TIDMKIBO
RNS Number : 5037T
Kibo Mining Plc
21 July 2015
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")
21 July 2015
Mbeya Coal to Power Project
SEPCO III Joint Development Agreement Unconditional and
Funded
Kibo Mining Plc ("Kibo" or the "Company") (AIM:KIBO; JSE AltX:
KBO), the Tanzania focused mineral exploration and development
company, is pleased to announce that all conditions precedent in
the Joint Development Agreement ("JDA") recently signed between the
Company and SEPCO III, have subsequently been met in full and that
the JDA now enjoys unconditional status.
Highlights
-- All conditions precedent in the SEPCO III JDA have been met in full;
-- SEPCO III funding commitments, as called for under the terms of the JDA, fulfilled;
-- Detail work schedule and implementation plan to complete
Bankable Feasibility Study ("BFS") for Mbeya Coal to Power Project
("MCPP") finalised;
Louis Coetzee, Chief Executive Officer of Kibo Mining plc,
commented: "Kibo Mining is delighted to confirm that the JDA with
SEPCO III is now unconditional, funded until completion of BFS and
fully operational. This marks another crucial progressive milestone
in the development of the MCPP. With the JDA now implemented, its
execution will henceforth be Kibo's first priority in the further
development of the MCPP.
The new unconditional status of the JDA with SEPCO III, one of
the world's largest, most technically capable and financially
robust EPC providers, will allow us to conduct and complete the
MCPP BFS at pace and to the highest international standard.
With all the most important strategic MCPP enablers now firmly
in place, we can resolutely focus our entire MCPP effort on
delivery of this robust world class project."
Joint Development Agreement Overview
The remaining conditions precedent in the JDA recently signed
between Kibo Mining and SEPCO III ("the parties"), wherein the
parties have agreed to jointly develop the MCPP, have now all been
met. This latest development follows an intensive joint Kibo /
SEPCO III work and planning session held at the SEPCO III
headquarters in Qingdao China from 15 to 18 July 2015. (Further
information in respect of the JDA and MCPP is provided separately
below. NOTE: Please follow the following link for extensive
background information on SEPCO III:
http://www.sepco3.com/profile/columnsId=1.html )
At the date of signing, the JDA was subject to a number of
conditions precedent which had to be fulfilled before the agreement
could become unconditional. The two most important conditions
precedent were:
-- A due diligence site visit to MCPP in Tanzania, by SEPCO III
- fulfilled and announced to market on 29 April 2015; and
-- Board approval of the JDA by Kibo and SEPCO III respectively
- fulfilled and announced to market on 09 June 2015.
A number of administrative conditions precedent still had to be
met after the 9 June RNS referred to above and the last of these
were fulfilled during the Kibo / SEPCO III work and planning
session, held during the past week at the SEPCO III headquarters in
Qingdao. Upon meeting the last of the conditions precedent, the JDA
became unconditional and as a result it simultaneously also met all
conditions to receive funding as provided for under the terms and
conditions of the JDA (See RNS of 20 April 2015).
During the work and planning session referred to above, Kibo and
SEPCO III also finalised the work and implementation schedules to
ensure the successful and timely delivery of a Bankable Feasibility
Study for the MCPP can be achieved in accordance with the
guidelines and objectives outlined below.
MCPP JDA background
SEPCO III's funding contribution to the MCPP will be made as an
equity investment in the MCPP, to a maximum of 15% of total equity
in the Special Purpose Vehicle ("SPV") which will ultimately hold
the MCPP asset as detailed below. This investment will take the
form of a contribution towards the completion of the Definitive
Feasibility Study and all related activities leading in effect to
the point of financial close.
SEPCO III will retain specfic responsibility to lead the Power
Generation component of the Definitive Feasibility Study and Kibo
will lead the Mining component. It is expected that the Definitive
Feasibility Study across both Mining and Power Generation
components will be completed by October 2015.
During completion of the Definitive Feasibility Study the
partners will collaborate with regard to identification and review
of construction providers and power plant operators to identify
suitable organisations to build and operate the completed MCPP. The
partners will also collaborate to identify, review and confirm the
appropriate financing structure for the MCPP construction process.
