Department of Mines gives Tlou another prospective license
The Department of Mines has given the Australian Securities Exchange, London's AIM market and the Botswana Stock Exchange listed energy company Tlou Energy Limited a new prospecting license PL011/2019 designated Boomslang is valid for an initial term of three years.
The license covers ~1,000 Km2, bringing the total licence area held by the Company to ~9,300 Km2. According to Tlou Energy, the Boomslang area was considered highly prospective and provided significant potential development flexibility. Boomslang is located on-trend with the Lesedi Coal Bed Methane Project, where independently certified gas reserves are already in place.
According to the company, the initial development operations ongoing at the Lesedi gas field, the award of the adjacent Boomslang area along with the Mamba area provides the Company with further flexibility and optionality. The Lesedi Coal Bed Methane project is one of two projects Tlou has in Botswana and comprises five CBM prospecting licences
"I am very encouraged by the recently completed drilling program and in particular the strong gas indications observed to date. Furthermore, the good initial water flow, which is higher than that previously observed at Selemo, is potentially indicative of good permeability and therefore potentially good gas flows in this geologically high-graded area,” said Tony Gilby, Tlou managing director.
Recently Botswana government approved the 100 MW CMB tender in relation to “request to open Financial Proposal in respect of Tlou Energy Limited and Sekaname (Pty) Ltd who achieved technical scores of 89.8 percent and 86.4 percent respectively in the tender Development of a Maximum of 100MW of Coal Bed Methane Fueled Pilot Power Plants in Botswana.” The tender numbered Tender No: WOR 0/7/11/3-1 which was approved by the Board that time was submitted few weeks ago to PPADB as Tlou proposal received a technical score of 89.8 percent in the tender while Sekaname was scored a little bit low at 86.4 percent.
The Botswana government approval of the tender came after last year the Ministry of Mineral Resources Green Technology and Energy Security (MMGE) issued a Request for Proposal (‘RFP’) and opened a tender for development of a maximum of 100MW CBM fuelled power plants in Botswana by companies; Tlou Energy Limited and Sekaname (Pty) Ltd. After the two companies submitted their bids, the government then decided to cancel the original RFPs and approved re-tendering through Public Procurement and Assets Disposal Board (PPADB) by Tlou and Sekaname this year February.
“This proposal is for the development of CBM fuelled power plants up to 100MW. A successful RFP process can assist in the development of a new CBM gas industry in the country and create a new market for Tlou's independently-certified gas reserves of ~41 billion cubic feet (2P), ~427 billion cubic feet (3P) and significant contingent gas resources of ~3 trillion cubic feet (3C),” said Tlou Energy when receiving the tender.
Tlou Enrgy had waited for months for this tender with losing patience with its group CEO Martin McIver going to and fro to meet Minister of Mineral Resources, Green Technology and Energy Eric Molale inquiring and negotiating about the tender. Last year in an interview with renowned financial news platform Proactive Investors’s Andrew Scott, Tlou Energy Executive Director Gabaake Gabaake said he is positive that the tender will be implemented as the company’s directors have been getting positive feedback from government or the ministry recently. He said this is going to be a major project will open more.
Finally PPADB approved the request from Ministry of Mineral Resources, Green Technology and Energy Security (MMGE) to open the financial proposal in relation to the Tlou Energy's gas to power tender. Recently Tlou Energy Limited, was focused on delivering power in Botswana and Southern Africa through the development of CMB, it has commenced production testing at its Lesedi 3 development pod.
According to Tlou, the excellent progress was being made on drilling operations at the second development pod, Lesedi 4. The company said the first half of 2019 should see significant advancements towards achieving one or both of these objectives. Lou further said testing procedures will continue over the coming months with initial performance data expected in Q2 2019. In its latest financial report, Tlou said it spend on exploration activities during the period amounted to P30 million and according to the company, this is an increase on the comparative period and relates mainly to the development wells that were commenced during the reporting period.
