Wrap Text
Results for Power Definitive Feasibility Study – Mbeya Coal to Power 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:IE00B97C0C31
("Kibo" or "the Company")
04 May 2016
Results for Power Definitive Feasibility Study - Mbeya Coal to Power Project
Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX: KBO), the Tanzania focussed
mineral exploration and development company is pleased to announce results from the Power
Definitive Feasibility Study ("PDFS") for the Mbeya Coal to Power Project ("MCPP"). This
announcement should be read in conjunction with previous RNS statements dated 18 and 30
December 2014 reporting on the completed Power Definitive Pre - Feasibility Study, as well as
the most recent announcement dated 29 April 2016.
Key Highlights
The PDFS report was prepared by Tractebel Engineering on behalf of the Company. Key findings
include:
*Primary base case recommended by the Power Pre-Feasibility Study ("Power-PFS"), i.e.
Circulating Fluidized Bed boiler technology, 300MW configured as 2 x 150MW units,
accepted as optimal selection for final design of the Mbeya Power Station;
*Pre-Feasibility Study annual production target of 1 840 GWh confirmed;
*Annual average coal consumption confirmed at 1 497 432 tonnes per year, utilising Run -
of Mine ("ROM") product from the co-located mine site and within mine design
parameters;
*Total estimated project cost confirmed well below cost estimate stated in Power-PFS;
*Minor technical concerns identified during Power-PFS were all eliminated during the
PDFS;
*Based on recently restated Mbeya coal resource, the PDFS includes provision for near-
term expansion of the power station to at least 600MW;
*Positive PDFS results will further improve the already strong financial feasibility figures
of the MCPP; and
*Receipt of final PDFS-report initiates final development phase of the MCPP financial
model, required for the integrated MCPP Bankable Feasibility Study
Louis Coetzee, CEO of Kibo Mining plc said "The PDFS is the cornerstone of the MCPP and the
positive results confirm the very robust fundamentals of the MCPP. The Mining and Power-Pre
Feasibility Studies provided us with early indications that the MCPP holds the promise of strong
technical, operational and financial fundamentals and the PDFS has confirmed this. We are
particularly keen to see to what extent the PDFS results will improve the financial fundamentals of
the project, once the integrated financial model has been updated with the PDFS and Mining
Definitive Feasibility Study results.
The completion of this study is also a critical milestone in the MCPP development process. With
the PDFS in place, the final development phase of the Integrated Bankable Feasibility Study will
commence and the parallel work streams in the MCPP feasibility programme can now be
completed. (See process diagram at: MCPP Timeline & Description)
The PDFS and parallel work streams referred to above represent the significant work we have
done, and continue to do, in de-risking the project and in improving confidence levels. As a key
value driver for Kibo, the PDFS is the strongest statement yet in this regard.
We look forward with confidence to Financial Close."
Background
The MCPP is an integrated coal to power project and to realize full value from it, Kibo
commissioned an established team that includes Tractebel Engineering ("Tractebel" or "TE") to
conduct the Power Definitive Feasibility Study related to the Power Component of the Mbeya
Coal to Power Project, i.e. a 2 x 150 MW coal-fired power plant. Kibo also appointed Minxcon
Projects ("Minxcon") as coal mining consultant, Shangoni Management Services ("Shangoni") as
environmental consultant for the Environmental and Social Impact Assessment, and Standard
Bank ("SB") as financial advisor for the Bankable Feasibility Study, including the financial
model. This team is working on building the complex project case to prove feasibility of the
MCPP.
The PDFS comprises the technical study of a 2 x 150 MW coal-fired power plant ("Plant" or "Power
Plant") as well as a grid impact study conducted by Tractebel. The primary fuel resource 1 for the
project is coal from the adjacent Mbeya Coal Mine. (RNS 11 April 2016)
The Power Plant is designed for a capacity of 300 MW gross consisting of two identical units of
150 MW gross. Each unit will consist of a boiler with associated combustion system and flue gas
treatment, a steam turbine generator, a water cooled condenser with a wet mechanical draft
cooling tower, and a step-up transformer.
