African Energy Resources (ASX: AFR) shares have climbed 59% since the company executed a joint development agreement with ACWA Power International just last Thursday.
In afternoon trade today AFR is 13% stronger at $0.13, with the company continuing to receive a positive re-rating from investors. The stock has traded as high as $0.155 during the session.
AFR and ACWA Power have now jointly submitted an Expression of Interest for the 300MW Greenfield Tender Request recently announced by the Ministry of Minerals, Energy and Water Resources, on behalf of the Government of the Republic of Botswana.
Sese is believed to be one of only two greenfield projects in Botswana capable of delivering power by end 2016.
Sese has enough coal for 8 x 300MW projects over 25 years from Block-C Measured, and is a low-cost fuel supply due to low strip ratio mining and minimal processing requirements.
The addition of ACWA Power is value accretive as it brings an impressive pedigree and track record to the joint venture with AFR. It has a background in successfully completing numerous, multi-billion dollar transactions in delivering power solutions in numerous countries.
ACWA Power is incorporated in the Kingdom of Saudi Arabia, with a paid-up capital of around US$1.4 billion - and is owned by eight Saudi conglomerates.
Proactive Investors share price target
When the joint development agreement with ACWA Power was announced last week, and the share price was $0.09, Proactive Investors said:
"Proactive Investors believes that these facts have been missed by the market at present, and on our estimates, we believe AFR is worth between $0.13 - $0.16 within 6 - 9 months."
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