According to the company, Tlou Energy believes as 100% owner of the most advanced gas project in the country, the Lesedi CBM Project, it will provide investors with access to a compelling opportunity using domestic gas to produce power and displace expensive diesel and imported power. Botswana has a significant energy shortage and generally relies on expensive imported power and diesel generation to fulfill its power requirements.
Experts predict that Botswana’s power demand is to increase by 37 percent to 1,017MW by 2025. The Australian Securities Exchange, London's AIM market and the Botswana Stock Exchange listed company touted itself as coming to save Southern Africa from the chronic shortage in the region.
Tlou is developing projects using coal bed methane ("CBM") natural gas and Botswana has a significant energy shortage and generally relies on expensive imported power and diesel generation to fulfill its power requirements. As 100 percent owner of Lesedi CBM Project, Tlou Energy provides investors with access to a compelling opportunity using domestic gas to produce power and displace expensive diesel and imported power.
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Grit divests from Letlole La Rona
Grit Services Limited, a member of the pan African real estate group, London Stock Exchange listed Grit Real Estate Income Group is divesting from Letlole La Rona Limited (LLR), a local real estate company established by government investment arm Botswana Development Corporation over a decade ago.
The Board of Directors of Letlole La Rona Limited this week announced in a statement to Unitholders that Grit Services Limited (‘Grit’) has informed them of its intention to exit its investment in the company.
Grit has been a material shareholder in LLR since 2019. On 07 March 2023, Grit sold 6 421 000 linked units, representing 2.29% of the Company’s total securities in issue, at a market value of BWP 22 537 710.
This trade follows previous sales of 6.79% in December 2022, as communicated to Unitholders on 10 January 2023, as well as a further sale of 4.78% (representing 13 347 068 linked units) on 24 February 2023 to various shareholders.
In aggregate, Grit has sold 13.9% shareholding in the Letlole La Rona between December 2022 and March 2023, resulting in current shareholding of 11.25% in the Company.
Letlole La Rona said in the statement that the exit process will take place in an orderly manner so as to maintain stability of the Company’s share price.
The statement explained that Grit’s sale of its entire shareholding in LLR is in line with its decision to exit investments where it does not have majority control, or where it has significant exposure to currencies other than US dollar, Euro or hard-currency-pegged revenue streams.
“Grit has announced similar decisions pertaining to certain of its hospitality assets in Mauritius recently. The Company would like to advise Unitholders that it remains focused on long-term value delivery to all stakeholders” LLR said
In July last year as part of their Go-to-Africa strategy Letlole La Rona acquired an initial 30% equity stake in Orbit Africa Logistics, with an option to increase this investment to 50%. OAL is a special purpose vehicle incorporated in Mauritius, owning an industrial asset in a prime industrial node in Nairobi, Kenya.
The co-investment was done alongside a wholly owned subsidiary of London listed Grit. The Orbit facility is situated on a prime industrial site on Mombasa Road, the principal route south of Nairobi center, serving the main industrial node, the port of Mombasa and the industrial town of Athi River and is strategically located 11 kilometers south of the international airport and 9.6 kilometers from the Inland Container Depot.
Grit shareholding in Letlole La Rona was seen as strategic for LLR, for the company to leverage on Grit’s already existing continental presence and expand its wings beyond Botswana borders as already delivered by Kenya transaction.
Media reports have however suggested that LLR and Grit have since late last year had fundamental disagreements on how to go about the Go-to-Africa strategy amongst other things, fuelled by alleged Botswana government interference on the affairs of LLR.
Government through LLR founding shareholder – Botswana Development Corporation has a controlling stake of around 40 percent in the company. Government is the sole shareholder of Botswana Development Corporation.
Letlole La Rona recently released their financial results for the six months ended December 2022, revenue increased by 4% to P50.2 million from P48.4 million in the prior comparative six months, whilst operating profit was up 8% to P36.5 million. Profit before tax of P49.7 million was reported, an increase of 8% on the prior comparative six months.
“We are encouraged by the strong results, notwithstanding a challenging economic environment. Our performance was mainly underpinned by annual lease escalations, our quality tenant base and below average market vacancy levels, especially in our warehouse portfolio,” Kamogelo Mowaneng, Letlole La Rona Chief Executive Officer commented.
