TIDMKIBO
RNS Number : 8136U
Kibo Mining Plc
23 January 2017
Kibo Mining Plc (Incorporated in Ireland)
(Registration Number: 451931)
(External registration number: 2011/007371/10)
Share code on the JSE Limited: KBO
Share code on the AIM: KIBO
ISIN:IE00B97C0C31
("Kibo" or "the Company")
January 23, 2017
Kibo Announces Completion of Integrated Bankable Feasibility
Study
Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX:
KBO), the Tanzania focused mineral exploration and development
Company, is pleased to announce finalization of the Integrated
Bankable Feasibility Study ("IBFS") with the delivery of the
Integrated Financial Model for the Mbeya Coal to Power Project
("MCPP").
The IBFS comprises an integration of the Definitive Mining
Feasibility Study ("DMFS"), the Definitive Power Feasibility Study
("DPFS"), the Integrated Financial Model for the MCPP and all other
relevant technical studies on the MCPP done to date, inclusive of
the financial outcomes from the power EPC agreement.
The IBFS concluded that the MCPP is financially, technically and
operationally a very robust project.
Key highlights from the IBFS are set out below:
- Total capital requirement for the integrated project reduced
21.1 % from the original integrated prefeasibility study ("IPFS")
figure;
- Indicative MCPP total revenue over an assumed 25-year life of
project (Note: the final life of project will be fixed by the final
Power Purchase Agreement ("PPA")) of approximately US$7.5 to US$8.5
billion;
- Indicative post tax Equity IRR between 21% and 22%, an
increase of 11% on the indicative IPFS post-tax Equity IRR, based
on the following conservative debt assumptions:
(R) Debt tenor: 12 years;
(R) All in interest rate (post construction): 10%; and
(R) DSRA facility: 6 months
- Post tax Project IRR ranging between 14.7% and 16%;
- Indicative post-tax payback:
(R) Equity Payback period: 4 to 5 years
(R) Debt Payback Period: 11 to 12 years
- Sufficient additional coal resources available from the Mbeya
Coal Mine to expand the power station to more than double the
current design size and plant life. In this regard, the plant
design already makes provision for a future second stage expansion
to 600MW (i.e. a further 300MW of capacity with the potential for a
third stage expansion of a further 400MW in the long term).
- Technical and environmental risk assessment confirmed
construction-ready state of the project, with no 'red flags' on the
environmental side, bearing in mind the clean coal nature of the
plant design.
- The MCPP can be constructed and commissioned within the
previously projected schedule duration of 36 months.
The following comprise key highlights from the MCPP definitive
feasibility studies (as reported previously):
- Mining
(R) 122Mt Coal Resource of which 85.9% of stated resource
qualifies for inclusion in any future reserve statement. Of this,
39Mt is included in the Pit Design, and is sufficient to satisfy
the required indicative coal requirement of 39Mt for 30 years. The
Mbeya Coal product exceeds standard technical requirements of the
power plant.
(R) Application of the Mbeya Coal Ltd Special Mining License
submitted to the Ministry of Energy and Minerals is aimed at
securing 70Km(2) of Mining Area
(R) Financial Viability of the Mbeya Coal Resource
demonstrated
-- IRR of 69.2%
-- Payback period 2.4 years
-- Peak funding requirement of USD17 million
-- All-in cost margin of 39% - (all-in cost margins of above 25%
are considered healthy by Kibo)
-- Power Station coal requirements reduced by 23% from that
identified in MPFS bringing significant environmental and cost
benefits
(R) Modified Terrace Mining (free dig truck & shovel
overburden, continuous miner coal) confirmed as the most accurate
and cost effective for the coal mine, and key to optimized mining
and power financials
- Power (1)
(R) Required calorific value: 12.85 GJ/t.
(R) Net power generated: 1,840 GWh/a
(R) Coal Consumption: 1,497,432 tpa (As Fired)
(R) Limestone Consumption: 110,359 tpa
(R) Water Consumption: 4,273,207 lpa
(R) Solid Waste Incl Ash: 679,306 tpa
(1.) GWh/a: Gigawatt hours per annum; tpa: tons per annum; lpa:
liter per annum.
Notes to Readers.
Readers are referred to Kibo RNS dated 10 March 2015 as well as
related announcements on the DMFS and DPFS released to date and
also to related supporting data / information published on Kibo's
website www.kibomining.com
The Company remains restricted in its ability to release certain
detailed information relating to the IBFS due to the fact that the
Company is engaged in highly confidential discussions with various
parties, including regulatory authorities. The release of certain
detailed financial information could result in a breach of Kibo's
confidentiality obligations, and is commercially sensitive. This
could harm the Company's ability to successfully complete
negotiations.