In addition, the Definitive Feasibility work will also include
negotiation and agreement of the terms of a Power Purchase
Agreement, Implementation Agreement and Environmental Impact
Assessment with the appropriate Tanzanian Government bodies.
After successful completion of Definitive Feasibility Studies,
and assuming the project is deemed feasible, an SPV will be
established into which the MCPP will be transferred. Kibo Mining
will hold at least 85% of this SPV and SEPCO III up to 15% of total
equity.
SEPCO III will be the sole EPC contractor for the MCPP, subject
to the submission by SEPCO III of an EPC proposal at financial
close, which, when independently evaluated, complies with the
following:
-- The EPC proposal must be price competitive against
international benchmarks for similar EPC contracts; and
-- The EPC proposal must demonstrate international industry best practice standards.
It is anticipated that financing for the MCPP will be available
at a 70% debt to 30% equity gearing ratio. The specific providers
of both debt and equity capital will be identified during the
course of 2015 but only confirmed during financial close in
December 2015. Standard Bank, financial advisors for the MCPP, will
play an integral role in the financing discussions and process.
MCPP Background
Through the MCPP Kibo Mining is seeking to mine a 109Mt NI
43-101 compliant thermal coal resource, utilising this coal for a
mine mouth 250MW to 300MW thermal power station. This project is in
the development stage, with Definitive Feasibility work ongoing.
Various reports have been released on this project in the last
quarter of 2014, as detailed below. The project has the support of
the Tanzanian government at all levels as well as the local
community, and is a key component of the Tanzanian National
Strategic Energy Plan which seeks to resolve the shortage of power
in the country, notably in the Mbeya Region where the project is
located.
MCPP Technical Findings to Date
During Q4 2014 and following the extensive review and analysis
of the MCPP by third party advisors, Competent Persons' Reports
were prepared in respect of both Mining and Power Generation
components of the MCPP. These technical findings are summarised
below:
Mining Component
Completion of Concept Study Report (Stage 1, Phase 1 of the
Definitive Mining Feasibility Study) for the Rukwa Mineral Resource
by Minxcon Projects (Pty) Ltd. Report findings were announced on 9
December 2014, with highlights including:
-- Four alternative options identified for project development
with the project financially feasible for all four alternative
options evaluated;
-- Capital Investment of between US$46 million and US$89 million;
-- Annual coal sale revenues estimated between US$37 million and
US$44 million depending on the selected option;
-- All-in in Cost Margin estimates of 38% to 45% (equates to an
indicative annual margin of US$14.8 million to US$19.4 million);
and
-- NPV of US$116 million to US$141 million at 5.7% discount rate
with payback period 3.9 to 4.7 years.
Thermal Power Station Component
Completion of Power Pre-Feasibility Report by Aurecon. Report
findings were announced on 18 December 2014, with highlights
including:
-- Four thermal plant configurations were assessed with
recommendation for 2 X 150 megawatt Circulating Fluidised Bed
option to be evaluated at Feasibility Study stage;
-- Total capital cost estimated at between US$640 million to
US$760 million depending on plant configuration;
-- Indicative annual power generated (dependent on plant option
selected) between 1,841 gigawatt hours per annum and 1,877 gigawatt
hours per annum;
-- High level environmental risk analyses identified no major obstacles to development;
-- Additional Rukwa Mineral Resource sufficiently large enough
to potentially double the current design size to 600 megawatts or
to be used in alternate energy conversion technologies.
Completion of preliminary base case financial model for MCPP by
the Company as announced on 18 December 2014 with highlights
including:
-- Estimated indicative Life of Plant revenues of approximately US$7.8 billion to US$8.4 billion;
-- Indicative project NPV of between US$230 million and US280 million (at a 15% discount rate);
-- Indicative pre-tax equity IRR > 23%; and
-- Indicative post-tax payback of 8 to 9 years.
