Kibo Mining Plc (Incorporated in Ireland) (Registration Number: 451931)
(External registration number: 011/007371/10)
Share code on the JSE Limited: KBO
Share code on the AIM: KIBO
ISIN: IE00B97C0C31
("Kibo" or "the Company")
Dated: 16 November 2017
Kibo Mining Plc ('Kibo' or the 'Company')
UPDATED MCPP MOU TO FAST-TRACK DEVELOPMENT AND IMPLEMENTATION OF POWER PURCHASE AGREEMENT
Kibo Mining Plc (AIM: KIBO; AltX: KBO), the multi-asset resource, development and energy company focused on Tanzania, is pleased to announce that, following consultation with the Tanzanian Ministry of Energy and the Tanzania Electric Supply Company ('TANESCO'), is was agreed to update the existing Memorandum of Understanding ('MOU') re a Power Purchase Agreement ('PPA') for the development and implementation of the Mbeya Coal to Power Project ('MCPP'), to provide for a more streamlined process with materially shorter time lines for PPA finalisation.
The Company has been in very constructive engagement with the Tanzanian Government and TANESCO over the past two months (see recent RNS') to conclude the updated MOU that will govern the process to agree and implement the PPA. All stakeholders have recognised that the development and implementation of a PPA for the MCPP must be expedited quickly given the significant delays over the past year, as well as the strategic importance of the MCPP. As a result, all parties have agreed to replace the original MOU and update it to streamline the process for conclusion of the PPA. This updated MOU has subsequently been approved and confirmed in writing by the board of TANESCO, and authorized for immediate implementation.
Accordingly, the approved updated MOU has now been submitted to all other concerned parties, i.e. Ministry of Energy and the Attorney General, for endorsement before final signing by Kibo and TANESCO. This remaining administrative process is already underway, and the Kibo Board believes it will be completed imminently. Kibo anticipates providing further information on the material details of the updated MOU and the expedited time lines therein once the updated MOU has been fully executed.
Kibo Mining Plc CEO, Louis Coetzee, said, "This agreement underlines the recognition by all stakeholders that the MCPP project is of national importance and that there was a need to define a faster process to reach formal agreement on a PPA via the MOU. Both the Ministry of Energy and TANESCO recognise the importance of reaching a final PPA for the MCPP as soon as practically possible and that the delays in the finalisation of the MOU and subsequent PPA had to be addressed by a reassessment of the conditions precedent to ensure that the PPA is expedited and crystalized for the benefit of all stakeholders. In the confirmation letter received, TANESCO emphasised the strategic importance of the MCPP, as well as their support and full commitment to ensure that the expedited timelines in the updated MOU, along which the PPA is to be agreed and finalised, are indeed met.
We continue to work with all parties, including SEPCO III and GE to execute the milestones associated with MCPP and I would like to thank all our shareholders and stakeholders for their support and look forward to updating them on further developments as we progress and build value for them and Tanzania.".
**ENDS**
For further information please visit www.kibomining.com or contact:
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 |
Andrew Thomson |
+61 8 9480 2500 |
RFC Ambrian Limited |
NOMAD on AIM |
Isabel de Salis / Priit Piip |
+44 (0) 207 236 1177 |
St Brides Partners Ltd |
Investor and Media Relations Adviser |
Notes to editors:
Kibo Mining is a multi-asset resource development and energy company focused on South West Tanzania, listed on London's AIM market and the AltX in Johannesburg. The Company's flagship asset is the Mbeya Coal to Power Project ('MCPP'), which comprises the development of the Mbeya Coal Mine, a 1.5Mt p/a mining operation and the Mbeya Power Plant, a 300 MW mine-mouth thermal power station.
The Mbeya Coal Mine has a defined 120.8 Mt NI 43 101 thermal coal resource. A Definitive Feasibility Study has been conducted on the project which underpins its value with an indicated IRR of 69.2%. The 300 MW mouth-of-mine thermal power station has long term scalability to 1000MW, with a full Power Feasibility Study that has been published highlighting an annual power output target of 1,8 GW based on annual average coal consumption of 1.5 Mt. An Integrated Bankable Feasibility Study report for the entire project indicated total potential revenues of US$ 7.5-8.5 billion over an initial 25-year mine life, post tax equity IRR between 21-22%, debt pay-back period of 11-12 years and a construction period of 36 months.
To assist in the execution this critical power project of the MCPP, Kibo has assembled a team of international team of advisors and partners including Engineering Procurement and Construction ('EPC') contractors and financial teams that are assisting in the development of. These include ABSA/Barclays as Financial Advisor, China based EPC contractor SEPCO III, General Electric, Tractebel Engineering (Power), Minxcon Consulting (Mining) and legal advisors Norton Rose Fulbright.
Kibo also holds the Haneti Project on which the latest technical report confirms prospectivity for nickel, PGMs, gold and strategic metals including lithium and Rare Earth Elements.
Kibo Mining's projects are located in central Tanzania and in 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. Kibo Mining recognises the potential to enhance the quality of life and opportunity for Tanzanian citizens through careful development of its projects.
This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no. 596/2014 ("MAR").
Johannesburg
16 November 2017
Corporate and Designated Advisor
River Group
