viewAfrican Energy Resources (Guernsey) Ltd.

African Energy Resources launches rights issue, Sentient to partially underwrite


African Energy Resources (ASX: AFR) is undertaking a 1 for 13 non-renounceable partially underwritten entitlement issue at $0.085 to raise up to $2.95 million before costs. A placement is also being made to raise another $1.5 million.

The company has gained significant momentum in recent months at its coal and power projects in Botswana, which includes the signing a non-binding agreement with Zambian electricity utility ZESCO Limited to supply base-load electrical power from the Sese Coal & Power project.

This follows African Energy and the Kingdom of Saudi Arabia incorporated company ACWA Power International moving closer to securing an invitation to bid on a large power project deal in Botswana.

Highlighting the financial strength of ACWA, it has paid-up capital of around US$1.4 billion - and is owned by eight Saudi conglomerates.

A prospectus relating to the rights issue was lodged with ASIC today and will be sent to eligible shareholders together with a personalised entitlement and acceptance form on 15 May 2014.

Sentient Global to underwrite part of issue 

Providing a major vote of confidence in African Energy's development strategy is largest shareholder Sentient Global Resources Fund IV, L.P. acting though Sentient Executive GP IV Limited, to underwrite up to $1.5 million of the issue.

Sentient has already agreed to participate in the placement to take their ownership in the company to 19.9%.

The Sentient Group manages over US$2.7 billion in the development of metal, mineral and energy assets across the globe.

The AFR directors are also showing their support, with entities associated with them agreeing to purchase 2.4 million shares in the placement.

Sese power project DFS and environmental assessment

Recently African Energy said that it soon expects to finalise the Environmental and Social Impact Assessment and Phase 1 of the Definitive Feasibility Study for a 300 megawatt power station and captive 1.5 million tonne per annum coal mine at its Sese Coal project in Botswana.

Sese hosts 2.5 billion tonnes of coal, enough to support multiple 300MW projects for regional power.

Upon completion, it will submit a mining licence application covering enough coal for the full life of the 300MW Sese Integrated Power Project.

An advantage of Sese is that it is close to existing transmission grid and planned grid extensions, and is matched to power markets in Botswana and neighbouring countries.


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Quick facts: African Energy Resources (Guernsey) Ltd.

Price: 0.013 AUD

Market: ASX
Market Cap: $8.1 m

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