TIDMKIBO
RNS Number : 5193E
Kibo Mining Plc
05 November 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")
05 November 2015
Shareholder Operational Update: Third Quarter 2015
Kibo Mining Plc ("Kibo" or the "Company") (AIM: KIBO; JSE AltX:
KBO), the Tanzania focused mineral exploration and development
company, is pleased to announce an operational update for the third
quarter 2015 (the "Quarter").
HIGHLIGHTS FOR THE QUARTER AND CEO COMMENTS
- Mbeya Coal to Power Project ("MCPP") :
ü Joint Development Agreement ("JDA") between Kibo and SEPCOIII
becomes unconditional
ü Completion of Mining Pre-feasibility Study on MCPP; project
fundamentals surpassed earlier Concept Study report
ü Power component of the MCPP advanced in terms of partner
participation and planning for definitive feasibility study
ü Significant progress in negotiation and planning with respect
to Financial Close for the MCPP, which is approaching
completion
- Haneti geophysical interpretation results indicate nickel
sulphide prospective rocks are significantly more extensive than
previously thought; and identifies additional drill targets
- Exploration work on the Company's two Joint Ventures with
Metal Tiger PLC commenced (Morogoro and Pinewood)
- Highlights from interim results for the period ended 30 June 2014:
ü Decrease in trade and other payables of 311%; and
ü Placing funds of GBP526,000, locked down since March due to
appointment of Administrator to Company's former broker (Hume
Capital), to be released to Kibo within two months
Louis Coetzee, C.E.O. of Kibo Mining commented:
"2015 has been one of the most difficult periods in recent
history for junior mining companies. Kibo has however been able to
not only weather the storm, but has consistently advanced all the
Company's projects. This quarterly update demonstrates that the
Company increased its momentum despite trying times.
The Company's cash flows have been carefully managed following
Hume being placed under administration. The delay in receiving the
placing funds as a result of this had no impact on Kibo's
operations and all uncertainty with regard to receipt of the funds
has since been removed.
The MCPP advanced significantly, and this is best reflected in
the continued progress made towards concluding critical commercial
arrangements for the project to ensure optimal value creation on
the Company's flagship asset. These efforts were in turn strongly
supported by the ongoing feasibility work that is still continuing
at pace. With the most important strategic elements now in place
for the MCCP, Kibo is now focussing its entire effort on achieving
Financial Closure for this world class project.
Both the Metal Tiger joint ventures are active and making good
progress. The Morogoro Project holds significant potential to host
economically viable deposits and in the Pinewood Project Kibo
provides exposure to the potential for a resurgence of interest in
the Uranium sector.
Significant breakthroughs were made at Haneti, with the
interpretation and modelling of the data that produced exciting
results, showing the HIUC rocks occur over a far greater strike
length than previously thought. This work enabled the prospectivity
of Haneti for nickel sulphide mineralisation to be enhanced
significantly, at minimum cost, and provides a more detailed
picture of the sub-surface extent and geological structure."
KIBO OPERATIONS AND PROJECTS - DETAILED UPDATE FOR QUARTER 3
Hume Update
Pursuant to the terms of a notice (the "Notice") to clients
(including Kibo) dated 20th August 2015 on the procedures
pertaining to the distribution of the Client Money Pool, the Joint
Special Administrators of Hume Capital notified Kibo that monies
will be distributed by earliest on the 2nd October 2015 (the "Date
of Proving"), but no later than within two months from the 2nd
October 2015.
As previously announced, Kibo understands that substantially all
of the GBP526,000 (representing the consideration for 10,520,000
shares which were to be issued to third party investors) which had
been paid into Hume Capital's client money account, will be
released to Kibo, less a small proportion representing costs of the
administration.
Mbeya Coal to Power Project
JDA
Kibo announced on 21 July 2015 that all conditions precedent in
the JDA recently signed between the Company and SEPCO III, have
subsequently been met in full and that the JDA now enjoys
unconditional status, marking another crucial progressive milestone
in the development of the MCPP. This will allow Kibo to conduct and
complete the MCPP BFS at pace and to the highest international
standard.
Mining:
The Mining Pre-Feasibility Study which comprises Phase 1 of the
Mbeya Definitive Mining Feasibility Study ("MDMFS") was completed
during July 2015. The study delivered decisive results across all
technical and environmental parameters. Mining efficiency and
effectiveness will be enhanced with the mechanised continuous
surface miner having proved to be a viable option and, the
suitability of the overburden to be stripped by free digging,. The
use of the continuous surface miner also indicates a significant
positive environmental impact by eliminating washing of coal,
whilst free digging avoids the use of explosives and blasting. The
fact that the project's mine design avoids river diversion (as
opposed to the earlier design assumption) is a further significant
positive environmental impact. The key technical conclusions from
the PFS were:
- Selected mining method - modified terrace mining method, with
overburden removal by means of a free dig (truck and shovel)
method, and coal seam and inter burden mining by means of
mechanised continuous surface mining method
- Limited processing in the form of destoning of product required
- River diversion as identified in the Concept Study proven
unnecessary in Pre - Feasibility Pit Optimization and Mine
Design
- Four alternative mining options for the selected mining method
identified, with the Project financially feasible for all of the
options investigated.
