at over two billion tonnes. Aviva believes a target of 600 million tonnes is realistic.
Mawana Minerals (Pty) Ltd is the sole applicant for Prospecting License "Folio 1A" covering the known extent of Mmamantswe coal deposit. It is anticipated that the Prospecting License will be granted around 31st March 2007.
Botswana is the investment location of choice in Southern Africa, and has a similar legal system and mining code to Australia. The small population is well educated and has a long history of supporting mining projects.
The South African (Eskom) power grid services South Africa and Botswana. Generating capacity in the grid is 42,000MW of which approximately 90% is from coal. Electricity consumption is growing rapidly as a result of black empowerment policies and the global resources boom and as a result Eskom expects electricity consumption to increase at 2,000MW per year for the next 20 years. On the back of this demand, Eskom expects coal consumption for power generation to increase by 45-57Mtpa by 2025.
Mmamantswe is ideally located to meet the growing demand for energy being close to the main Eskom interconnectors which travel through a major industrial corridor enroute to Johannesburg only 300km away. The project has many similarities to the company's Central West Coal project in WA, but with the potential to host significantly more coal at a better stripping ratio.
