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")
04 May 2016
Results for Power Definitive Feasibility Study - Mbeya Coal to Power Project
Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX: KBO), the Tanzania focussed mineral exploration and development company is pleased to announce results from the Power Definitive Feasibility Study ("PDFS") for the Mbeya Coal to Power Project ("MCPP"). This announcement should be read in conjunction with previous RNS statements dated 18 and 30 December 2014 reporting on the completed Power Definitive Pre - Feasibility Study, as well as the most recent announcement dated 29 April 2016.
Key Highlights
The PDFS report was prepared by Tractebel Engineering on behalf of the Company. Key findings include:
- Primary base case recommended by the Power Pre-Feasibility Study ("Power-PFS"), i.e. Circulating Fluidized Bed boiler technology, 300MW configured as 2 x 150MW units, accepted as optimal selection for final design of the Mbeya Power Station;
- Pre-Feasibility Study annual production target of 1 840 GWh confirmed;
- Annual average coal consumption confirmed at 1 497 432 tonnes per year, utilising Run - of Mine ("ROM") product from the co-located mine site and within mine design parameters;
- Total estimated project cost confirmed well below cost estimate stated in Power-PFS;
- Minor technical concerns identified during Power-PFS were all eliminated during the PDFS;
- Based on recently restated Mbeya coal resource, the PDFS includes provision for near-term expansion of the power station to at least 600MW;
- Positive PDFS results will further improve the already strong financial feasibility figures of the MCPP; and
- Receipt of final PDFS-report initiates final development phase of the MCPP financial model, required for the integrated MCPP Bankable Feasibility Study
Louis Coetzee, CEO of Kibo Mining plc said "The PDFS is the cornerstone of the MCPP and the positive results confirm the very robust fundamentals of the MCPP. The Mining and Power-Pre Feasibility Studies provided us with early indications that the MCPP holds the promise of strong technical, operational and financial fundamentals and the PDFS has confirmed this. We are particularly keen to see to what extent the PDFS results will improve the financial fundamentals of the project, once the integrated financial model has been updated with the PDFS and Mining Definitive Feasibility Study results.
The completion of this study is also a critical milestone in the MCPP development process. With the PDFS in place, the final development phase of the Integrated Bankable Feasibility Study will commence and the parallel work streams in the MCPP feasibility programme can now be completed. (See process diagram at: MCPP Timeline & Description)
The PDFS and parallel work streams referred to above represent the significant work we have done, and continue to do, in de-risking the project and in improving confidence levels. As a key value driver for Kibo, the PDFS is the strongest statement yet in this regard.
We look forward with confidence to Financial Close."
Background
The MCPP is an integrated coal to power project and to realize full value from it, Kibo commissioned an established team that includes Tractebel Engineering ("Tractebel" or "TE") to conduct the Power Definitive Feasibility Study related to the Power Component of the Mbeya Coal to Power Project, i.e. a 2 x 150 MW coal-fired power plant. Kibo also appointed Minxcon Projects ("Minxcon") as coal mining consultant, Shangoni Management Services ("Shangoni") as environmental consultant for the Environmental and Social Impact Assessment, and Standard Bank ("SB") as financial advisor for the Bankable Feasibility Study, including the financial model. This team is working on building the complex project case to prove feasibility of the MCPP.
The PDFS comprises the technical study of a 2 x 150 MW coal-fired power plant ("Plant" or "Power Plant") as well as a grid impact study conducted by Tractebel. The primary fuel resource for the project is coal from the adjacent Mbeya Coal Mine. (RNS 11 April 2016)
The Power Plant is designed for a capacity of 300 MW gross consisting of two identical units of 150 MW gross. Each unit will consist of a boiler with associated combustion system and flue gas treatment, a steam turbine generator, a water cooled condenser with a wet mechanical draft cooling tower, and a step-up transformer.
The boiler will be designed utilizing circulating fluidized bed (CFB) technology, with in- furnace limestone injection for the sulphur dioxide (SO2) emission control (i.e. desulphurization of flue gas). A further advantage of this arrangement is that the favorable combustion characteristics of a CFB boiler will achieve an optimally low emission of nitrogen oxides (NOx), ensuring compliance with World Bank Standards. Dust particles will be captured in a back-end fabric filter.