Contacts
+27 (0) 83 2606126 Kibo Mining Chief Executive Officer
Louis Coetzee plc
------------------ ------------------- -------------------- ------------------------
Andreas Lianos +27 (0) 83 4408365 River Group Corporate Adviser
and Designated Adviser
on JSE
------------------ ------------------- -------------------- ------------------------
Jon Belliss +44 (0) 207 382 Beaufort Securities Broker
8300 Limited
------------------ ------------------- -------------------- ------------------------
Oliver Morse +61 8 9480 2500 RFC Ambrian Nominated Adviser
Limited on AIM
------------------ ------------------- -------------------- ------------------------
Daniel Thöle +44 (0) 203 772 Bell Pottinger Investor and Media
2500 Relations
------------------ ------------------- -------------------- ------------------------
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 Rukwa, which has a
significant JORC compliant defined resource (See Table 1 below),
and is developing a 250-350MW 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 Standard Bank 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
Coal-Power interim study report to be released in the near term. On
20(th) April 2015, Kibo signed a Joint Development Agreement for
the completion of the Definitive Feasibility Studies and
development of the MCPP with China based EPC contractor SEPCO
III.
The Company also has extensive gold focused interests including
Lake Victoria Goldfields and Morogoro projects. At Lake Victoria,
the Company has projects with a 550,000oz JORC compliant gold
Mineral Resource at Imweru Project (See Table 2 below) and a
168,000oz NI 43-101 compliant gold Mineral Resource at the Lubando
Project (See Table 3 below) in which the Company holds a 90%
attributable interest. 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 prioritised 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 recognises 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
Technical data
Rukwa Mineral Resource
Table 1 below presents a table showing the Mineral Resource
estimate for the Rukwa Coal Project. The table is taken from an NI
43 101-Compliant Report by GEMECS (Pty) Ltd dated April 2012.
Table 1
RUKWA COAL RESOURCE SUMMARY- GEMECS (Pty) Ltd
--------------------------------------------------------
SEAM NI 43-101 IN SITU
---------- ----------------- ---------- -------------
SEAM THICKNESS CLASS MILLION TONS
---------- ----------------- ---------- -------------
S4 1.14 Indicated 2.17
---------- ----------------- ---------- -------------
S3U 2.04 Indicated 6.92
---------- ----------------- ---------- -------------
S3L 2.3 Indicated 12.63
---------- ----------------- ---------- -------------
S2 3.45 Indicated 23.43
---------- ----------------- ---------- -------------
S1U 2.48 Indicated 7.34
---------- ----------------- ---------- -------------
S1L 2.92 Indicated 17.4
---------- ----------------- ---------- -------------
S0 1.08 Indicated 1.44
---------- ----------------- ---------- -------------
Total Indicated Resources 71.34
----------------------------- ---------- -------------
S4 1.31 Inferred 1.38
---------- ----------------- ---------- -------------
S3U 2.24 Inferred 2.94
---------- ----------------- ---------- -------------
S3L 2.27 Inferred 3.86
---------- ----------------- ---------- -------------
S2 3.42 Inferred 7.94
---------- ----------------- ---------- -------------
S1U 2.05 Inferred 6.5
---------- ----------------- ---------- -------------
S1L 3.15 Inferred 12.83
---------- ----------------- ---------- -------------
S0 1.06 Inferred 2.6
---------- ----------------- ---------- -------------
Total Inferred Resources 38.05
----------------------------- ---------- -------------
TOTAL RESOURCES *109.39
----------------------------- ---------- -------------
*Kibo holds 100% of the Rukwa Mineral Resource
Imweru Mineral Resource
Table 2 below presents a table showing the Mineral Resource
estimate for the Imweru Project at a base case economic cut-off
grade for the reporting of the resource of 0.4 g/t. The table is
taken from a JORC-Compliant Report by Tetra Tech EBA dated February
2014.
