Wrap Text
Shareholder Operational Update: Third 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")
05 November 2015
Shareholder Operational Update: Third 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 for the third quarter 2015 (the "Quarter").
HIGHLIGHTS FOR THE QUARTER AND CEO COMMENTS
Mbeya Coal to Power Project ("MCPP") :
*Joint Development Agreement ("JDA") between Kibo and SEPCOIII becomes
unconditional
*Completion of Mining Pre-feasibility Study on MCPP; project fundamentals surpassed
earlier Concept Study report
*Power component of the MCPP advanced in terms of partner participation and planning
for definitive feasibility study
*Significant progress in negotiation and planning with respect to Financial Close for the
MCPP, which is approaching completion
Haneti geophysical interpretation results indicate nickel sulphide prospective rocks are
significantly more extensive than previously thought; and identifies additional drill targets
Exploration work on the Company's two Joint Ventures with Metal Tiger PLC commenced
(Morogoro and Pinewood)
Highlights from interim results for the period ended 30 June 2014:
*Decrease in trade and other payables of 311%; and
*Placing funds of £526,000, locked down since March due to appointment of
Administrator to Company's former broker (Hume Capital), to be released to Kibo within
two months
Louis Coetzee, C.E.O. of Kibo Mining commented:
"2015 has been one of the most difficult periods in recent history for junior mining companies.
Kibo has however been able to not only weather the storm, but has consistently advanced all the
Company's projects. This quarterly update demonstrates that the Company increased its
momentum despite trying times.
The Company's cash flows have been carefully managed following Hume being placed under
administration. The delay in receiving the placing funds as a result of this had no impact on
Kibo's operations and all uncertainty with regard to receipt of the funds has since been removed.
The MCPP advanced significantly, and this is best reflected in the continued progress made
towards concluding critical commercial arrangements for the project to ensure optimal value
creation on the Company's flagship asset. These efforts were in turn strongly supported by the
ongoing feasibility work that is still continuing at pace. With the most important strategic elements
now in place for the MCCP, Kibo is now focussing its entire effort on achieving Financial Closure
for this world class project.
Both the Metal Tiger joint ventures are active and making good progress. The Morogoro Project
holds significant potential to host economically viable deposits and in the Pinewood Project Kibo
provides exposure to the potential for a resurgence of interest in the Uranium sector.
Significant breakthroughs were made at Haneti, with the interpretation and modelling of the data
that produced exciting results, showing the HIUC rocks occur over a far greater strike length than
previously thought. This work enabled the prospectivity of Haneti for nickel sulphide
mineralisation to be enhanced significantly, at minimum cost, and provides a more detailed
picture of the sub-surface extent and geological structure."
KIBO OPERATIONS AND PROJECTS - DETAILED UPDATE FOR QUARTER 3
Hume Update
Pursuant to the terms of a notice (the "Notice") to clients (including Kibo) dated 20th August 2015
on the procedures pertaining to the distribution of the Client Money Pool, the Joint Special
Administrators of Hume Capital notified Kibo that monies will be distributed by earliest on the
2nd October 2015 (the "Date of Proving"), but no later than within two months from the 2nd
October 2015.
As previously announced, Kibo understands that substantially all of the £526,000 (representing the
consideration for 10,520,000 shares which were to be issued to third party investors) which had
been paid into Hume Capital's client money account, will be released to Kibo, less a small
proportion representing costs of the administration.
Mbeya Coal to Power Project
JDA
Kibo announced on 21 July 2015 that all conditions precedent in the JDA recently signed between
the Company and SEPCO III, have subsequently been met in full and that the JDA now enjoys
unconditional status, marking another crucial progressive milestone in the development of the
MCPP. This will allow Kibo to conduct and complete the MCPP BFS at pace and to the highest
international standard.
Mining
The Mining Pre-Feasibility Study which comprises Phase 1 of the Mbeya Definitive Mining Feasibility
Study ("MDMFS") was completed during July 2015. The study delivered decisive results across
all technical and environmental parameters. Mining efficiency and effectiveness will be enhanced
with the mechanised continuous surface miner having proved to be a viable option and, the
suitability of the overburden to be stripped by free digging,. The use of the continuous surface
miner also indicates a significant positive environmental impact by eliminating washing of coal,
whilst free digging avoids the use of explosives and blasting. The fact that the project's mine
design avoids river diversion (as opposed to the earlier design assumption) is a further significant
positive environmental impact. The key technical conclusions from the PFS were:
*Selected mining method - modified terrace mining method, with overburden removal by
means of a free dig (truck and shovel) method, and coal seam and inter burden mining by
means of mechanised continuous surface mining method
*Limited processing in the form of destoning of product required
*River diversion as identified in the Concept Study proven unnecessary in Pre - Feasibility
Pit Optimization and Mine Design
*Four alternative mining options for the selected mining method identified, with the Project
financially feasible for all of the options investigated.