The boiler will be designed utilizing circulating fluidized bed (CFB) technology, with in- furnace
limestone injection for the sulphur dioxide (SO2) emission control (i.e. desulphurization of flue
gas). A further advantage of this arrangement is that the favorable combustion characteristics of a
CFB boiler will achieve an optimally low emission of nitrogen oxides (NOx), ensuring
compliance with World Bank Standards. Dust particles will be captured in a back-end fabric filter.
The Plant will also comprise common facilities including a common flue gas stack, a raw water
treatment plant, a waste water treatment plant, a coal storage and handling system, an ash buffer
storage and handling system, a limestone storage and handling system, a liquid fuel storage (start-
up fuel), an auxiliary oil-fired boiler (if required), a black start diesel generator, a 220kV electrical
substation, a compressed air plant and a fire fighting system.
A dry ash disposal area will be installed in the vicinity of the Power Plant site, with an impervious
layer to prevent leachate from entering the ground water, and a settlement pond will be required to
treat rainwater runoff before release. Ash disposal into the mined out voids in the mine pit is also
considered jointly with the mining feasibility study as a practical alternative.
Non-process buildings including an administration building, workshop, warehouse and canteen
will be built at site. A living compound for operations and maintenance personnel, integrated with
mine personnel, will be built in the direct vicinity of the mine and power plant.
The generated power will be evacuated by the TANESCO grid through a dedicated 220kV
overhead line of about 90 km which is to be erected and connected to a new Mbeya substation to
be built by TANESCO.
The construction phase will last about 36-37 months from Notice to Proceed to provisional
acceptance of the first unit commissioned. Different options for the Plant Operation and
Maintenance ("O&M") have been envisaged. Performing the O&M through an O&M Agreement
to a third party is the preferred solution.
The Plant is expected to operate in base load. However, part load operation and operational
flexibility is required to comply with the grid requirements. The Plant is designed to operate
continuously under all site ambient conditions, burning all coals from the design range supplied by
the Mbeya Coal Mine.
As availability and reliability of the Plant and individual equipment is of major importance, plant
redundancy will be such that a failure of any single component (excluding main equipment of the
power block) will not cause the unit to trip. In this regard, a black start diesel generator is foreseen
to allow for the start-up of the Plant independently of power supply from the grid.
The primary water supply to the Power Plant will be from the coal mine dewatering
arrangement. This water will consist of groundwater and rainwater pumped out of the mining
area to treatment ponds, from where it will be supplied to the Power Station. The secondary
water supply will be from the abundant groundwater available in the area. Boreholes and
adequate pumping arrangements will be established for this purpose.
The Power Plant, as well as the "Balance of Plant", inclusive of the plant operation will be
designed to be compliant with World Bank and Tanzanian environmental, health and safety
standards.
The annual input and output quantities are given in Table 3-4 below.
Parameter Units 2x150 MW Plant
Net power generated GWh/y 1 839
Coal consumption t/y 1 497 432
Limestone consumption t/y 110 359
Water consumption t/y 4 273 207
Solid by-products (bottom and fly ash) t/y 679 306
Important Notes for Readers:
The information contained within this report is taken from the PDFS produced by Tractebel in
respect of the MCPP. Recognising the level of commercial sensitivity and for the protection of all
stakeholders' interests we have limited the technical and financial information that we publish in
this report and in the wider public domain at this time.
Readers must note that operational and financial data pertaining to any complex development
project of this nature is project specific. Kibo has undertaken the MCPP PDFS to properly and
professionally understand the technical and financial merits of the project. The findings outlined
can only be used in an assessment and analysis of the MCPP to which this work relates and not
necessarily as a generic benchmark standard.
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 Thole / 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 Mbeya Coal to Power
Project ("MCPP"), 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
Johannesburg
04 May 2016
Corporate and Designated Adviser
River Group
1 Independently stated as Ni 43 - 101 compliant resource of approximately 121 Mt
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