Wrap Text
Shareholder Operational Update: Second Quarter 2015
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")
01 July 2015
Shareholder Operational Update: Second Quarter 2015
Kibo Mining Plc ("Kibo" or the "Company") (AIM:KIBO; JSE AltX: KBO), the Tanzania focused
mineral exploration and development company, is pleased to announce an operational update to
outline the current status of company activities and the extent of progress made to build the value of
the Company's assets for shareholders.
QUARTER HIGHLIGHTS AND CEO COMMENTS
Kibo Mining has entered into a dynamic phase in its development with material progress being
made across the asset portfolio. Highlights of this development progress in the second quarter of
2015 include:
- Signing of the Joint Development Agreement ("JDA") between Kibo and SEPCOIII, enabling
the Mbeya Coal to Power Project ("MCPP") to be taken to the next level of development;
- MCPP (Mining): Definitive Mining Studies confirmed the extremely robust and feasible nature
of the Rukwa Coal Mine, with the Pre-feasibility Study one month from completion;
- The MCPP (Power) development, bolstered by the signed JDA, has progressed greatly in terms
of partner participation and advanced planning;
- The MCPP is fast approaching financial close, and significant time has been spent on negotiation
and planning in this regard;
- Work on the Imweru project pre-feasibility study has commenced;
- The Haneti project exploration objectives for 2015, after analysis of the latest high resolution
aerial geophysical data, were confirmed and the proposed drill programme is ready for
deployment. It is planned to implement the programme immediately after the imminent Rukwa
Geotechnical Drill Programme;
- The two joint venture programmes (Morogoro and Pinewood) have commenced with the
Morogoro exploration programme. A Morogoro soil sample batch that was in storage was
submitted for laboratory analysiss for which results are awaited. A review and update of the
current Pinewood Project technical reports is in progress for further field work.
- Operational expenses for the reporting period remained within approved budget with no over-
expenditure;
- Financings undertaken in the quarter provided a solid underlying cash position within the
company, covering operational expenditure for the medium term;
- Negotiations with third parties to participate in or acquire various assets held by the Company
continued. Successfully concluding such negotiations will bolster and/or protect the Company's
underlying cash position and further increase investor confidence in Company projects.
Louis Coetzee, C.E.O. of Kibo Mining commented:
"We are very pleased to report to shareholders the tremendous progress the Company has made on
shareholders' behalf during recent months despite the continuing turbulence in the natural
resources equity environment.
Kibo has made strong progress in 2015, bolstered by the financial support demonstrated by an
early conversion of warrants by Metal Tiger plc in January and thereafter by the additional funds
raised from secondary placings. This update is designed to assist shareholders' understanding of
the progress that is being made, the current position of Kibo and also the forward plans we intend
to execute to further build the value of the company.
It is worth mentioning that we are participating in a race to value creation and in this regard two
factors are prevalent.
* Firstly, that Tanzania as a country is eager to see the development of its natural resources
and is highly supportive of those companies investing properly in this regard. The
opportunities are immense and we are rapidly building the value of our in-country interests
to reflect this.
* Secondly, that the bearish natural resource climate is potentially nearing its conclusion and
a turnaround in fortunes is likely due. We are positioning Kibo in a manner that will draw
investor interest and capital as that recovery ensues. When the recovery starts in earnest,
there will be many companies vying for attention and we want investors keenly focussed on
Kibo right from the start.
In the case of Kibo we feel attention by investors is warranted. In the MCPP we have a world class
opportunity to develop a major strategic power generation asset in Tanzania. The Kibo programme
is however much more robust than the MCPP only, with interests in strategic precious, base metal
and energy projects, lending diversity and depth to our business model and enabling investors to
gain access to the substantial mineral resource opportunities of Tanzania.
Whilst share price pressures are frustrating, shareholders should note that Kibo is progressing at
some pace, and there will be news flow in the coming days, weeks and months that will further
demonstrate the progress being made."
KIBO MINING PLC COMPANY PROJECT OVERVIEW
Mbeya Coal to Power Project ("MCPP")
- The required technical work for the project development phase of the MCPP is nearing
completion:
- The mining PFS is currently 87% complete;
- The Power PFS was completed by end of FY 2014. All planning and preparation for the next
phases of the PFS is complete;
- The process to facilitate permitting, certification and licensing intensified during the reporting
period, with increased interaction and negotiations with TANESCO and the Ministry for
Energy and Minerals ("MEM"). In this regard, an extensive submission was made to the
MEM outlining the strategic gap between power demand, strategic planning objectives and
current installed capacity in the TANESCO Power System Master Plan;
- The Environmental Assessment scope of work and solicitation of contractors for this work
component is complete. The formal environmental assessment will take place in two phases,
namely Mining and Power;
Mining
The mining portion of the MCPP development remained on track and on schedule during the
reporting period. The following are the key highlights:
- Phase 2, Stage 1, Definitive Mining Feasibility Study, (Mining PFS) commenced during this
reporting period (RNS 1 April 2015);
- A successful site visit to the Rukwa Coal mine site by Mining Consultants Minxcon, who act as the
Qualified Persons ("QP") to the MCPP (Mining component), confirmed the conclusions and
assumptions published in the Phase 1, Stage 1, Definitive Mining Feasibility Study Report, and
approved commencement of Phase 2 of Stage 1;
- The trade-off studies performed as part of the PFS identified potential for significant operating
expenditure ("OPEX") reductions, thereby increasing project value and profitability potential. The
highlights of these studies included:
* A 12 hour daylight shift cycle will be followed
* Primary and Secondary Transport will be performed by vehicle;
* The total overburden and inter-burden is minable through free-digging by Hydraulic
Excavator. Blasting is therefore not required for waste stripping and will potentially
decrease OPEX significantly;
* The Surface Continuous Miner was proved to be a feasible mining method;
* Mine Infrastructure lay-out finalised;
- The PFS is still below budget, on schedule and on target for release by end of July 2015.
