In response to a recent request for further information from the Australian Stock Exchange, (ASX), African Energy has announced TM Consulting as the new buyers of the Mmamantswe coal and power project. TM Consulting is a South African consultancy firm that provides financial consulting, transactional advisory services and funds sourcing.
African Energy signed a term sheet with TM Consulting in early July with an intention to divest of its Mmamantswe coal and power project. Subject to certain conditions precedent, African Energy would sell the Mmamantswe project for an initial sum of $10-million to the developer, which would form a bid consortium to sole fund the preparation and submission of a bid into South Africa’s upcoming Coal Baseload Independent Power Producer (IPP) Procurement Programme, using the Mmamantswe project.
“The Company and Developer are working towards satisfying the term sheet conditions precedent by the deadline of 30 September 2015.” the company said in a statement published on the Botswana Stock Exchange on Monday.
According to the agreement, African Energy would 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 would transfer ownership of its shares in the Mmamantswe project to the developer. The ASX-listed company would receive a second payment of $10-million if the project reaches financial close. African Energy told shareholders on Monday that the conditions precedent included 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. The Mmamantswe coal project is estimated to host some 1.25-billion tonnes of coal, and is located 20 km from the South African border. The project has an approved environmental-impact assessment for a coal mining operation of up to ten-million tonnes a year and a 2 000 MW power station. African Energy would retain full ownership of the Mmamabula West coal and power project as well as a 49 percent interest in the Sese joint venture with First Quantum Minerals.