The financial information provided in this announcement is a
limited extract from the MCPP IBFS that has been conducted to
determine the bankability of the MCPP. These figures however remain
subject to further evaluation and testing during PPA and funding /
investment negotiations which are currently underway. As a
consequence, there is likely to be further changes to the figures
as the various business streams progress and conclude.
Louis Coetzee, CEO of Kibo Mining, said: "We are extremely
pleased with the positive results from the IBFS. The IBFS comprises
the DMFS, DPFS and Integrated Financial Model, and as can be seen,
the results are materially different from those received
previously. The significant improvement in the various IRR figures
exceeds management expectations and will without doubt attract
favorable attention from potential investors.
The IBFS results shows the MCPP to be equally strong and robust
in respect of the fundamental requirements of all the various
stakeholder interests in the MCPP. This puts the Company in a
strong position in its ongoing discussions / negotiations with
regard to the final PPA as well as with potential funders /
investors in the MCPP.
With independent confirmation on the bankability of the MCPP,
the Company expects to see a significant increase in interest and
support from potential investors and other stakeholders in the
MCPP."
Contacts
Louis Coetzee +27 (0) 83 Kibo Mining Chief Executive
2606126 plc Officer
------------------- ---------------- -------------------- ---------------------
Andreas +27 (0) 83 River Group Corporate Adviser
Lianos 4408365 and
Designated Adviser
on JSE
------------------- ---------------- -------------------- ---------------------
Jon Belliss +44 (0) 207 Beaufort Securities Broker
382 8300 Limited
------------------- ---------------- -------------------- ---------------------
Oliver +61 8 9480 RFC Ambrian Nominated Adviser
Morse 2500 Limited on AIM
------------------- ---------------- -------------------- ---------------------
Liz Morley +44 (0) 203 Bell Pottinger Investor and
/ 772 2500 Media Relations
Anna Legge
------------------- ---------------- -------------------- ---------------------
Kibo Mining - Notes to editors
Kibo Mining is listed on the AIM market in London and the AltX
in Johannesburg. The Company is focused on exploration and
development of mineral projects in Tanzania, and controls one of
Tanzania's largest mineral right portfolios. Tanzania provides a
secure and stable operating environment for the mineral resource
industry and Kibo Mining therein.
Kibo Mining holds a thermal coal deposit at Mbeya, which has a
significant NI 43-101 compliant defined resource, and is developing
a 250-350 MW mouth-of-mine thermal power station, the Mbeya Coal to
Power Project ("MCPP"), previously called Rukwa Coal to Power
Project ("RCPP"), with an established management team that includes
ABSA / Barclays as Financial Advisor. Kibo is undertaking a Coal
Mining Definitive Feasibility Study and a Power Pre- Feasibility
Study for the Mbeya project with an integrated Bankable Feasibility
Study report for the MCPP to be released in the near term. On 25
August 2016, Kibo signed an Agreement with China based EPC
contractor SEPCO III granting it the right to become the sole
bidder for the EPC contract to build the power plant component of
the MCPP in exchange for SEPCO III refunding 50% of the development
costs incurred by Kibo to date on the project. Kibo has already
received the first tranche of this funding in the amount of US$1.8
million on the 5th September 2016
The Company also has extensive gold focused interests including
Lake Victoria Goldfields and Morogoro projects. At Lake Victoria,
the Company has 100% owned projects with a 550,000 oz. JORC
compliant gold Mineral Resource at the Imweru Project and a 168,000
oz. NI 43-101 compliant gold Mineral Resource at the Lubando
Project. The Company is currently undertaking a Definitive
Feasibility Study on its Imweru Project.
Kibo also holds the Haneti Project on which the latest technical
report confirms prospectivity for nickel, PGMs, gold and strategic
metals including lithium.
Kibo Mining further holds the Pinewood (coal & uranium)
project where the company has entered into a 50/50 Exploration
Joint Venture with Metal Tiger plc.
Finally, the Company also holds the Morogoro (gold) project
where the company has also entered into a 50/50 Exploration Joint
Venture with Metal Tiger plc.
The Company's projects are located in the established and gold
prolific Lake Victoria Goldfields, the emerging goldfields of
eastern Tanzania and the Mtwara Corridor in southern Tanzania where
the Government has prioritized infrastructural development
attracting significant recent investment in coal and uranium. The
Company has a positive working relationship with the Tanzanian
government at local, regional and national levels and works hard to
maintain positive relationships with all communities where company
interests are held. The Company recognizes the potential to enhance
the quality of life and opportunity for Tanzanian citizens through
careful development of its projects.
Updates on the Company's activities are regularly posted on its
website www.kibomining.com
Johannesburg
23 January 2017
Corporate and Designated Adviser
River Group
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCQXLBLDFFZBBQ
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