Table 2
Material Cut- Specific Metric Gold Contained
Area Type Classification off Gravity Tonnes Short Grade Gold Ounces
(g/t) (t) Tons (g/t) (troy)
========= ============= ================== ======== ============ ============ ============ ======== ===============
Laterite Indicated 0.40 2.50 131,000 144,000 1.785 8,000
============= ============================ ======== ============ ============ ============ ======== ===============
Saprolite Indicated 0.40 2.50 706,000 778,000 1.387 32,000
============= ============================ ======== ============ ============ ============ ======== ===============
Bedrock Indicated 0.40 2.89 1,895,000 2,089,000 1.043 64,000
============= ============================ ======== ============ ============ ============ ======== ===============
Central Total Indicated 0.40 2.77 2,732,000 3,012,000 1.168 103,000
========= ============= ================== ======== ============ ============ ============ ======== ===============
Laterite Inferred 0.40 2.50 685,000 755,000 1.317 29,000
============= ============================ ======== ============ ============ ============ ======== ===============
Saprolite Inferred 0.40 2.50 1,047,000 1,154,000 1.040 35,000
============= ============================ ======== ============ ============ ============ ======== ===============
Bedrock Inferred 0.40 2.89 7,838,000 8,640,000 1.029 259,000
============= ============================ ======== ============ ============ ============ ======== ===============
Central Total Inferred 0.40 2.82 9,569,000 10,548,000 1.051 323,000
========= ============= ================== ======== ============ ============ ============ ======== ===============
East Total Inferred 0.40 2.70 2,653,000 2,925,000 1.449 124,000
========= ============= ================== ======== ============ ============ ============ ======== ===============
Indicated 0.4 2.77 2,732,000 3,012,000 1.168 103,000
========================================== ======== ============ ============ ============ ======== ===============
Inferred 0.4 2.79 12,222,000 13,473,000 1.137 447,000
========================================== ======== ============ ============ ============ ======== ===============
Imweru Property Combined
Total (inf+ind) 0.4 2.79 14,954,000 16,485,000 1.143 550,000
======================== ================== ======== ============ ============ ============ ======== ===============
*Kibo holds 90% of the Imweru Mineral Resource
* Total estimates are rounded, based on composites capped at 26
g/t gold at Imweru Central and 25 g/t at Imweru East, the cut-off
grade is based on a gold price of US$1,200 and a 90% metallurgical
recovery is assumed in calculation of cut-off grade. A base case of
0.40 g/t has been selected.
** Classification of Mineral Resources incorporates the terms
and definitions from the Australian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (JORC Code)
published by the Joint Ore Reserve Committee (JORC)
Lubando Mineral Resource
Table 3 below presents a table showing the Mineral Resource
estimate for the Lubando Project at a base case economic cut-off
grade for the reporting of the resource of 0.5 g/t Au. The table is
taken from an NI 43 101-Compliant Report by EBA Engineering
Consultants Limited (now part Tetra Tech EBA) dated August
2009.
TABLE3: LUBANDO MINERALRESOURCE SUMMARY - BASECASE*
-------------------------------------------------------------------------------------------------------
East Zone East Zone
Category West Zone South East Zone North Total
Mid
--------------------------- -------------- ------------- ------------- ------------- -------------
Measured Resource
--------------------------- -------------- ------------- ------------- ------------- -------------
Measured Resource(t) 107,900 4,880 16,900 54,440 184,150
--------------------------- -------------- ------------- ------------- ------------- -------------
Grade(g/t) 1.69 2.52 1.72 2.48 1.95
--------------------------- -------------- ------------- ------------- ------------- -------------
Total Gold(oz) 5,900 400 950 4,340 11,500
--------------------------- -------------- ------------- ------------- ------------- -------------
Indicated Resource
--------------------------- -------------- ------------- ------------- ------------- -------------
Indicated Resource(t) 280,710 18,330 61,000 149,350 509,420
--------------------------- -------------- ------------- ------------- ------------- -------------
Grade(g/t) 1.61 2.23 1.89 2.73 1.99
--------------------------- -------------- ------------- ------------- ------------- -------------
Total Gold(oz) 14,500 1,300 3,700 13,120 32,600
--------------------------- -------------- ------------- ------------- ------------- -------------
Inferred Resource
--------------------------- -------------- ------------- ------------- ------------- -------------
Total Resource(t) 1,090,000 65,470 209,340 535,330 1,900,140
--------------------------- -------------- ------------- ------------- ------------- -------------
Grade(g/t) 1.27 1.56 3.34 3.13 2.03
--------------------------- -------------- ------------- ------------- ------------- -------------
Total Gold(oz) 44,550 3,300 22,500 53,900 124,200
--------------------------- -------------- ------------- ------------- ------------- -------------
*Kibo holds 90% of the Lubando Mineral Resource
* Numbers are rounded. Composites capped at 10.85g/t gold.