The Company and its advisers Minxcon Projects, after having completed a financial optimization
study subsequent to the latest MCPP mining feasibility results, and assessing the impact of
optimal gearing for the MCPP coal mine based on the surface miner contractor option, announced
on 12 October 2015 the following :
*All-in cost margin ranges from 47.9% to 48.1%. Applying the aforementioned all-in cost
margin, Kibo interprets that annual earnings before interest and tax ("EBIT") of between US$
23.5 million to US$ 23.6 million will be generated;
*Applying a real discount rate of 5.51%, the best estimated Net Present Value ("NPV") of
free cash flow to equity ranges between US$ 214 million and US$ 219 million;
*Equity IRR (leveraged) range between 131% and 146%, with a Project IRR of 54%;
*Cash return on capital invested ranging between 726% and 732%; and
*Project Payback Period before loan of 2.6 years.
Kibo announced on 15 October 2015, completion of Phase 1 of the Mbeya Definitive Mining
Feasibility Study (MDMFS). This phase, a geotechnical drilling programme, was a critical work
stream of the final Stage of the broader Mbeya Coal to Power Project, Mining Feasibility Study,
and included:
*820 meter diamond core drill programme to confirm slope angles of pit design
*Metallurgical sampling programme to verify specific coal properties, required for detail
design requirements of power station
*Additional data obtained from drill programme to enable restatement of Mbeya Coal
Resource during Phase 2 of MDMFS
*Samples from the drilling programme are currently being analysed in the appropriate
geotechnical and coal laboratories. Results of the laboratory analyses will be used as design
inputs in both the mine and power designs
Power
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")
The planned continuation of the Definitive Power Feasibility Study ("power DFS") was
briefly interrupted during the period required to ensure that the JDA reaches unconditional
status by end of Q2. Substantial planning and preparation regarding 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
*It is expected that the Power DFS will immediately resume full operational status upon
completion of the above process.
Imweru Project (Gold)
As the gold market continues to experience significant downward price pressure, the Company is
currently proceeding cautiously with its gold projects, pending improved market gold sentiment.
The Imweru DFS is being continued at a reduced pace.
Morogoro Project (Gold)
The Morogoro soil sample batch laboratory analysis was integrated into existing geological
reports. A revised exploration programme is under review by the joint venture partners. As
reported earlier, this exploration program, together with ongoing regional mineral potential
evaluation work is aimed to test the gold anomalies identified in the Ruvu Nappe area in 2012 and
includes an early stage exploration drilling programme. The sampling results re-confirmed Block
A as the first priority target of the exploration program. Going forward, the following activities are
planned:
*Follow up detailed soil geochemistry over targets identified in Matombo region (Block A
southern strike extension)
*Exploration pits and trenches in the Matombo area
*Ground magnetic survey over Matombo area, Block A and southern extension
*First pass exploration drilling in the Matombo area, Block A
*Detailed geological mapping to continue in all areas
*Recognisance mapping the areas west of Morogoro
*Stream sediment sampling and rock chip sampling in the areas west of Morogoro
The exploration programme schedule, upon approval of the programme by the joint venture
partners should run for approximately 7 months.
If the outcome of the above programme is satisfactory, the programme would be regarded as ready
and justified for a follow - up phase of Resource Delineation drilling.
Lake Victoria Project - (Excluding Imweru)
As the gold market continues to experience significant downward price pressure, the Company is
currently proceeding cautiously with its gold projects pending improved market gold sentiment.
Consequently work on the Company's early stage Lake Victoria projects was kept to the minimum
required for care and maintenance during the period.
Pinewood Project (Uranium)
Work on the Pinewood Joint Venture Project commenced during the Quarter. It comprised a
review and update of the historic technical reports prepared in respect of the Pinewood portfolio
and existing uranium deposits in the region to assist in designing and implementing the next field
exploration campaign.
Haneti Programme
Kibo has received the final report from an independent Airborne Geophysical Data Interpretation
carried out over its Haneti project in central Tanzania. The results from the preliminary findings
were announced on the Company's RNS dated 24 June 2015.
*The final report confirms the location, strike extent and internal structure of two newly
interpreted composite mafic-ultramafic zones extending significantly the previously known
"footprint" of the Haneti-Itiso Ultramafic Complex (HIUC);
*The newly outlined mafic-ultramafic zones, with strike lengths of approximately 30 km
(Southwest Zone) and 10-20 km (Northwest Zone) occur to the Southeast and the Northwest
of the central 80 km long (strike length) HIUC respectively and may represent folded
repetitions and fault off-set extensions of the HIUC;
*Modelling of the high magnetic anomaly over the Mihanza drill prospect shows that the
magnetic susceptibility increases with depth and the prospective rocks extend to 800 m which
indicates the potential for a significant volume of nickel prospective target rock at this location
alone;
*The data from the geophysical study will continue to be evaluated both in-house and by the
Company's consultants to assist with geological modelling, new ground acquisition
exploration targeting and exploration programme design.
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
LimitedNominated Adviser on AIM
Daniel Thšle
+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
05 November 2015
Designated and Corporate Advisor
River Group
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