The coal prospecting licences are located in the Kweneng and Central Districts.

The Lokgwabe prospect covers 501.6 square kilometres and is adjacent to Nimrodel Resources’ 4.2 billion tonne Takatokwane project.

The second prospect is near Rakops and covers 932 square kilometres.

Analytika Holdings’ Alan Golding produced an independent desktop geological report on the prospects in 2011.

Golding estimated potentially large coal tonnages between the two licences, based on historic drilling and the existence of coal on the Rakops prospect, based on coal being found near two historic bore holes close to the licence area.

Under the terms of the agreement Hodges can earn a 51% in the two licences by spending $1 million on them over the next two years.

When it has spent the $1 million, Hodges will get an exclusive five-year right to complete a feasibility study to gain another 29% of the prospects.

The agreement is contingent on Meerkat obtaining the prospecting licence renewal for Rakops from the Botswana government. A renewal application has been submitted for the prospect.

Hodges will be designated manager or the project expenditures and operations.

Managing director Mark Major said he believed Botswana would be the next major African coal provider and would play an integral role in catering to southern Africa and the world’s growing power needs.

He said Botswana already was on the radar of industrial groups out of India and China.

“The company has previously been successful in its exploration work, identifying resources prospective for open-cut mining and of a quality to satisfy export markets,” Major said.

“Building on this we are extending our holdings in Botswana at a time that is conducive to securing strategic assets on favourable commercial terms for our shareholders.”

An initial two-stage drilling program is planned for the Lokgwabe and Rakops prospects and a 4000 metre combined reverse circulation and diamond program for Lokgwabe, to provide an initial inferred JORC resource.

Reconnaissance drilling at Rakops will test for shallower coals on the eastern side of the licence and deeper coals to the west.

Hodges also is working to prove up multi-billion tonne thermal coal assets at its Morupule South and Moiyabana projects in Botswana.

Major said infrastructure remained the key to turning Botwsana into the world’s next energy hub.