Forelectronicdistribution 15thAugust2012

SESEMEASUREDRESOURCEEXCEEDS650MTCOAL
Highlights:

SeseCoal&PowerProject:ResourceSummary(Rawcoalonanairdriedbasis) ResourceZone MEASURED(BlockB) MEASURED(BlockC) INDICATED INFERRED TOTAL

InitialMeasuredResourceatSesecalculatedat651Mtcoal.

TotalTonnesinsitu* 318Mt 333Mt 1,714Mt 152Mt 2,517Mt

CV(MJ/kg) 16.0 17.6 15.3 15.0

CV(kcal/kg) 3,820 4,200 3,650 3,600

Ash% 34.8 30.2 38.9 39.1

S% 1.7 2.1 2.0 2.2

*GrossInSitutonnesofunweatheredcoallessallapplicablegeologicallosses

TheMeasuredResourceinBlockCisanidealsourceofrawcoaltofueltheSeseIntegratedPower Projectandfutureexpansions.Italsohaspotentialtoproduceanexportproduct. TheMeasuredResourceinBlockBcontainshigherwashingyieldsthatarefavourableforexport productsandregionalsales. TheCompanyiscontinuingitsfeasibilitystudies(bothmineandpowerstation)andenvironmental andsocialimpactassessmentsfortheSeseIntegratedPowerProject,a300MWpowerstationand associated1.5Mtpacoalmine. TheCompanyisalsoprogressingrailstudiesonitsSeseExportProject. TheProspectingLicenceinwhichthedepositoccurshasbeenrenewedbytheHon.Ministerfor MineralsEnergyandWaterResources.

Introduction:
TheSeseCoal&PowerProjectoccursapproximately60kmsouthofFrancistownineasternBotswana (seeDiagram1).Theprojecthasbeensubdividedintotwokeyfocusareas: 1. TheSeseIntegratedPowerProject;aninitial300MWpowerstationandcaptive1.5Mtpacoal minetobepursuedasastandaloneproject.Feasibilitystudiesandenvironmentalandsocial impactstudiesareunderwayforthisprojectanditspotentialexpansion. 2. TheSeseExportProjectwhichisplannedtoexportcoaltoregionalmarketsandtoAsia. Marketingstudiesandanassessmentofrailandportoptionsarecurrentlyunderwayforthis project.

ResourceUpdate:
TheSesecoaldepositwasdiscoveredinmid2010,sincewhichtimeAfricanEnergyhascompleted threecampaignsofdrillingtodelineateaseriesofcoalresources.Thefinalcampaignofresource drillingwasundertakenona500mx500mgridinthenorthernsectionofBlockBandBlockCwiththe goalofdelineatingmeasuredresourcesinthesetwoareasandpredominantlyIndicatedResourceson theremainderoftheprojectwhichwasdrilledtoa1kmx1kmgrid.Todate,atotalof435drillholes havebeencompleted,ofwhich278arediamondcoreholes,andtheremaining157arereverse circulationpercussionholes(Diagram2). ResourcemodellingbytheCompanysconsultantshasnowbeencompleted,andtheCompanyis pleasedtoannouncethefollowingresults:
SeseCoal&PowerProject:ResourceSummary(Rawcoalonanairdriedbasis) ResourceZone MEASURED(BlockB) MEASURED(BlockC) INDICATED INFERRED TOTAL InSitu Tonnes* 318Mt 333Mt 1,714Mt 152Mt 2,517Mt CV (MJ/kg) 16.0 17.6 15.3 15.0 CV (kcal/kg) 3,820 4,200 3,650 3,600 Ash% 34.8 30.2 38.9 39.1 IM% 7.4 7.9 6.6 6.4 VM% 20.4 20.6 18.7 19.5 FC% 37.4 41.4 35.8 34.9 S% 1.7 2.1 2.0 2.2

*TheinsitutonnesrepresenttheGrossInSitutonnagesofcoalafterremovalofweatheredcoal,coalaffectedby doleritedykesandsillsandapplicablegeologicallossfactors

TheresourcesintheabovetablerepresentacombinationofthetonnagesfortheSeseMainseam, whichcomprisesfourplies:theuppermostSSU;thecentralSST,thelowerSSandthethin,basalSSL (Diagram3).DetailsoftheseamsintheMeasuredResourceareasareprovidedinthefollowing sections.

