Positive Integrated Pre-Feasibility Study Report

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: IE00B97C031

("Kibo" or "the Company")

 

 

Dated: 10 March 2015

 

 

Rukwa Coal to Power Project - Positive Integrated Pre-Feasibility Study Report

Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX: KBO), the Tanzania focussed mineral exploration and development company is pleased to announce positive findings from the Integrated Pre-Feasibility Study Report ("IPFS") for the Rukwa Coal to Power Project ("RCPP").

 

Highlights:

 

-    Coal Mining and Power Generation technical reports now consolidated into single project report for the RCPP;

-     RCPP demonstrated to be robust at key consolidated financial, technical and operational levels;

-    Significant upward scalability in respect of power station size and life as well as additional coal use opportunities;

-    The IPFS report completes this key technical stage in the ongoing feasibility work on the RCPP, with confirmation of the indicative commercial value of the project.

 

 

Louis Coetzee, CEO of Kibo Mining plc said "Completion of the IPFS marks a significant stage for the RCPP, drawing together the technical findings from the Coal Mining and Power Generation elements, into a consolidated report. The IPFS provides a further, more in-depth technical review stage, with the results once again confirming the robust nature of the RCPP and enabling the project to pass yet another milestone with flying colours.  

 

With the validation of RCPP fundamentals the IPFS substantially increases confidence in the project, to the benefit of the Company and relevant third parties. Completion of this stage of the RCPP feasibility work considerably enhances the inherent value of the RCPP and is an important factor in finalizing commercial partner discussions. 

 

We would reaffirm to investors that our commercial negotiations continue actively. We are managing this process carefully, with our main focus being the conclusion of a joint development agreement at the earliest possible opportunity. In this regard the Company recently held separate project site visits at the RCPP, with prospective partners. Further updates will follow."

 

 

 

 

IPFS Summary:

The IPFS draws together the findings of the coal mining and power generation technical reports, into a consolidated technical report covering the entire RCPP project. This stage of the technical review aims at demonstrating whether the project is viable at the consolidated level, rather than purely at the coal mining or power generation stages of the RCPP. 

 

The IPFS report utilised: the Power Pre-Feasibility report prepared by Aurecon (inclusive of a pre-feasibility level environmental impact assessment study); the Concept Study report of the Definitive Mining Feasibility Study, prepared by Minxcon; and the internal financial model for the RCPP, based on the findings and results from the aforementioned feasibility reports and developed in conjunction with the Company's financial advisors.

 

The IPFS confirmed the fundamentals of the consolidated RCPP, demonstrating the viability of the project overall and thereby substantially increasing confidence levels in the ability to successfully develop and deliver the project.

 

Specifically, the IPFS has considered, validated and confirmed the following consolidated project fundamentals as previously announced by Kibo:

 

-    The RCPP is robust at financial, technical and operational levels with four alternative development options identified and investigated for the RCPP, with all four development options proving to be financially, technically and operationally feasible;

 

-     Indicative RCPP revenue range over an assumed 25 year life of project of approximately US$8 to US$8.5 billion;

 

-     Indicative pre-tax equity IRR above 23%;

 

-    Indicative post-tax payback, excluding any mitigation from potential Government concessions and incentives, of approximately 7.5 to 9 years for RCPP;

 

-     Indicative project NPV range at a 15% discount rate of US$250 to US$280 million;

 

-     Sufficient additional coal resources available from Rukwa, to potentially expand the power station to more than double the current design size and plant life and / or to be used in alternate energy conversion technologies such as coal to liquids;

 

-    Technical and environmental risk assessment did not identify any high risk concerns and unanimously recommended further development of the project via feasibility analysis;

 

-    The RCPP can be successfully constructed and commissioned within the current projected timelines for completion;

 

-    Feasibility work done to date already covers a significant amount of work beyond the standard industry scope, required for pre-feasibility compliance.

 

Important Notes for Readers

Readers are referred to our Definitive Mining Feasibility Study announcement of 11^th December 2014, our announcement on the Power Pre-Feasibility Study, dated 18 December 2014 as well related supporting data and information published on our website.

 

We would ask readers to note that the Company is still engaged in highly confidential discussions with various parties, including regulatory authorities, for whom the release of certain detailed financial information may cause a breach of confidentiality and normal commercial sensitivity and may therefore harm the Company's ability to successfully 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 be the subject of further rigorous evaluation and testing during the remaining feasibility study work and are likely to undergo further change as the feasibility study process progresses.

 

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	+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.

 

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 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.

 

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 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

10 March 2015

Corporate and Designated Adviser

River Group