Wrap Text
PEA Update – Imweru Gold Project
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: 10 February 2015
PEA Update - Imweru Gold Project
Kibo Mining Plc ("Kibo" or the "Company") (AIM:KIBO; JSE AltX: KBO), the Tanzania focused
mineral exploration and development company, is pleased to announce the findings of the
Preliminary Economic Assessment ("PEA") (Stage 1, Phase 1, Concept Study) in respect of the
Company's Lake Victoria Goldfields Imweru Gold Project. The Company also wishes to
announce that Stage 1, Phase 2 (the Pre-Feasibility Study) of the Imweru Definitive Feasibility
Study ("DFS"), will now commence immediately. The PEA formed the first element of the
Definitive Mining Feasibility Study, being undertaken by Minxcon Projects, on behalf of the
Company.
Highlights from the PEA for the Imweru Gold Project:
* Workable base case for accelerated development of the Imweru Gold Project now established;
* Initial Project Plan developed to establish and implement a mining operation at Imweru Central
and East with an initial Life of Mine over 7-10 years;
* Exploration Plan devised to expand the Imweru Mineral Resource and thus extend the Life of
Mine by a further indicative 6 year period;
* Project is financially feasible based on two options investigated, namely owner operated and
contractor operated;
* Estimated cash flow generation from initial operations sufficient to enable the Company to
self-fund wider resource expansion and development of the Imweru Project, and contribute
towards development costs of other Company assets in the Lake Victoria Goldfields
region; and
* Various discussions underway with regard to forward project development and/or disposal
opportunities.
Louis Coetzee, CEO of Kibo Mining, commenting on the PEA report findings said: "We set out to
properly assess the economic potential of the Imweru Gold Project, to provide the data necessary
for Kibo to consider taking this asset into early production, primarily as a self-funding mechanism
that will allow us to internally fund the future development of the estimated substantial economic
potential of the Company's Imweru and Lubando projects in particular.
Receipt of this report not only puts us in the position to take the decision to proceed with an
accelerated development of the Imweru project, but also provides crucial base data that is needed
when conducting discussions with third parties, in respect of this project opportunity.
The progress being made with Imweru is being achieved in parallel to our work at the Company's
flagship Rukwa Coal to Power project where we anticipate receipt shortly of the integrated Coal -
Power interim pre-feasibility study which is another highly important step in the demonstration of
the technical and economic value of that project. We intend updating the market shortly in respect
of this report and the important issue of development partner selection."
Imweru Gold Project Definitive Mining Feasibility Study - Stage 1, Phase 1, Concept Study
- PEA Report Extracts
Strategy for the development of the Imweru Resource
Kibo's strategy dictates that it advances its exploration assets to a level commensurate with
entrance to the project development phase, after which a commercial decision will be taken to
either joint venture, divest or self-develop the asset.
In the case of the high priority Lake Victoria gold properties, Kibo opted to investigate the earliest
opportunity at which the Imweru Resource can be put into production, with the primary objective
being to generate a sufficient and sustainable revenue stream from which further development and
expansion of the greater Imweru Resource and adjacent exploration targets can be self-funded.
This investigation comprises the following:
*Completion of a Preliminary Economic Assessment ("PEA"), to establish a workable
base case. The PEA has been completed with positive outcome noted.
*Completion of a Definitive Feasibility Study to:
Plan and budget for the implementation of a low cost mining operation
Plan and budget for required exploration work required to successfully and satisfactorily
expand the current Imweru Resource by a target of between 40% and 80%.
Plan and budget for the required metallurgical test work to confirm extraction efficiencies
and operating costs.
Apply for and acquire all the required permitting and certification.
*Execute a project plan to establish and implement a mining operation at Imweru Central
and East with an initial targeted 7 - 10 years Life of Mine ("LoM").
*Execute a concurrent exploration plan to expand the Imweru Resource within three years,
to extend the initial LoM by a further indicative 6 years, subject to findings and results
from active exploration activities in this regard.