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BlockBMeasuredResource:
DetailsoftheBlockBMeasuredResourceareprovidedinthetablebelow.CoalintheBlockB MeasuredResourceisslightlyshallowerthanBlockC,andisinplacesonly15mbelowsurface,witha maximumdepthtothetopofthecoalof76m(average28.2m).Totalseamthicknessisupto24m,with anaverageof13.6m.ProposedopenpitstripratiosforBlockBarethusverylow. CoalinBlockBMeasuredResourceisofinterestfortheSeseExportProjectduetoitspotentialforlow stripratio,higherinsitucalorificvalueandhigherwashingyieldsthanotherpartsofthedeposit. Washingyieldsforexportproductsinthe2123MJ/kg(5,000to5,500kcal/kg)rangeareupto65%for BlockBSSSeam.
BlockBResourceSummarybySeams(airdriedbasis) ResourceZone BlockBMeasuredSS BlockBMeasuredSSU BlockBMeasuredSST BlockBMeasuredSSL TOTAL InSitu Tonnes 178.5 33.8 97.4 7.9 317.6 CV (MJ/kg) 18.8 13.7 11.6 16.1 16.0 Ash% 26.4 41.9 47.6 36.9 34.8 IM% 8.4 6.5 6.2 6.3 7.4 VM% 21.4 20.4 18.4 20.4 20.4 FC% 43.9 31.2 27.8 36.4 37.4 S% 1.8 1.9 1.2 1.5 1.7

BlockCMeasuredResource:
DetailsoftheBlockCMeasuredResourceareprovidedinthetablebelow.BlockCcoalisatasimilar averagedepthtoBlockB(averagedepthis28.3m),andismarginallythinner(averagethickness12.7m) andthereforehasaslightlyhigherstrippingratio.ThiscoalisfavouredasthesourceoffuelfortheSese IntegratedPowerProjectduetoitsproximitytoexistinginfrastructureandproximitytosolidbasement forthepowerstationfootings.BlockCcoalcanbeusedasarawcoalfeedstockforapowerstation,or canbewashedtoproduceanexportproductandamiddlingforuseinpowerstations.
BlockCResourceSummarybySeams(airdriedbasis) ResourceZone BlockCMeasuredSS BlockCMeasuredSSU BlockCMeasuredSST BlockCMeasuredSSL TOTAL InSitu Tonnes
281.6 17.2 33.1 1.0 332.9

CV (MJ/kg)
18.3 14.9 13.3 9.9 17.6

Ash%
28.1 38.9 42.4 57.2 30.2

IM%
8.1 6.8 6.7 4.6 7.9

VM%
20.6 21.5 20.1 16.7 20.6

FC%
43.2 32.9 30.8 21.5 41.4

S%
2.2 1.8 1.0 1.1 2.1

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 JORCDISCLAIMER:
TheAustralasianCodeforReportingofExplorationResults,MineralResourcesandOreReserves(theJORCCode)setsoutminimum standards,recommendationsandguidelinesforPublicReportinginAustralasiaofExplorationResults,MineralResourcesandOre Reserves.TheinformationcontainedinthisannouncementhasbeenpresentedinaccordancewiththeJORCCodeandreferencesto Measured,IndicatedandInferredResourcesaretothosetermsasdefinedintheJORCCode. TheinformationinthisreportthatrelatestoCoalResourcesfortheSeseCoalDepositisbasedoncoalresourceestimatecompletedbyMr CoenraadDanilvanNiekerk,afulltimeemployeeofGemecs(Pty)Ltd.MrvanNiekerkisamemberoftheSouthAfricanCouncilfor NaturalScientificProfessions(SACNASPNo.400066/98)aswellasaMemberandFellowoftheGeologicalSocietyofSouthAfrica.Hehas morethan36yearsexperienceintheSouthernAfricanCoalandMineralsindustries.MrvanNiekerkhassufficientexperiencewhichis relevanttothestyleofmineralisationandtypeofdepositunderconsiderationandtotheactivitywhichheisundertakingtoqualifyasa CompetentPersonasdefinedbythe2004EditionoftheAustralasianCodeofReportingofExplorationResults,MineralResourcesandthe Orereserves.MrvanNiekerkconsentstotheinclusionintheASXreleaseofthemattersbasedonhisinformationintheformandcontext inwhichitappears.

Foranyfurtherinformation,pleaserefertotheCompanyswebsiteorcontacttheCompanydirectlyon+618 64655500.

