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")
02 June 2016
Kibo Signs MOU with Lake Victoria Gold LTD to Fast Track Development of the Imweru Gold Project
Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX: KBO), the Tanzania focused mineral exploration and development Company is pleased to announce that it has signed a Memorandum of Understanding ("MOU") with Lake Victoria Gold LTD ("Lake Victoria") to consolidate the companies' respective Imweru and Imwelo gold projects.
Highlights
· | Kibo and Lake Victoria Gold LTD ("LVG") agree MOU to amalgamate Kibo's Imweru Gold Project and LVG's directly adjacent Imwelo project into a new company ("NEWCO); |
· | Board of NEWCO to comprise mix of Kibo and Lake Victoria management which will combine significant experience across exploration and mine development; |
· | Total combined JORC compliant stated resources of approximately 755,300 ounces; |
· | Based on upside potential identified in existing Imweru CPR, the combined project will provide NEWCO with the potential to achieve >1 million oz. resource in relative short time frame; |
· | Production target of 50,000 oz. of gold per annum within 12 to 18 months of forming NEWCO, targeting 100,0000 oz. per annum within 24 to 30 months; |
· | Existing LVG mining right will also cover Kibo Imweru project after amalgamation under existing provisions of Tanzanian Mining Act for continuous mineral deposits; |
Louis Coetzee, CEO of the Company, commented today: "The past two years' steady work on the Imweru DFS advanced the Imweru project to a level where we could come to an arrangement with Lake Victoria Gold, which will see the amalgamation of the respective projects on a like for like basis, to create a project with critical mass and a clear path to near-term production.
Amalgamation of the two projects will establish a project with a significant gold resource with the added strategic advantage of an existing mining right and the opportunity to pursue near-term production. At a resource level we believe that the combined project can reach more than a 1 million oz. resource. This view is based on the resource expansion potential identified in the latest Imweru competent persons report. According to this report the Imweru resource can be increased with a further 40% to 80% through an already defined 3rd phase exploration programme. From a production perspective the combination of the two projects also provides the potential to achieve a 100,000 oz, per annum production target.
I am particularly excited about the gold mine development and production expertise that LVG will bring to the enlarged project, which will complement Kibo's exploration experience.
We believe that the proposed transaction can unlock significant value for Kibo shareholders and we will be updating shareholders on an ongoing basis as we progress with the implementation and execution of the Kibo / LVG MOU."
Summary Details
Kibo and Lake Victoria Gold Ltd (together the "Sponsors") have today signed an MOU establishing the terms and conditions under which it intends to amalgamate its Imweru and Imwelo gold projects by vending both projects into a new company "NEWCO". The objective for the amalgamation is to fast-track the development of a gold mine on the project based on the combined existing stated resource base of approximately 755,000 oz gold. The initial board of NEWCO will consist of the following members: Louis Coetzee (Kibo/ Executive Chairman) Seth Dickinson (Lake Victoria/Chief Executive Officer; Bjorn Zikarsky (Lake Victoria/ Financial Director); Noel O' Keeffe (Kibo); and Louis Scheepers (Kibo). It is the intention of the Sponsors that the MOU will be followed by a definitive agreement by no later than 30 June 2016.
Background Imweru and Imwelo Projects
Kibo's Imweru Gold Project and Lake Victoria's Imwelo Gold Project are located in the gold prolific Lake Victoria Goldfield of northern Tanzania, approximately 35 km west of AngloGold Ashanti's world class Geita Mine (estimated pre-mining gold endowment of 23 Moz at 4g/t) and within a similar geological setting, prospective for Archaean age "greenstone" hosted gold mineralisation.
Since acquiring the Imweru project in 2013, Kibo carried out additional resource drilling in late 2013 leading to the publication of a new Mineral Resource statement of 16,485,000 tonnes at 1.143 g/t (550,000 oz) in February 2104. Following positive results from economic modelling, both in-house and by its consultants, Kibo announced the commencement of a Definitive Feasibility Study ("DFS") on the project in October 2014. Since then it has completed a Preliminary Economic Assessment (Refer RNS dated 9 Feb 2015) and commenced a Pre-Feasibility Study (Refer RNS dated 8 April 2015) which together will comprise the first stage of the DFS. The positive results from these studies to date have established the potential economic viability of Imweru to sustain a mine development over 7-10 years, potential to expand the current Mineral Resource and hence the Life of Mine for another 6 years and the potential for the discovery of additional satellite resources within the greater Imweru project block.
Lake Victoria Gold's Imwelo gold project is located along strike and contiguous with Kibo's Imweru project. Imwelo effectively forms an extension of Kibo's Imweru East Mineralised Zone (Refer RNS of 24 February 2014) and has a published JORC Mineral Resource of 205,200 oz. at a grade of 2.3 g/t of which 90,800 oz. is in the Measured and Indicated Categories. Lake Victoria were granted a Mining Licence over the project licence in January 2015 which should enable mine development to progress rapidly. Taken together, Kibo's Imweru and Lake Victoria's Imwelo mineral resource represent an amalgamated resource of approximately 755,200 oz at a grade of 1.5 g/t.
The proposed amalgamation of the two projects will provide significant synergistic benefits for the development of a gold mine both in regard to the enlarged resource and exploration potential of the combined projects and the particular competencies of Kibo and Lake Victoria in exploration and mine development respectively. The enlarged project is also expected to present an attractive investment opportunity in a period of renewed interest in the gold sector. Given the current development status of the respective projects, it is the intention of the project sponsors to have the project in production, with a production target of 100,000 ounces per annum, within 24 to 30 months from the date of formal amalgamation.
Maps showing the location of the Imweru and Imwelo projects can be found on the Kibo website www.kibomining.com under the Projects/Lake Victoria (gold) menu on the home page.
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 Rukwa Coal to Power Project ("RCPP"), 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
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 Central and 25 g/t at Imweru East, the cut-off grade is based on a gold price of US$1,200 and a 90% metallurgical recovery is assumed in calculation of cut-off grade. A base case of 0.40 g/t has been selected.
** Classification of Mineral Resources incorporates the terms and definitions from the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) published by the Joint Ore Reserve Committee (JORC)
Review by Qualified Persons
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 appear.
Johannesburg
02 June 2016
Corporate and Designated Adviser
River Group
