Botala Increases Stake in Botswana’s Serowe CBM Project

Thursday, April 18, 2024

Botala has agreed to acquire the remaining 30% of the Serowe Coal Bed Methane (CBM) Project from its joint venture partner Pure Hydrogen Corporation Limited. Additionally, the two companies have renewed their Memorandum of Understanding (MOU) to progress early-stage assessment and development of potential hydrogen projects within Southern Africa.

The Serowe Project consists of ~420,000 hectares of prospecting licenses in the Karoo-Kalahari Basin.  Botala is exploring and developing the CBM potential, aiming to locate high-graded focus areas, or “sweet spots”, and developing procedures to stimulate CBM flows in commercially attractive volumes.

Key Points Overview:

• Strategic acquisition of Pure Hydrogen’s 30% Interest in Serowe CBM Project: Botala has executed an unconditional share sale agreement, making Botala the sole owner of this high-potential project.
• Strategic MOU with Pure Hydrogen: MOU with Pure Hydrogen solidifies the collaborative efforts to investigate and develop hydrogen projects, leveraging the Serowe Project for hydrogen production and refueling business expansions.
• Share Issuance and Milestone Payment: As consideration for the acquisition, Botala will issue 14.5 million shares to Pure Hydrogen across two tranches, along with a milestone payment contingent on agreed reserve certifications.
• Joint Venture and Hydrogen Highway Development: Botala’s joint efforts with Pure Hydrogen in the

Botswana H2 venture aim to establish a hydrogen and renewables joint venture to manufacture, store, market and distribute hydrogen and renewable energy in Southern Africa, based in Botswana.

• Conditions Precedent and Key Considerations: All agreements and ventures (other than the share sale agreement, which is unconditional) are subject to regulatory approvals, shareholder consent and other conditions as outlined in the respective agreements. The MOU remains subject to proving the Serowe CBM Project can deliver gas at an agreed price.

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