The Plant will also comprise common facilities including a common flue gas stack, a raw water treatment plant, a waste water treatment plant, a coal storage and handling system, an ash buffer storage and handling system, a limestone storage and handling system, a liquid fuel storage (start-up fuel), an auxiliary oil-fired boiler (if required), a black start diesel generator, a 220kV electrical substation, a compressed air plant and a fire fighting system.
A dry ash disposal area will be installed in the vicinity of the Power Plant site, with an impervious layer to prevent leachate from entering the ground water, and a settlement pond will be required to treat rainwater runoff before release. Ash disposal into the mined out voids in the mine pit is also considered jointly with the mining feasibility study as a practical alternative.
Non-process buildings including an administration building, workshop, warehouse and canteen will be built at site. A living compound for operations and maintenance personnel, integrated with mine personnel, will be built in the direct vicinity of the mine and power plant.
The generated power will be evacuated by the TANESCO grid through a dedicated 220kV overhead line of about 90 km which is to be erected and connected to a new Mbeya substation to be built by TANESCO.
The construction phase will last about 36-37 months from Notice to Proceed to provisional acceptance of the first unit commissioned. Different options for the Plant Operation and Maintenance ("O&M") have been envisaged. Performing the O&M through an O&M Agreement to a third party is the preferred solution.
The Plant is expected to operate in base load. However, part load operation and operational flexibility is required to comply with the grid requirements. The Plant is designed to operate continuously under all site ambient conditions, burning all coals from the design range supplied by the Mbeya Coal Mine.
As availability and reliability of the Plant and individual equipment is of major importance, plant redundancy will be such that a failure of any single component (excluding main equipment of the power block) will not cause the unit to trip. In this regard, a black start diesel generator is foreseen to allow for the start-up of the Plant independently of power supply from the grid.
The primary water supply to the Power Plant will be from the coal mine dewatering arrangement. This water will consist of groundwater and rainwater pumped out of the mining area to treatment ponds, from where it will be supplied to the Power Station. The secondary water supply will be from the abundant groundwater available in the area. Boreholes and adequate pumping arrangements will be established for this purpose.
The Power Plant, as well as the "Balance of Plant", inclusive of the plant operation will be designed to be compliant with World Bank and Tanzanian environmental, health and safety standards.
The annual input and output quantities are given in Table 3-4 below.
Parameter |
Units |
2x150 MW Plant |
Net power generated |
GWh/y |
1 839 |
Coal consumption |
t/y |
1 497 432 |
Limestone consumption |
t/y |
110 359 |
Water consumption |
t/y |
4 273 207 |
Solid by-products (bottom and fly ash) |
t/y |
679 306 |
Important Notes for Readers:
The information contained within this report is taken from the PDFS produced by Tractebel in respect of the MCPP. Recognising the level of commercial sensitivity and for the protection of all stakeholders' interests we have limited the technical and financial information that we publish in this report and in the wider public domain at this time.
Readers must note that operational and financial data pertaining to any complex development project of this nature is project specific. Kibo has undertaken the MCPP PDFS to properly and professionally understand the technical and financial merits of the project. The findings outlined can only be used in an assessment and analysis of the MCPP to which this work relates and not necessarily as a generic benchmark standard.
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) 207 382 8300 |
Beaufort Securities Limited |
Broker |
Oliver Morse |
+61 8 9480 2500 |
RFC Ambrian Limited |
Nominated Adviser on AIM |
Daniel Thöle / Anna Legge |
+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 Mbeya, which has a significant NI 43-101 compliant defined resource, and is developing a 250-350 MW mouth-of-mine thermal power station, the Mbeya Coal to Power Project ("MCPP"), previously called Mbeya Coal to Power Project ("MCPP"), 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 Bankable Feasibility Study report for the MCPP to be released in the near term. On 20th 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 550,000 oz. JORC compliant gold Mineral Resource at Imweru Project and a 168,000 oz. NI 43-101 compliant gold Mineral Resource at the Lubando Project 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 prioritized 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 recognizes 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
Johannesburg
04 May 2016
Corporate and Designated Adviser
River Group
