TIDMKIBO
RNS Number : 1621A
Kibo Mining Plc
18 December 2014
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: IE00B61XQX41
("Kibo" or "the Company")
Dated: 18 December 2014
Power Pre-Feasibility Study Report - Rukwa Coal to Power
Project
Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX:
KBO), the Tanzania focussed mineral exploration and development
company is pleased to announce the findings from the Power
Pre-Feasibility Study ("PPFS) report for the Rukwa Coal to Power
Project ("RCPP").
Key Highlights
The PPFS report was prepared by Aurecon on behalf of the Company
and findings include the following:
- four plant configurations were assessed, with a base case
technology comprising 2 x 150MW Circulating Fluidised Bed (CFB)
recommended for further development in Feasibility;
- sufficient additional coal resources are available from Rukwa
to potentially expand the power station to double the current
design size or to be used in alternate energy conversion
technologies such as coal to liquids;
- a technical and environmental risk assessment was undertaken
which unanimously recommended further development of the project
via feasibility analysis;
- total project cost, dependent on the plant option selected, is
estimated between US$640 million and US$760 million;
- modelling was undertaken based on conservative "base-load"
assumptions (80% capacity factor) to predict annual generation
profiles over the plant life. Indicative annual power generated,
dependent on plant option selected, will be between 1,841GWh per
annum and 1,877GWh per annum.
Based on the parameters discussed above, the Company has decided
to proceed with the definitive feasibility stage of the Power
Definitive Feasibility Study ("PDFS") as recommended by Aurecon.
Drawing relevant data from the PPFS and the Definitive Mining
Feasibility Study: Phase 1, Stage 1 Report, the Company also
prepared an internal preliminary financial model as a base case
financial model, to be verified in respect of the 300MW power plant
and coal mine base case, during the ensuing definitive feasibility
studies. Publication of detailed financial information on the RCPP
is at present commercially sensitive, based on early stage
assumptions with regard to power generation volumes, pricing,
capital and operating costs and therefore not ready for public
dissemination. Highlights of the indicative base case financial
model which Kibo has used to inform its decision on whether to
proceed with the definitive feasibility stage of the PDFS
include:
- Indicative power generation revenues, over an assumed 25 year
plant operation, of approximately US$7.8 to US$8.4billion;
- Indicative pre-tax equity IRR in excess of 23%;
- Indicative post-tax payback of approximately 8 to 9 years;
- Indicative project NPV range at a 15% discount rate of US$230 to US$280 million.
The preliminary financial model and information discussed above,
comprises the Company's internal financial base case for the RCPP.
This base case will now be provided to the Company's independent
financial and technical advisors on the RCPP, for proper
assessment, evaluation, validation and adjustment during the
definitive feasibility study stage of the PDFS. The commercial and
financial figures discussed above should therefore not in any way
be construed as a financial forecast of any kind.
Louis Coetzee, CEO of Kibo Mining plc said "This Power
Pre-Feasibility Study work represents an acutely critical part of
the RCPP. We are delighted that the report received demonstrates
the robust nature of the project from a technical perspective. The
purpose of the PPFS is, in part, to identify any major technical
flaws that could be project fatal. This report has confirmed no
such flaws were identified.
We are particularly pleased with project robustness, because the
RCPP is a clear opportunity for Kibo to assist the Tanzanian
government in its striving for energy solutions to address the
energy supply deficit in Tanzania. Access to power provides
enhancement to everyday life domestically and commercially. This
project above all can deliver safe and reliable base-load power to
the Tanzanian people and commercial enterprises benefitting the
national socio-economic development plan. The RCPP is a strategic
catalyst for the economic development regionally as well as
nationally and hence our resolute drive to successfully complete
this coal/power project.
Notwithstanding societal benefit, any commercial development of
this magnitude must have robust financials and project economics.
This has rightly been made all the more challenging by our desire
to offer cost effective power for users. The data currently
available from the Definitive Mining Feasibility Study report, a
summary of which was released to market on 11(th) December 2014, is
now supplemented by the data we have gathered from the Power
Pre-Feasibility Study and associated internal financial modelling.
Indicative project revenues, capital payback, deliverable margin
estimates, free cash flow forecasts, project NPVs and IRR estimates
appear to be attractive for both the Company as well as its
potential clients. In our opinion this is best illustrated by our
base case IRR data which highlights a pre-tax equity IRR in excess
of 23%, which is substantially above levels of return which have
attracted investment in the past and the average IRR for similar
projects in the same geographic area where the RCPP will be
located.
The technical quality and financial robustness of the project
were expected to be very strong, but the reports received have
still exceeded expectations. As a result, the intensity and nature
of partner discussions have intensified with a considerable degree
of justifiable competitive tension as a consequence".
Important Notes for Readers
We would refer readers to our Definitive Mining Feasibility
Study announcement of 11(th) December 2014 and the Executive
Summary Report published on our website covering the Phase 1, Stage
1 Report dealing with the mining component of the RCPP.
We would ask readers to note that the Company is engaged in
highly confidential discussions with various parties, including
regulatory authorities, for whom the release of detailed financial
information may cause a breach of confidentiality and normal
commercial sensitivity and may therefore harm the Company's ability
to complete negotiations on the best terms for shareholders.
The specific financial information provided is an extract from
an early stage economic assessment of the RCPP made for the
purposes of deciding whether to extend the study work undertaken on
the RCPP to date. The economic assessment is based on input
assumptions which will require extensive testing and are likely to
be subject to significant change as the feasibility study process
progresses.
Contacts
Louis Coetzee +27 (0) 83 2606126 Kibo Mining Chief Executive Officer
plc
------------------ ------------------- ---------------- ------------------------
Andreas Lianos +27 (0) 83 4408365 River Group Corporate Adviser
and Designated Adviser
on JSE
------------------ ------------------- ---------------- ------------------------
Jon Belliss +44 (0) 20 3693 Hume Capital Broker
Abigail Wayne 1470 Securities
Plc
------------------ ------------------- ---------------- ------------------------
Oliver Morse +61 8 9480 2500 RFC Ambrian Nominated Adviser
and Trinity Limited on AIM
McIntyre
------------------ ------------------- ---------------- ------------------------
Daniel Thöle +44 (0) 203 772 Bell Pottinger Investor and Media
Lucinda Alderson 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 NI43-101 compliant defined resource (See Table 1
below), and is developing a 250-350MW mouth-of-mine thermal power
station with an established management team that includes Standard
Bank as Financial Advisor. Kibo is undertaking a Coal Mining
Definitive Feasibility Study with Stage 1 Phase 1 positive results
now released and a Power Pre-Feasibility Study for Rukwa with
initial positive findings already released. The Company is now
engaged with a number of major Independent Power Producers and
other organisations and seeking to secure a commercial partnership
or partnerships, to finalise feasibility work across the project
and move toward the construction phase.
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 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, with
Preliminary Economic Assessment study findings to be released in
the near term. As part of the Kibo Gold Portfolio, Kibo also holds
the Morogoro Gold project where the company is seeking a Joint
Venture partner to continue active exploration activities at this
highly prospective opportunity.
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 signed a MOU to enter 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 Centraland 25 g/t at Imweru East, the cut-off
grade isbased on a gold price of US$1,200 and a 90% metallurgical
recovery is assumed in calculation of cut-offgrade. A base case of
0.40 g/t has been selected.
** Classification of MineralResources incorporates the terms and
definitions from the Australian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (JORC Code) published
bythe 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
18 December 2014
Corporate and Designated Adviser
River Group
This information is provided by RNS
The company news service from the London Stock Exchange
END
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