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: 19 January 2015
Memorandum of Understanding - Morogoro
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 it has entered into a Memorandum of Understanding ("MOU") for a 50/50 Joint Venture ("JV") with Metal Tiger plc ("Metal Tiger") on the Company's Morogoro South gold-prospective exploration portfolio in Tanzania ("Morogoro Portfolio"). The Morogoro Portfolio has a number of exploration rights in central Tanzania, consisting of 18 licences, offers, applications and tenders covering a combined surface area of approximately 1,400 square kilometres.
Louis Coetzee, Chief Executive Officer of Kibo Mining plc, commented: "We are delighted to announce this MOU that builds upon our existing working relationship with Metal Tiger. When established, this JV will mean that all five of the Company's projects will be active and operational, which puts the Company in a superb position and means shareholders can look forward to news flow across the entire breadth of the Company's assets.
We are also pleased to agree the warrant component of the JV, including the key price escalator clause. The working arrangement with Metal Tiger has already seen £450,000 cash with no expenses, injected directly into Kibo Mining in the last 7 weeks. This additional cash has further strengthened our financial position which is extremely helpful as we engage with third parties to conclude commercial transactions on our projects.
Kibo Mining is fundamentally healthy and more advanced than ever in its history. We intend to make that count for shareholders."
Background
Under the MOU Metal Tiger has up to and including 20 February 2015 to complete its due diligence process and within which period the parties are to complete and sign a binding JV agreement. The terms of the MOU would see Metal Tiger pay for the ongoing licence renewal fees and other maintenance costs for a minimum of 12 months (estimated to be approximately US$100,000 p.a.) and up to a maximum of 3 years within which timeframe Metal Tiger is to expend a total of US$800,000 on project costs (including licence renewal fees) and an agreed exploration work program, to maintain its 50% interest in the JV. Should Metal Tiger expend less than a total of US$800,000 whilst maintaining the Morogoro Portfolio licences, but not less than US$300,000 then Metal Tiger's 50% interest in the JV will revert to a 10% free carry interest on the Morogoro Portfolio. Should Metal Tiger expend less than US$300,000 in total then Metal Tiger's total interest in the JV shall revert back to Kibo.
As part of the JV, should it proceed, Kibo will issue Metal Tiger with warrants over 10,000,000 new ordinary shares in Kibo, exercisable within a three-year term at an exercise price of 9p each but subject to a mechanism to increase the warrant exercise price in the event Kibo's share price trades at a significant premium as follows:
· In the event that Kibo's listed closing mid-market share price on the AIM market of the London Stock Exchange ("AIM") exceeds 18 pence (£0.18) per share for a consecutive period of 15 days in which AIM is open, then the exercise price of any unexercised warrants shall increase from 9 pence (£0.09) to 14.5 pence (£0.145);
· In the event that Kibo's listed closing mid-market share price on AIM exceeds 27 pence (£0.27) per share for a consecutive period of 15 days in which AIM is open, then the exercise price of any unexercised warrants shall increase to 19 pence (£0.19).
Gold Prospective Joint Venture Areas - Morogoro South
Jubilee Resources LTD, a wholly owned subsidiary of Kibo Gold Limited, itself a wholly owned subsidiary of Kibo Mining Plc (LON: KIBO), owns a portfolio of gold prospective mineral licences for exploration in Tanzania (collectively the "Morogoro South Portfolio").
The Morogoro South Portfolio is located in the emerging goldfield of the Morogoro-Dodoma-Handeni region within a 90 kilometre radius of the city of Morogoro, Tanzania. The portfolio consists of 18 licences, offers, applications and tenders with a combined surface area of approximately 1,400 square kilometres.
Key Terms of the Memorandum of Understanding
Following completion of the due diligence period by/on 20 February 2015and the parties entering into the JV agreement as outlined in the MOU, the parties are to operate under a 50/50 Joint Venture of the gold-prospective properties that form the Morogoro South Portfolio, as follows:
· Metal Tiger is to acquire 50% of Kibo Gold Limited or its duly appointed nominee ("KB Gold"), a 100% wholly owned subsidiary of Kibo Mining plc that owns the Morogoro South Portfolio for a consideration of £1.
· Metal Tiger is to meet the expenses in relation to the licence renewal fees and other maintenance costs of the Morogoro South Portfolio for a minimum of 1 year (estimated to be approximately US$100,000 p.a.) and up to a maximum of 3 years.
· Metal Tiger is to expend the first US$800,000 under the JV in expenses and exploration relating to the Morogoro South Portfolio, at which point costs moving forward are shared 50/50 between the parties.
· Should Metal Tiger elect to not continue with the JV after the minimum term of one year, or fail to expend US$100,000 by the first anniversary of the JV, or should Metal Tiger fail to expend the full expenditure by the third anniversary of the JV then:
o if less than US$300,000 of the agreed expenditure, the 50% interest in the JV owned by Metal Tiger shall revert back to KB Gold subject to them exercising a claw-back option;
o if greater than US$300,000 of agreed expenditure, Kibo shall have the right to exercise the claw-back option in respect of Metal Tiger's interest in KB Gold, however Metal Tiger shall retain a 10% free carry interest in the Morogoro South Portfolio.
· At any time following the first anniversary of the JV, on not less than 90 days' notice to Kibo, Metal Tiger may elect to cease sole funding of the JV expenditure.
The acquisition by Metal Tiger of the interest in KB Gold is conditional, inter alia, on:
· by not later than 20 February 2015 Metal Tiger conducting, and confirming in writing that it is satisfied (at its sole discretion) with the results of the legal, financial and technical due diligence investigations to be undertaken by Metal Tiger in relation to the Morogoro South Properties and KB Gold; and
· Kibo and KB Gold procuring all necessary consents from the regulatory authorities in Tanzania.
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 Abigail Wayne |
+44 (0) 20 3693 1470 |
Hume Capital Securities Plc |
Broker |
Oliver Morse and Trinity McIntyre |
+61 8 9480 2500 |
RFC Ambrian Limited |
Nominated Adviser on AIM |
Daniel Thöle Lucinda Alderson |
+44 (0) 203 772 2500 |
Bell Pottinger |
Investor and Media 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 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 Rukwa with an integrated Coal-Power interim study report to be released in the near term.
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, with Preliminary Economic Assessment study findings to be released in the near term.
Kibo also holds the Haneti Project on which the latest technical report confirms prospectivity for nickel, PGMs, gold and strategic metals including Lithium. The company is undertaking a geochemical review of the project, the results of which will be available in the near term.
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.
Finally the Company also holds the Morogoro (gold) 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
Area |
Material Type |
Classification |
Cut- off (g/t) |
Specific Gravity |
Metric Tonnes (t) |
Short Tons |
Gold Grade (g/t) |
Contained Gold Ounces (troy) |
Central |
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 |
Total |
Indicated |
0.40 |
2.77 |
2,732,000 |
3,012,000 |
1.168 |
103,000 |
Central |
|
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 |
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 |
|
Imweru Property Total |
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 |
Combined (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* |
Category |
West Zone |
East Zone South |
East Zone Mid |
East Zone North |
Total |
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 19th 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 17th 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 31st 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
19 January 2015
Corporate and Designated Adviser
River Group
