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: 3 June 2013
· Scoping study about to commence on the Rukwa Coal Project to establish economic and technical parameters for the proposed coal to power project with continued support from the Tanzanian Government
· Field team mobilising to Haneti funded by JV partner Votorantim
· Rationalisation of grass-roots exploration ground to focus on priority target areas and reduce licence fees
Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO), (JSE: KBO), the Tanzania focused mineral exploration and development company, is pleased to provide Shareholders with a technical and management update on its activities in Tanzania. The purpose of this update is to provide a management review of progress at the Company's projects during 2013 to date and its plans for the remainder of the year.
The Board's focus in the year to date has been in advancing its flagship Rukwa Coal to Power project and implementation of its joint venture with Brazilian conglomerate, Votorantim Metaís Participações Ltda ("Votorantim") on the Haneti Nickel project. Satisfactory progress has been made on both projects over the last few months. Over the remainder of 2013, management's focus will continue to be firmly on these projects as the Company prepares to commence a Scoping Study at Rukwa and a work program at Haneti.
In order to prioritise resources and funding for these projects, the Company has decided to defer any significant work on its Lake Victoria, Morogoro and Pinewood projects. Furthermore, following a technical review of its large licence holding the Company has elected in consultation with the Tanzanian Government to relinquish approximately 18,649 km2of its current licence interests (licences, offers & applications). The Company's total licence interests will reduce from approximately 37,000 km2 to 19,000 km2 as a result of the relinquishment. The reduction will result in significant savings in licence fees and allow the Company to focus its resources on priority areas.
Commenting on recent developments and the Company's plans for the remainder of 2013, Kibo CEO Louis Coetzee said: "We are pleased with the fact that the company achieved all its stated strategic objectives for the first six months of 2013 and that we are also on course towards successfully achieving those set for the last six months of 2013. In this regard Kibo is particularly excited about finalising definitive agreements with preferred Korean partner EWP and advancing the Rukwa Coal to Power Project beyond the scoping study stage".
Rukwa Coal to Power project
The Company has been engaged in ongoing discussions with the Tanzanian Government and potential development partners regarding the development of a mouth-of-mine coal thermal power plant ("Rukwa Coal to Power Project"). Encouraging progress has been made in the first half of 2013 with two significant developments announced in March and April respectively:
· The strong expression of support for the project by the Tanzanian Government and its inclusion as a strategic component of the country's national energy strategy
· The disclosure of the letter of intent from Korean Government owned multi-national power company, Korean East-West Power Co. Ltd ("EWP") to participate in the project and commencement of negotiations towards a formal joint venture agreement
These developments have confirmed the Company's confidence in the imperative of Rukwa as a key part of the regional energy strategy, and have also enhanced its ability to attract the investment required for the continued pursuit of the Tanzanian Government's national strategy and the required follow-on technical evaluation of the Rukwa Project. This will consist of a scoping study for which appropriately experienced consultants are currently under consideration. The slight delay in the collaborative process with EWP due to the recent government changes in Korea is expected to have no meaningful impact on the development time frame indicated by the Tanzanian Government at the outset, and a further round of meetings between the Company and EWP has been scheduled for late June 2013.
Rukwa currently contains a JORC-compliant resource of 109 Mt of thermal coal (71 Mt of which is in the Indicated category and 38 Mt in the Inferred category) and it is anticipated that the proposed scoping study will quantify preliminary technical and economic parameters for a mining operation prior to completion of a feasibility study. The Company expects the results of the scoping study to be available towards the end of the year.
Haneti Project
The completion of the Company's joint venture agreement with Brazilian industrial conglomerate, Votorantim was announced in April 2013. Over the last two months resources and procedures to support the joint venture have been put in place and the initial tranche of exploration funding for 2013 has been received from Votorantim.
A field exploration team is currently being mobilised to site and operations will be in full progress by the second week in June. A detailed field exploration programme has been designed and agreed between the Company and Votorantim in order to apply this initial funding as efficiently as possible. A compilation and re-interpretation of all aerial and ground geophysical data available for the project was completed by Votorantim's geophysicists as part of the field programme planning stage and the results of this has enabled the most promising areas to be targeted. The key elements of the exploration programme about to get underway are:
· Priority focus on those localities with elevated nickel (up to 13%) and PGMs (up to 2.3 g/t combined Pt & Pd) within the nickel-PGM-copper prospective Haneti-Itiso Ultramafic Belt identified from the Company's previous work on the project;
· Extension of soil sampling and ground geophysical grids around these localities to further resolve existing drill targets and to generate others;
· Regional exploration comprising geological mapping, soil sampling and stream sampling to target both nickel sulphide and gold mineralisation;
· Diamond drilling on geochemical and geophysical targets at the Mihanza, Mwaka, Kwahemu and Sanato Hills localities. A 1,000m diamond drilling programme is planned over these localities toward the end of 2013 or early in 2014.
The Company will keep the market updated at appropriate intervals over the next few months on the progress of this programme which will run to about the end of November.
