African Energy Resources (ASX: AFR) has raised up to A$15 million through an oversubscribed placement of 30 million shares at A$0.50 per share to advance the Sese Coal Project in Botswana, with a view to potential development in late 2012.
The placement to institutional and sophisticated investors from Asia, Europe and Australia is testament to the quality of the Sese project and has Helmsec Global Capital Limited acting as the lead manager.
The proceeds will be used at Sese for infill drilling to Measured status, trial pit and bulk samples, Feasibility Studies, an environmental impact assessment, working capital and transaction costs.
Frazer Tabeart, African Energy Resources' managing director, told Proactive Investors today that the funds enable the company to "substantially de-risk the project in the next 12 months through a trial pit which will provide bulk samples to allow potential customers (export and domestic/regional) to test the quality of the coal," as well as demonstrate the company's commitment to the project and its development.
The trial pit will also give African Energy the opportunity to assess export logistics in the region.
By continuing its resource drilling programs the company will progress through an Indicated resource on the whole deposit to a Measured resource for the area, which is likely to provide the first 25 years of production.
The company will commence the environmental impact assessment shortly, which is likely to be a critical step on the path to production.
The full Feasibility Study to assess all technical and commercial aspects of the project with a view to initial production in 2013, is subject to the usual government regulatory hurdles.
Helmsec has an exclusive mandate to provide financial and related marketing advice over a 12 month period.
In May African Energy announced a better-than-expected initial gross in-situ coal Resource at Sese of 2.73 billion tonnes, providing a boost to the company as it looks to upgrade the entire Resource to an Indicated category during the September quarter.
The company continues to unlock the potential for a much bigger coal resource in Botswana, with the discovery of a thick coal seam at Sese West on June 8, located just a few kilometres to the south of the Sese coal project.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17938/african-energy-resources-raises-a15m-to-fast-track-sese-coal-project-in-botswana-17938.html
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