Power
- The planned continuation of the Definitive Power Feasibility Study ("Power DFS") was briefly
interrupted by the development period required to ensure that the JDA reaches unconditional status
by end of Q2. Substantial technical and developmental work was however done in the meantime
which included:
- Defining the full Scope of the Power Feasibility Study
- Defining roles and responsibilities for the Power Feasibility Scope of Work:
* Integrated Project Structure, of which a first appointment, a Project
Coordinator, was made.
* Owner's Team
* Owner's Engineer
* EPC Contractor
* Independent Quantity Surveyor
- Scope of the Feasibility Level Environmental Impact Study.
- Technical integration with the Mining Definitive Feasibility Study
- It is expected that the Power DFS will immediately resume full operational status upon
completion of the above process. The following main aspects will be covered during this
phase:
* Coal and ash analyses
* Site selection study
* Limestone resource study
* Power station basic design
* Prepare, evaluate and negotiate EPC technical specification
* Prepare, evaluate and negotiate O&M technical specification
* Feasibility study report sections
* Detailed Power Station Design
* Ash Disposal Study
* Water Management Study
* Geotechnical Investigations
* Grid Study
* Roads
* Permanent Staff Accommodation
Imweru
The continuation of the Imweru Definitive Feasibility study was approved and initial work is
underway and will be fully implemented once adequate funding has been secured.
Desktop work on the project is currently in process after completion of a successful site visit by
Minxcon, Kibo's independent consultants on the project.
Lake Victoria Programme - Excluding Imweru
This project remains under a Care and Maintenance programme. No operational work was
completed during the reporting period.
Morogoro Programmes
Due to the very low prospectivity of the Morogoro North Project it was discontinued and its license
package was surrendered to the Ministry for Energy and Minerals in its entirety.
The Morogoro South Project (now called the Morogoro Project) was included in a Joint Venture
with Metal Tiger PLC on January 19, 2015. An exploration programme was designed comprising
the following broad activities:
- Follow up detailed soil geochemistry over targets identified in Matombo region (Block A Strike
Extension) during the 2012 field programme
- Exploration pits and trenches in the Matombo area
- First pass exploration drilling in the Matombo area, Block A (Estimated 1,200m)
- Detailed geological mapping to continue in all areas
- Reconnaissance mapping the areas west of Morogoro
- Stream sediment sampling and rock chip sampling in the areas west of Morogoro
An additional, reduced operational programme was accepted and approved, comprising the
laboratory analysiss of an existing batch of samples in storage. In order to further define the
southern extension of "Block A" gold mineralization, a limited follow up sampling program and an
assessment and preliminary reconnaissance mapping exercise on PL6622/2010 and PL8299/2012
was also submitted for approval. The sample batch in storage was submitted for laboratory analyses
and results are awaited. No other operational activities were approved during the reporting period.
Haneti Programme
Based on the findings and recommendations from previous studies, including a geochemical
interpretation study completed in Q1 2015, a follow - up two-phase exploration programme was
developed and approved.
Approved Exploration Programme
Phase 1: Analysis and interpretation of newly acquired high resolution aerial geophysical data.
Phase 2: Upon completion of phase 1, and provided that the interpretation of the data supports the
planned objectives, the implementation of an exploration drill programme will follow.
Operational Results to Date:
Following positive results from a geochemical interpretation of the project, the Haneti exploration
programme was provisionally approved for the implementation of Phase 1, only. After acquisition
of the geophysical data, which is currently being analysed and integrated into the existing
geological database, the following preliminary results were obtained (as announced per RNS on 24
June 2015):
- High resolution magnetic and gravity data show the interpreted areal extent and geological structure
of the Ni-Cu-PGM prospective Haneti-Itiso Ultramafic Complex (HIUC) confirming its continuity
over 80 kilometers of strike length
- A number of other areas have been identified within the HIUC showing similar magnetic and
gravity signatures as the known ultramafic outcrops e.g. Mihanza and Mwaka Hills and which can
be confidently interpreted as new areas of sub-cropping ultramafic rocks and targets for follow up
exploration.
- The interpretation results resolves some of the internal geological structure of the HIUC showing it
to be comprised of a number of attenuated and folded ribbons of ultramafic rocks within the general
granite-gneiss country rock which will assist geological interpretation and help focus exploration on
areas of most potential.
- The interpretation has identified a new zone of ultramafic rocks over a strike length of
approximately 30 km similar to the HIUC which will be a new target zone for follow up
exploration.
Pinewood
No operational work was completed during the reporting period. However a review and update of
the historic technical reports prepared in respect of Pinewood and surrounding Uranium deposits is
being undertaken to further refine and define next exploration campaigns.
Contacts
Louis Coetzee
+27 (0) 83 2606126
Kibo Mining plc
Chief Executive Officer
Andreas Lianos
+27 (0) 83 4408365
River Group
Corporate 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 Thšle
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 (Òthe MCPPÓ) 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 Mbeya with initial findings to be released in the near term. On 20 April 2015,
Kibo signed a Joint Development Agreement for 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 550,000oz 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
01 July 2015
Designated and Corporate Advisor
River Group
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