Legal and technical due diligence was completed by African Energy on May 24, removing one condition in the $A3.5 million ($US3.4m) acquisition.

Tranche 1 of a $5 million placement to Sentient Executive GP IV was ratified at a general meeting of African Energy shareholders Monday.

A second tranche will raise $3.5 million via an issue of a further 29.16 million shares at 0.12 cents, which will occur concurrently with the completion of the acquisition of the project by African Energy.

On completion of the sale and capital raising, African Energy will have a total of 3.8 billion tonnes of coal in Botswana and increased working capital to about $6 million.

The sale of the project remains conditional on Aviva’s subsidiary, Mmamantswe Coal, being registered as the holder of 100% of the project licence. This is subject to a separate transaction with Mawana Minerals.

Aviva confirmed in a statement today that all shareholders of Mawana had approved the sale of the licence for $US300,000 and the relevant minister in Botswana has been notified. The condition will be met once his approval has been received.

Under the key terms of the licence purchase agreement, if Aviva disposes of the licence for more than $3 million, the company must make a further payment to Mawana of 10% of the difference between the disposal price and $3 million.

Therefore, if Aviva completes the sale as it stands, it must pay an additional payment of about $50,000.

The sale of the project to African Energy also remains subject to winning approval at Aviva’s shareholder meeting in July.

“Aviva is very pleased with the progress of these transactions,” CEO Lindsay Reed said.

“We will work closely with African Energy and Mawana to complete the remaining conditions precedent as soon as possible and we believe these transactions are beneficial for Aviva shareholders”

Mmamantswe’s 1.3 billion tonnes of resources will help expand and diversify the company’s assets when added to its existing flagship project in Botswana, the 2.6Bt Sese coal and power project.

Aviva became involved in the Mmamantswe project in 2007 and identified the 1.3 billion tonne resource, which includes a probable reserve of 895 million tonnes.

It has completed several studies on the project and carried out a major water drilling program.

It announced in October that the environmental impact statement had been issued.