Imweru Project Resources
The Mineral Resource estimates for the Imweru Project have been prepared by Tetra Tech EBA
(effective date 17 February 2014) to meet the standards and definitions set forth in the Australian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, published by the
Joint Ore Reserve Committee ("JORC"). A summary of Updated Resource Estimate for Imweru
Property, Effective Date: February 17, 2014 is provided in the Notes to Editors section at the end
of this announcement. This includes a total JORC compliant gold Mineral Resource of 550,000
ounces for the Imweru property, of which 103,000 ounces are within the Indicated category and
447,000 ounces are within the Inferred category.
Mining Option Selection
The mining method considered for the Imweru Gold Project is conventional open pit mining using
truck and excavator combinations. This mining method is based on the outcome of an option
analysis, as part of the concept study, during which various mining options were investigated.
These options include, but are not limited to, contractor mining and owner operated mining.
During this study, a suggested course of action regarding the sequence in which the two identified
mine pits will be exploited was also developed. Currently, the Eastern pit will be mined first as it
presents the highest grade. Capital allowance was only made for purchasing mining and/or
auxiliary fleet items where owner operated options were considered. For contractor mining
options, no capital was allowed as the fleet items will be supplied by the contractor.
Mining Process
The mining ore production target was based on the NPV optimisation results. Production consists
of 3 phases. Phase 1 would commence by targeting the Imweru East Laterite and Saprolite ore.
Phase 2 would involve the total depletion of the Imweru Central pits (including bedrock ore) and
the Phase 3 would involve moving back to the Imweru East pit to deplete the bedrock ore left in
the pit.
Processing
Initially a heap leach plant will treat oxide or free-dig material. Thereafter, the processing
infrastructure will be expanded and upgraded to a static leach plant to treat the bedrock or sulphide
material. An open circuit mill will ultimately be included, provided that the planned resource
expansion initiatives improve mine life expectancy and RoM forecasts, to improve gold liberation
from sulphides. Continuous test work will be conducted during the heap leaching phase to
establish possible benefits for implementation of static leach. Owing to the short life of mine
(approximately 8 years), this processing strategy is considered to ensure overall reduction in
capital and operating costs compared to a conventional CIL processing option. For the purpose of
this study, the static leach plant will be built in the second half of year 3 to start operation in year
4.
Model Discount Rate and Gold Price
A discount rate of 8.03% (in real terms) was calculated for the NPV discount factor. The full
intrinsic value of the operation was reported - no attributable value was calculated. Forecast data
are based on projections for the gold price and presented in calendar years. For the purpose of the
financial model a gold price of USD1,250/oz was kept constant throughout the LoM. After
comparing the forecast to the Energy and Metals Consensus Forecast, with an average gold price
forecast of USD1,258/oz. over the next three years and a current gold price at the time of the
report of USD1,238/oz., USD1,250/oz was considered to be an acceptable and appropriate
forecast.
Exploration and Resource Expansion Upside Potential Summary
A JORC Competent Persons Report dated 17 February 2014 as well as an internal study for the
Imweru property, was completed. Both these reports indicated that significant potential exists to
expand the existing resources along strike and along depth both at Imweru Central and Imweru
East. Tetra Tech EBA was of the opinion that potential exists both to expand known mineral
deposits and to advance new target areas. An indicative expansion potential of between 40% and
80% was envisaged by the documents referred to above.
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 initial findings 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 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 Nickel Project on which the latest technical report confirms
prospectivity for nickel, PGMs, gold and strategic metals including Lithium.
Kibo Mining also 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.
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 Classification Cut-off Specific Metric Short Tons Gold Contained Gold
Type (g/t) Gravity Tonnes (t) Grade
(g/t) 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
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)
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 MINERAL RESOURCE 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) 1.6 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) 1.6 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) 1.2 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
10 February 2015
Corporate and Designated Adviser
River Group
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