Cut-off grade of 0.5 g/t gold based on a gold price of US$850/oz
and assumed 100% metallurgical recovery.CIM definitions were
followed for Mineral Resources.
Pursuant to the terms of an inherited agreement with Barrick
East Africa Exploration LTD (BEAL), Kibo currently has an effective
90% interest in the Imweru and Lubando Project (and thus a 90%
attributable interest in the Imweru and Lubando Mineral Resources
shown in Table 2 and 3 above), with Barrick having a 10% carried
interest up to a decision to mine at which point they have to
contribute or be diluted to a 2% net smelter royalty. BEAL also has
a first right of refusal pursuant to which they can buy the 90%
interest in the project at an agreed market related value after
completion of a Bankable Feasibility Study. Kibo remains the
operator of the project.
Review by Qualified Persons
The information in this announcement that relates to the Rukwa
Coal Mineral Resource is taken from a report titled "Independent
Technical Report for the Rukwa Coal Project, Mbeya Region, United
Republic of Tanzania" dated 19(th) April 2012 by CD van Niekerk
Director and Principal Geologist with the firm GEMECS (Pty) Ltd. Mr
van Niekerk is a Professional Natural Scientist with the South
African Council for Natural Scientific Professions (SACNASP),
Registration No. 400066/98 and a Fellow Member of the Geological
Society of South Africa. He has relevant experience and technical
qualifications to be a "Qualified Person" for reporting coal
resources to the NI 43-101 Standard
Information in this announcement that relates to the Imweru
Mineral Resource is taken from the report titled "Resource Update
for the Imweru Property Geita Region Northern, Tanzania, JORC
Competent Persons Report" dated February 17(th) 2014 (the
"Report"). The Report states a JORC-compliant Mineral Resource
estimate and was prepared for Kibo Mining plc by James Barr P.Geo.
and Darryn Hitchcock P.Geo. Senior Geologist and Geologist
respectively with TetraTech EBA Ltd. Both Mr. Barr and Mr.
Hitchcock are registered as Certified Professional Geologists with
Association of Professional Engineers and Geoscientists of British
Columbia a recognised professional organisation. Mr Barr as
principal author responsible for the Report has experience in the
evaluation and reporting of Archaean Gold projects and is a
"Qualified Person" for reporting gold resources to the JORC
Standard. He consents to the inclusion in this document of the
matters based on his information in the form and context in which
they appears.
The information in this announcement that relates to the Lubando
Mineral Resources is taken from a report titled "Technical Report
on the Lubando property, Mwanza, Tanzania" dated 31(st) August
2009" (the "Report") The Report is NI 43-101 compliant and was
prepared for Great Basin Gold Rusaf Gold Limited by Nathan Eric
Fier C.P.G., P.Eng. Market Director for EBA Engineering Consultants
Ltd and a Senior Mining Consultant. Mr. Fieris registered as a
Certified Professional Geologist with the American Institute of
Professional Geologists, Registration No 10062, and a professional
Engineer in British Columbia, Canada Registration No. 135165. He
has extensive experience in the evaluation and reporting of
Archaean Gold projects.
The Company's Exploration Director, Noel O'Keeffe has reviewed
the resource reports and the references to them in this
announcement.
Johannesburg
21 July 2015
Corporate and Designated Adviser
River Group
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCURARRVAABUAR
Kibo Energy (LSE:KIBO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Kibo Energy (LSE:KIBO)
Historical Stock Chart
From Apr 2023 to Apr 2024