LLR reported a weighted average lease expiry period of 3.3 years and escalation rates averaging 6.8% per annum for the period ended 31 December 2022.Its investment portfolio value increased by 14% year-on-year to close the period at P1.4 billion, mainly driven by the acquisition of a 30% stake in OAL in July 2022.
The Company also recorded a significant increase in other income, predominantly due to foreign exchange gains on the OAL shareholder loan. “We continue to explore pipeline opportunities locally, and regionally in line with our Go-to-Africa strategy and our interest remains on value-accretive investments,” Mowaneng said.
An interim distribution of 9.11 thebe per linked unit was declared on the 6th of February 2023 for the half-year period to 31 December 2022, comprising of a dividend of 0.05 thebe and debenture interest of 9.06 thebe per linked unit which will be paid to linked unit holders registered in the books of the Company at the close of business on 24 February 2023.
Stargems Group establishes Training Center in BW
Internationally-acclaimed diamond manufacturing company StarGems Group has established the Stargems Diamond Training Center which will be providing specialized training in diamond manufacturing and evaluation.
The Stargems Diamond Training Institute is located at the Stargems Group Botswana Unit in Gaborone.
“In accordance with the National Human Resource Development Strategy (NHRDS) which holds the principle that through education and skills development as well as the strategic alignment between national ambitions and individual capabilities, Botswana will become a prosperous, productive and innovative nation due to the quality and efficacy of its citizenry. The Training Centre will provide a range of modules in theory and in practice; from rough diamond evaluation to diamond grading and polishing for Batswana, at no cost for eight weeks. The internationally- recognized certificate offered in partnership with Harry Oppenheimer Diamond Training School presents invaluable opportunities for Batswana to access in the diamond industry locally and internationally. The initiative is an extension of our Corporate Social Investment to the community in which we operate,” said Vishal Shah, Stargems Group Managing Director, during the launch of the Stargems Diamond Training Center.
In order to participate in this rare opportunity, interested candidates are invited to submit a police clearance certificate and a BGCSE certificate only to the Stargems offices. Students who excel in these programs will have the chance to be onboarded by the Stargems Group. This serves as motivation for them to go through this training with a high level of seriousness.
“Community empowerment is one of our CSR principles. We believe that businesses can only thrive when their communities are well taken of. We are hoping that our presence will be impactful to various communities and economies. In the six countries that we are operating in, we have contributed through dedicating 10% of our revenues during COVID-19 to facilitate education, donating to hospitals and also to NGOs committed to supporting women and children living with HIV. One key issue that we are targeting in Botswana is the rate of unemployment amongst the youth. We are looking forward to working closely with the government and other relevant authorities to curb unemployment,” said Shah.
Currently, Stargems Group has employed 117 Batswana and they are looking forward to growing the numbers to 500 as the company grows. Majority of the employees will be graduates from the Stargems Diamond Training Center. This initiation has been received with open arms by the general public and stakeholders. During the launch, the Minister of Minerals and Energy, Honorable Lefoko Moagi, stated that the ministry fully endorses Stargems Diamond Training and will work closely with the Group to support and grow the initiative.
“As a ministry, we see this as an game changer that is aligned with one of the United Nations’ Six Priority Sustainable Development Goals, which is to Advance Opportunity and Impact for Diversity, Equity, and Inclusion (DEI). What Stargems Group is launching today will have a huge impact on the creation of employment in Botswana. An economy’s productivity rises as the number of educated workers increases as its skilled workmanship increases. It is not a secret that low skills perpetuate poverty and widen the inequality gap, therefore the development of skills has the potential to contribute significantly to structural transformation and economic growth by enhancing employability and helping the country become more competitive. We are grateful to see the emergence of industry players such as Stargems Group who have strived to create such opportunities that mitigate the negative effects of COVID-19 on the economy,” said the Minister of Minerals and Energy.
Food import bill slightly declines
The latest figures released by Statistics Botswana this week shows that food import bill for Botswana slightly declined from around P1.1 billion in November 2022 to around P981 million in December during the same year.
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