Shares in Tlou Energy Limited (LON:TLOU) advanced on Monday morning as the AIM-quoted group reached an important milestone in the development of the Lesedi coal-bed methane gas project in Botswana.
Tlou in a statement revealed it has been granted a mining licence that gives it tenure over the project area, some 900 square kilometres that had previously been designated as prospecting licence PL002/2004.
It marks a transition for the Lesedi project, into the development phase from exploration and appraisal.
Tony Gilby, Tlou managing director, in a statement said: “The mining licence for the Lesedi CBM project was the first application of its kind to be lodged in Botswana.
“The awarding of the Mining Licence by the ministry is a major milestone for the company, further de-risks the project, and is an important prerequisite to developing the first commercial gas-to-power project in the country.
“The issue of a mining licence will pioneer the development of a new and exciting natural CBM gas industry in Botswana, an industry that will lead to a new indigenous source of energy, income and employment for the country.”
Gilby added that the licence also enhances the group’s proposal for the Botswana Government sanctioned CBM fuelled pilot power project, which he said is due to be submitted later this week.
Craig Howie, analyst at house broker Shore Capital, said: “We congratulate Tlou on successful award of the Lesedi mining licence, an important prerequisite for development of Botswana’s first commercial gas-to-power project, and note that Tlou’s RFP response relating to Lesedi is due to be submitted this week, in advance of the August 23rd closing date.
“With clear evidence of continued good progress at Lesedi, we believe that Tlou is in pole position to emerge as the winner in the current RFP tender process and that the stage is now set for its transition into a leading Botswana independent power producer.”
Tlou shares were up 0.65p, 7.88%, changing hands at 8.9p each.