TIDMKIBO
RNS Number : 6086Z
Kibo Mining Plc
18 December 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')
Dated: 18 December 2017
Kibo Mining Plc ('Kibo' or the 'Company')
Mbeya Coal to Power Project MOU and PPA Update
Kibo Mining Plc (AIM:KIBO; AltX:KBO), the multi-asset African
focused energy and resource company, is pleased to announce that
the newly formed Tanzania Ministry for Energy ('The Ministry') has
committed to an indicative timeline for the completion of the MOU
for the fast-tracking of the Mbeya Coal to Power Project
('MCPP').
Overview
-- Positive briefing between Kibo, General Electric ('GE'), the
Tanzania Electric Supply Company ('TANESCO') and the Deputy
Minister for Energy ('The Deputy Minister') on 14 December 2017 and
subsequent follow-up meeting between Kibo and the Deputy
Minister
-- Discussed strategic importance of the MCPP within the
successful and expeditious execution of the Tanzanian energy
strategy and establishing targeted deliverables towards its
implementation
-- MCPP viewed as the most advanced Independent Power Producer
('IPP') coal power project in the Tanzanian generation projects
pipeline and expected to make a significant contribution towards
achieving the 2020 targets and beyond, through further development
of MCPP Phases II and III
-- Full support for the MCPP: focus on signing MOU with TANESCO
within the next 10 to 12 working days; and agreeing a final Power
Purchase Agreement ('PPA') during Q1 2018
-- Confirmation that priority generation projects are being
fast-tracked as the Tanzanian Government targets the delivery of
5GW installed generation capacity by 2020, with a further 7GW to be
added in the following five years (EWURA, 2016, p 47)(1)
Kibo's CEO, Louis Coetzee, said: "Our focus on positioning Kibo
as a strategic regional electricity supplier gained further
momentum as we continue to strengthen our relationships with
TANESCO, the Ministry of Energy, and General Electric for assisting
in the structure and implementation of the country's new energy
policy and the resultant fast-tracking and development of the MCPP.
We were delighted with the commitment to sign a MOU within 10 to 12
working days and the prospect to finalize the PPA in Q1 2018, which
will allow us to materially advance the project level financing
talks we have been conducting. I understand that there has been
frustration with the delays we have been experiencing, however we
believe these latest very positive outcomes reiterate the strong
commitment from all the MCPP stakeholders to see the MCPP come to
fruition in the shortest possible time, given the complex
procedural and bureaucratic environment of the current development
phase of the MCPP."
Over the course of the past three months a series of meetings
have been held with the Ministry for Energy in Dar es Salaam
between representatives of Kibo, TANESCO, the Minister for Energy
and the Deputy Minister to discuss the progress made with regard to
previously agreed milestones and deliverables towards the
completion of the MCPP. The latest meeting, held on 14 December
2017, also had General Electric ('GE'), one of Kibo's strategic
partners, in attendance and confirmed the Ministry's strategy to
fast-track all priority generation projects as it focused on
delivering 5GW installed generation capacity by 2020, with a
further 7GW to be added in the following five years. The bulk of
the first 5GW is to be developed as base load capacity, with coal
fired power forming the backbone of all base load power
facilities.
Accordingly, the Ministry confirmed the strategic importance of
the MCPP in the successful and expeditious execution of its energy
strategy. The MCPP is considered as one of the most advanced IPP
coal power projects in the Tanzanian generation projects pipeline
and it is expected to make a significant contribution towards
achieving the 2020 target and beyond, through further development
of MCPP Phases II and III.
To take advantage of the current favourable funding window of
opportunity created by Kibo through the use of innovative strategic
partnerships, the Ministry reiterated its full support for the MCPP
and acknowledged the urgency to complete the PPA process for the
MCPP in the shortest possible time. To this end, and following the
recent approval of the MOU by the Board of TANESCO, the Ministry
provided a firm undertaking to complete the remaining
administrative process and signing of the MOU within the next 10 to
12 working days. The Ministry also confirmed its intention to
fast-track the PPA negotiations and agree a final PPA during Q1
2018.
**ENDS**
For further information please visit www.kibomining.com or
contact:
Louis Coetzee louisc@kibomining.com Kibo Mining Chief Executive
Plc Officer
Andreas Lianos +27 (0) 83 River Group Corporate Adviser
4408365 and Designated
Adviser on JSE
Jon Belliss +44 (0) 207 Beaufort Securities Broker
382 8300 Limited
Andrew Thomson +61 8 9480 RFC Ambrian NOMAD on AIM
2500 Limited
Isabel de +44 (0) 207 St Brides Investor and
Salis / Priit 236 1177 Partners Ltd Media Relations
Piip Adviser
This announcement contains inside information as stipulated
under the Market Abuse Regulations
(EU) no. 596/2014 ("MAR").
Notes to editors:
The Mbeya Coal to Power Project ('MCPP'), comprises the
development of the Mbeya Coal Mine, a 1.5Mt p/a mining operation
and the Mbeya Power Plant, a 300 MW mine-mouth thermal power
station.
The Mbeya Coal Mine has a defined 120.8 Mt NI 43 101 thermal
coal resource. A Definitive Feasibility Study has been conducted on
the project which underpins its value with an indicated IRR of
69.2%. The 300 MW mouth-of-mine thermal power station has long term
scalability to 1000MW, with a full Power Feasibility Study that has
been completed, highlighting an annual power output target of 1,8
GW based on annual average coal consumption of 1.5 Mt. An
Integrated Bankable Feasibility Study report for the entire project
indicated total potential revenues of US$ 7.5-8.5 billion over an
initial 25-year mine life, post tax equity IRR between 21-22%, debt
pay-back period of 11-12 years and a construction period of 36
months.
To assist in the execution this critical power project of the
MCPP, Kibo has assembled a team of international team of advisors
and partners including Engineering Procurement and Construction
('EPC') contractors and financial teams that are assisting in the
development of. These include ABSA/Barclays as Financial Advisor,
China based EPC contractor SEPCO III, General Electric, Tractebel
Engineering (Power), Minxcon Consulting (Mining) and legal advisors
Norton Rose Fulbright.
Johannesburg
18 December 2017
Corporate and Designated Adviser
River Group
(1) EWURA (2016) POWER SYSTEM MASTER PLAN 2016 UPDATE. Dar Es
Salaam. Available at:
http://www.ewura.go.tz/wp-content/uploads/2017/01/Power-System-Master-Plan-Dec.-2016.pdf.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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