The Company and its advisers Minxcon Projects, after having
completed a financial optimization study subsequent to the latest
MCPP mining feasibility results, and assessing the impact of
optimal gearing for the MCPP coal mine based on the surface miner
contractor option, announced on 12 October 2015 the following :
- All-in cost margin ranges from 47.9% to 48.1%. Applying the
aforementioned all-in cost margin, Kibo interprets that annual
earnings before interest and tax ("EBIT") of between US$ 23.5
million to US$ 23.6 million will be generated;
- Applying a real discount rate of 5.51%, the best estimated Net
Present Value ("NPV") of free cash flow to equity ranges between
US$ 214 million and US$ 219 million;
- Equity IRR (leveraged) range between 131% and 146%, with a Project IRR of 54%;
- Cash return on capital invested ranging between 726% and 732%; and
- Project Payback Period before loan of 2.6 years.
Kibo announced on 15 October 2015, completion of Phase 1 of the
Mbeya Definitive Mining Feasibility Study (MDMFS). This phase, a
geotechnical drilling programme, was a critical work stream of the
final Stage of the broader Mbeya Coal to Power Project, Mining
Feasibility Study, and included:
- 820 meter diamond core drill programme to confirm slope angles of pit design
- Metallurgical sampling programme to verify specific coal
properties, required for detail design requirements of power
station
- Additional data obtained from drill programme to enable
restatement of Mbeya Coal Resource during Phase 2 of MDMFS
- Samples from the drilling programme are currently being
analysed in the appropriate geotechnical and coal laboratories.
Results of the laboratory analyses will be used as design inputs in
both the mine and power designs
Power
- The Power PFS was completed by end of FY 2014. All planning
and preparation for the next phases of the PFS is complete
- The process to facilitate permitting, certification and
licensing, intensified during the reporting period, with increased
interaction and negotiations with TANESCO and the Ministry for
Energy and Minerals ("MEM")
- The planned continuation of the Definitive Power Feasibility
Study ("power DFS") was briefly interrupted during the period
required to ensure that the JDA reaches unconditional status by end
of Q2. Substantial planning and preparation regarding technical and
developmental work was however done in the meantime which
included
ü Defining the full Scope of the Power Feasibility Study
ü Defining roles and responsibilities for the Power Feasibility
Scope of Work
ü It is expected that the Power DFS will immediately resume full
operational status upon completion of the above process.
Imweru Project (Gold)
As the gold market continues to experience significant downward
price pressure, the Company is currently proceeding cautiously with
its gold projects, pending improved market gold sentiment. The
Imweru DFS is being continued at a reduced pace.
Morogoro Project (Gold)
The Morogoro soil sample batch laboratory analysis was
integrated into existing geological reports. A revised exploration
programme is under review by the joint venture partners. As
reported earlier, this exploration program, together with ongoing
regional mineral potential evaluation work is aimed to test the
gold anomalies identified in the Ruvu Nappe area in 2012 and
includes an early stage exploration drilling programme. The
sampling results re-confirmed Block A as the first priority target
of the exploration program. Going forward, the following activities
are planned:
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- Follow up detailed soil geochemistry over targets identified
in Matombo region (Block A southern strike extension)
- Exploration pits and trenches in the Matombo area
- Ground magnetic survey over Matombo area, Block A and southern extension
- First pass exploration drilling in the Matombo area, Block A
- Detailed geological mapping to continue in all areas
- Recognisance mapping the areas west of Morogoro
- Stream sediment sampling and rock chip sampling in the areas west of Morogoro
The exploration programme schedule, upon approval of the
programme by the joint venture partners should run for
approximately 7 months.
If the outcome of the above programme is satisfactory, the
programme would be regarded as ready and justified for a follow -
up phase of Resource Delineation drilling.
Lake Victoria Project - (Excluding Imweru)
As the gold market continues to experience significant downward
price pressure, the Company is currently proceeding cautiously with
its gold projects pending improved market gold sentiment.
Consequently work on the Company's early stage Lake Victoria
projects was kept to the minimum required for care and maintenance
during the period.
Pinewood Project (Uranium)
Work on the Pinewood Joint Venture Project commenced during the
Quarter. It comprised a review and update of the historic technical
reports prepared in respect of the Pinewood portfolio and existing
uranium deposits in the region to assist in designing and
implementing the next field exploration campaign.
Haneti Programme
Kibo has received the final report from an independent Airborne
Geophysical Data Interpretation carried out over its Haneti project
in central Tanzania. The results from the preliminary findings were
announced on the Company's RNS dated 24 June 2015.
- The final report confirms the location, strike extent and
internal structure of two newly interpreted composite
mafic-ultramafic zones extending significantly the previously known
"footprint" of the Haneti-Itiso Ultramafic Complex (HIUC);
- The newly outlined mafic-ultramafic zones, with strike lengths
of approximately 30 km (Southwest Zone) and 10-20 km (Northwest
Zone) occur to the Southeast and the Northwest of the central 80 km
long (strike length) HIUC respectively and may represent folded
repetitions and fault off-set extensions of the HIUC;
- Modelling of the high magnetic anomaly over the Mihanza drill prospect shows that the magnetic susceptibility increases with depth and the prospective rocks extend to 800 m which indicates the potential for a significant volume of nickel prospective target rock at this location alone;
- The data from the geophysical study will continue to be
evaluated both in-house and by the Company's consultants to assist
with geological modelling, new ground acquisition exploration
targeting and exploration programme design.
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
-------------------- ------------------- -------------------- ------------------------
Bell Pottinger Investor and Media
Daniel Thöle +44 (0) 203 772 Relations
/ Anna Legge 2500
-------------------- ------------------- -------------------- ------------------------
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.
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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.
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