Aviva Corporation Limited, the diversified energy outfit, took a bold move of right option at the end of last year to raise 5.35 million Australian dollars to bring capital on hand to 26 million dollars as it eyes to complete reserve, coal preparation and power combustion studies for Mmamantswe project.
In a statement released last week, Aviva said that “all unlisted options having an exercise price of 50 cents per share and expiry date of 31 December 2007 have been exercised.”
“The exercise of these 10, 700 000 options has raised an additional $ 5.35 million bringing funds on hand to approximately $ 26 million,” the company said in a statement.
Further, it stated that the money would be used towards the development of an integrated energy project at Coolimba in Western Australia and Mmamantswe in Botswana.
“A resource estimate for Mmamantswe based on the 2007 drill programme is almost complete,” it added.
The Mmamatswe concession areaÔÇö- which is some 110 kilometers north of Gaborone ÔÇö fell into the hands of Mawana Minerals (Pty) LimitedÔÇöa company owned by Paul Ramoloto and his family some time last year after the discoveries made by BP in the 1980s.
And in April last year, he invited Aviva Corporation to a joint venture that would see the Australian company owning 90 percent subject to the fact that it covers full financial budget for prospecting up to a bankable feasibility study.
Since the marriage between the two companies in April last year, 26 drilling holes have been made within the two concession areas that cover an area size of 2000 km2. All the holes have shown the presence of coal.
The energy company said it is targeting coal reserves of 600 million tons enough to last 30 years.
“The next step would be to work on a plan that would take the resource to the reserve status. And that will start in March and it will take three months. We would be looking at coal that would last for 30 years with customers most likely to be southern African states,” the Chief Executive Officer for Aviva, Lindsay Reed has said.
The work will entail increasing the drilled holes from 26 to 80 which is hoped will enable the company to do a proper data assessment. So far, available records from Department of Geological Survey indicate that the area has two different types of coal, soft coalÔÇöused for cockingÔÇö similar to that at Matimba and Grootguluk mine in South Africa at a depth of 70 meters and deeper than that has coal with similar rock characteristics to that of Morupule and Mmamabula.
Aviva comes at a time when the country is estimated to have coal resources of 200 billion ÔÇô enough to supply the power hungry southern African region, which is at the initial stages of industrialization.
“We found Botswana to be very good in working with. Botswana has a wonderful reputation as a place to do mining,” said Reed. “Southern Africa needs a lot of power and you need to secure a place for investment and Botswana provides for that.”
The company is planning to start operation by 2010 and it is expected to be an open cast mine.
It further stated that some of the encouraging factors are that the site is closer to the highway, railway and high voltage transmission lines. The company is going to do the scoping report to determine the number of people who will be employed at the mine.