Project prioritisation and licence relinquishment
In order to focus its resources, Kibo has prioritised work programmes on the Rukwa and Haneti projects for the remainder of 2013 and work programmes on its other projects have been suspended temporarily. While Haneti remains funded under the Votorantim JV for 2013 and will not require further financing from Kibo, Rukwa will require further expenditure to complete the Scoping Study and together with on-going working capital requirements, the proceeds of the recent Placing for £780,000 will be applied primarily towards initiating the Scoping Study.
The recent unforeseen increase in licence rental costs in Tanzania has made it prohibitively expensive, especially for junior explorers, to maintain large early stage exploration holdings. Based on a comprehensive re-assessment and prioritisation of areas with the highest potential, the Board has decided to reduce its ground holding from 37,000 km2 to 19,000 km2. This reduction in ground holding, most of which is non-priority grass roots exploration areas, has been applied across all its projects.
This significant reduction in ground holding was done in consultation with the Tanzanian Government and becomes effective immediately. The cost saving in rental fees to the Company for 2013 alone is estimated at £143,600, or 37%.
Shareholding Update
Following the Company's recent Placing in April which raised £780,000, the following are the only Shareholders holding more than 3% beneficial interest in the Company to the best of its knowledge.
Name |
Total Beneficial Holding (€) |
% |
Mzuri Capital Group Limited |
19,192,082 |
17.99% |
Sun Mining Limited |
5,923,495 |
5.55% |
Review by Qualified Person
The information in this announcement that relates to the Rukwa mineral resources is taken from a report titled "Independent Technical Report for the Rukwa Coal Project, Mbeya Region, United Republic of Tanzania dated 19th April 2012". This report was prepared for the Company by CD Van Niekerk Pr. Sc. Nat., Director and Principal Geologists with Gemecs (Pty) Ltd. Mr Van Niekerk is registered as a Professional Natural Scientist (Geological Science) with the South African Council for Natural Scientific Professions (SACNASP), Registration No 400066/98, is a Fellow Member of the Geological Society of South Africa (FGGSA) and has extensive experience in coal resource evaluation. Mr Van Niekerk qualifies as a Qualified Person under the AIM and JSE rules. Mr Van Niekerk consents to the inclusion in this announcement of the resource information relating to the Rukwa Coal Project in in the form and context in which it appears.
Contacts
Louis Coetzee |
+27 (0)83 2606126 |
Kibo Mining plc |
Chief Executive Officer |
Andreas Lianos |
+27 (0)83 4408365 |
River Group |
Corporate Adviser and Designated Adviser on JSE |
Jon Belliss |
+44 (0) 20 3216 2630 |
XCAP |
Joint Broker |
Matthew Johnson |
+44 (0) 20 7796 8800 |
Northland Capital Partners Limited |
Joint Broker |
Stuart Laing |
+61 8 94802500 |
RFC Ambrian Limited |
Nominated Adviser on AIM |
Matt Beale |
+44 (0)7966 389196 |
Fortbridge |
Investor Relations |
Updates on the Company's activities are regularly posted on its website www.kibomining.com
General Background & Strategy
Kibo was established in early 2008 to explore and develop mineral deposits in Tanzania, East Africa and was admitted to AIM in London on 27 April 2010 and AltX in Johannesburg on 30 May 2011. The Board of Kibo is composed of professionals whose experience include mineral exploration, mine development, mining finance, tax, law, mergers and acquisitions, and financial control of public companies. It is supported by a competent and motivated Tanzanian staff that operates from Kibo's operations office in Dar es Salaam.
The mineral assets of the Company comprise five projects areas in Tanzania - Haneti (nickel, PGE and gold), Morogoro (Gold), Lake Victoria (Gold), Rukwa (Coal) and Pinewood (Coal & Uranium).
The Haneti project is the subject of a joint venture with Brazilian Votorantim Metais Participações Ltda, a member of Votorantim Group. The Rukwa and Pinewood projects are situated close to the Mtwara Corridor, an area where the Tanzanian Government has committed to significant infrastructure development and which has seen recent multi-million dollar investment in coal and coal-fired power stations and uranium exploration.
The Rukwa project is substantially more advanced than Kibo's existing exploration projects, with a significant Mineral Resource of thermal coal already defined. The project enjoys strong support expressed by the Tanzanian Government for the expedited development of a coal mine and mine-mouth coal-fired power plant.
Kibo's objective is to build shareholder value in a sustainable manner. This objective will be pursued primarily through active exploration of its own projects and by using the Company's experience in Tanzania to acquire attractive exploration and development assets on competitive terms that can be moved swiftly up the value curve by using the Company's own skills base whilst also seeking to benefit from strategic collaborative relationships with industry leaders who have special skills and competencies within their chosen fields of focus. Kibo will undertake continual risk assessment of its projects and take whatever actions it believes are necessary to ensure that these risks are mitigated.
Johannesburg
3June 2013
Corporate and Designated Adviser
River Group