Diagram1.LocationofSeseCoal&PowerProjectineasternBotswana
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 Diagram2.Sesecoaldepositshowingresourceblocksreferredtointhetext Diagram3.GeneralisedstratigraphicsectionfortheSeseproject ASX RELEASE | PAGE 5

APPENDIXA:RESOURCEESTIMATIONMETHODOLOGY FieldDataCollection AnalyticalData DataProcessing GeologicalModelling The verified data set was used to construct a new geological model from base principles using the Gemcom MinexTM geological modelling software. A geological structural and coal quality model was built using Gemcom MinexTM modelling software using Gemcom General Gridding algorithm. Minex provides the best geology and mine planning tools for coal and other stratified deposits, ensuring resourcesareevaluatedaccuratelyandminedefficiently. Thefollowingsurfacesweremodelledforeachofthemineablecoalseams: o SeamFloorandRoofElevations; o SeamThickness; o RawAirDriedCoalQualities; o TopographyUsingboreholecollars o LimitofWeathering; o Doleritesills
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A total of 435 drill holes were used in the resource modelling, of which 278 were diamond drill holes and157wereRCpercussiondrillholes.Mostoftheseholesweredrilledverticallyandduetotheirshort nature(16115mendofholedepthrange)werenotdeemedtoneeddownholesurveying. In all blocks, diamond drilling was undertaken on a 1km x 1km grid, and locally a 500m x 500m grid, allowingahighercoresamplingdensity,andasaresultthevastmajorityofresourcehasbeenclassified asanIndicatedResource(1kmgrid)orMeasuredResourcedwherethe500mgridwasused. All drill holes have been surveyed for collar position using differential GPS, and all available holes have been logged with a downhole geophysical probe to collect data at 2cm intervals on natural gamma, densityandholediameter(caliperreading). All drill holes have been geologically logged, with the downhole geophysical data used to assist correlationofthegeologybetweenholes. Senior consultants from Gemecs (Pty) Ltd assessed field procedures during multiple site visits in the secondhalfof2011.

Samples of coal from diamond drill cores were selected for analysis on the basis of geological interval loggingandcorrelationswiththegeophysicallogs,withamaximumsamplelengthof2m. The coal samples were tested at ALS Globals coal laboratory in Witbank, South Africa. Proximate analyses (Calorific Value, Inherent Moisture, Ash Content, Volatile Matter, Fixed Carbon and Total Sulphur)wereundertakenonallsubmittedsamples. Samples from selected holes were then composited into 1 to 2.5m intervals for washing tests at RD intervalsof1.4,1.5,1.6,1.7and1.8or1.5,1.6,1.7,1.8and1.9. Density data for the coal was also measured at ALS Witlab and compared to the densities derived from thedownholegeophysicallogging.

All available borehole and analytical data were imported in GBIS (an industry standard geological boreholedatabasesoftwaredevelopedbyMicromine),andvalidatedaccordingly.

All the potential resource coal seams, namely Sese Seam Upper (SSU), Sese Seam Top (top selection SST), Sese Seam (main selection SS) and Sese Seam Lower (bottom selection SSL) have been modelled, as well as the major dolerite sills. The resource boundaries are based on the occurrence and specific cutoffs of these individual seams. Total seam thickness of the SSU, SST, SS and SSL selected horizons wereusedinthemodellingprocess. Modellingwasundertakenonameshsizeof100mx100macrossthewholeprojectarea.Asurfacegrid of the topography was created using borehole collars. A weathering surface determined by the limit of weathering as recorded in each borehole, was also created. This is a very important surface because it defines the suboutcrop limits and lateral extent of the seams. No coal resources are estimated betweenthesurfacegrid(TOPS)andthelimitofweatheringsurface(LOW). Quality grids for raw as well as washed coal qualities and yields have been modelled. All the reported coal qualities, i.e. CV (Calorific Value MJ/Kg), Ash (Ash %), VM (Volatile Matter %), FC (Fixed Carbon %), IM(InheritMoisture%),TS(TotalSulphur%)andyieldweremodelledforeachseam(ply)toenableraw andwashabilityreporting.Allcoalqualitiesareonanairdriedbasis.

CoalResourceEstimationMethodology ResourceCutoffParameters Thefollowingcriteriawereusedtodefinetheseamlimitsoftheinsituresources: o Minimumseamthicknessof0.5munweatheredcoaltodefineseamlimits. o Acutoffparameterof18%airdriedrawVolatileMatterisusedtoexcludeburntcoalasaresult ofdoleriteintrusions. o ProspectingPermitboundaries. Principally, the main criteria for classification is based on the number of boreholes intersecting a particular coal seam(s) within a specified area and the confidence in projecting the coal quality across eachseambasedontheanalysisperformedonsamplestakenfromthe coresoftheindividualborehole intersections. Classificationwasguidedbythefollowing: o Boreholedensity; o Geologicalandgradecontinuity; o Geologicalstructureanditsinfluenceonmining; o Complexityofthegeology. Geological loss factors were applied to all seams. Losses are expected to occur mainly as a result of intersectionofdoleritedykesandweatheringintheshallowerareas. GEMECSsestimatesofCoalResourcesusethetermsanddefinitionsasproposedbyJORCCode.

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