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KIBO MINING PLC - Kibo Signs MOU with Lake Victoria Gold LTD to Fast Track Development of the Imweru Gold Project

Release Date: 02/06/2016 08:00
Code(s): KBO     PDF:  
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Kibo Signs MOU with Lake Victoria Gold LTD to Fast Track Development of the 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:IE00B97C0C31
  (“Kibo” or “the Company”)

02 June 2016

 Kibo Signs MOU with Lake Victoria Gold LTD to Fast Track Development of the Imweru
                                    Gold Project

Kibo Mining plc (“Kibo” or the “Company”) (AIM: KIBO; AltX: KBO), the Tanzania focused
mineral exploration and development Company is pleased to announce that it has signed a
Memorandum of Understanding (“MOU”) with Lake Victoria Gold LTD (“Lake Victoria”) to
consolidate the companies’ respective Imweru and Imwelo gold projects.


Highlights


   •   Kibo and Lake Victoria Gold LTD (“LVG”) agree MOU to amalgamate Kibo’s Imweru
       Gold Project and LVG’s directly adjacent Imwelo project into a new company
       (“NEWCO);


   •   Board of NEWCO to comprise mix of Kibo and Lake Victoria management which will
       combine significant experience across exploration and mine development;


   •   Total combined JORC compliant stated resources of approximately 755,300 ounces;

   •   Based on upside potential identified in existing Imweru CPR, the combined project will
       provide NEWCO with the potential to achieve >1 million oz. resource in relative short
       time frame;

   •   Production target of 50,000 oz. of gold per annum within 12 to 18 months of forming
       NEWCO, targeting 100,0000 oz. per annum within 24 to 30 months;

   •   Existing LVG mining right will also cover Kibo Imweru project after amalgamation under
       existing provisions of Tanzanian Mining Act for continuous mineral deposits;

Louis Coetzee, CEO of the Company, commented today: “The past two years’ steady work on the
Imweru DFS advanced the Imweru project to a level where we could come to an arrangement with
Lake Victoria Gold, which will see the amalgamation of the respective projects on a like for like
basis, to create a project with critical mass and a clear path to near-term production.
Amalgamation of the two projects will establish a project with a significant gold resource with the
added strategic advantage of an existing mining right and the opportunity to pursue near-term
production. At a resource level we believe that the combined project can reach more than a 1
million oz. resource. This view is based on the resource expansion potential identified in the latest
Imweru competent persons report. According to this report the Imweru resource can be increased
with a further 40% to 80% through an already defined 3rd phase exploration programme. From a
production perspective the combination of the two projects also provides the potential to achieve a
100,000 oz, per annum production target.

I am particularly excited about the gold mine development and production expertise that LVG will
bring to the enlarged project, which will complement Kibo’s exploration experience.

We believe that the proposed transaction can unlock significant value for Kibo shareholders and
we will be updating shareholders on an ongoing basis as we progress with the implementation and
execution of the Kibo / LVG MOU.”

Summary Details

Kibo and Lake Victoria Gold Ltd (together the “Sponsors”) have today signed an MOU
establishing the terms and conditions under which it intends to amalgamate its Imweru and Imwelo
gold projects by vending both projects into a new company “NEWCO”. The objective for the
amalgamation is to fast-track the development of a gold mine on the project based on the combined
existing stated resource base of approximately 755,000 oz gold. The initial board of NEWCO will
consist of the following members: Louis Coetzee (Kibo/ Executive Chairman) Seth Dickinson
(Lake Victoria/Chief Executive Officer; Bjorn Zikarsky (Lake Victoria/ Financial Director); Noel
O’ Keeffe (Kibo); and Louis Scheepers (Kibo). It is the intention of the Sponsors that the MOU
will be followed by a definitive agreement by no later than 30 June 2016.

Background Imweru and Imwelo Projects

Kibo’s Imweru Gold Project and Lake Victoria’s Imwelo Gold Project are located in the gold
prolific Lake Victoria Goldfield of northern Tanzania, approximately 35 km west of AngloGold
Ashanti’s world class Geita Mine (estimated pre-mining gold endowment of 23 Moz at 4g/t) and
within a similar geological setting, prospective for Archaean age “greenstone” hosted gold
mineralisation.

Since acquiring the Imweru project in 2013, Kibo carried out additional resource drilling in late
2013 leading to the publication of a new Mineral Resource statement of 16,485,000 tonnes at
1.143 g/t (550,000 oz) in February 2104. Following positive results from economic modelling,
both in-house and by its consultants, Kibo announced the commencement of a Definitive
Feasibility Study (“DFS”) on the project in October 2014. Since then it has completed a
Preliminary Economic Assessment (Refer RNS dated 9 Feb 2015) and commenced a Pre-
Feasibility Study (Refer RNS dated 8 April 2015) which together will comprise the first stage of
the DFS. The positive results from these studies to date have established the potential economic
viability of Imweru to sustain a mine development over 7-10 years, potential to expand the current
Mineral Resource and hence the Life of Mine for another 6 years and the potential for the
discovery of additional satellite resources within the greater Imweru project block.

Lake Victoria Gold’s Imwelo gold project is located along strike and contiguous with Kibo’s
Imweru project. Imwelo effectively forms an extension of Kibo’s Imweru East Mineralised Zone
(Refer RNS of 24 February 2014) and has a published JORC Mineral Resource of 205,200 oz. at a
grade of 2.3 g/t of which 90,800 oz. is in the Measured and Indicated Categories. Lake Victoria
were granted a Mining Licence over the project licence in January 2015 which should enable mine
development to progress rapidly. Taken together, Kibo’s Imweru and Lake Victoria’s Imwelo
mineral resource represent an amalgamated resource of approximately 755,200 oz at a grade of 1.5
g/t.

The proposed amalgamation of the two projects will provide significant synergistic benefits for the
development of a gold mine both in regard to the enlarged resource and exploration potential of
the combined projects and the particular competencies of Kibo and Lake Victoria in exploration
and mine development respectively. The enlarged project is also expected to present an attractive
investment opportunity in a period of renewed interest in the gold sector. Given the current
development status of the respective projects, it is the intention of the project sponsors to have the
project in production, with a production target of 100,000 ounces per annum, within 24 to 30
months from the date of formal amalgamation.

Maps showing the location of the Imweru and Imwelo projects can be found on the Kibo website
www.kibomining.com under the Projects/Lake Victoria (gold) menu on the home page.
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        Broker
                                                                             Limited         
                                                                        
     Oliver Morse          +61 8 9480 2500           RFC Ambrian                    Nominated Adviser on AIM
                                                                            Limited
     
     Daniel Thöle /        +44 (0) 203 772 2500    Bell Potting                    Investor and Media Relations
     Anna Legge                       
                                                

 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 Rukwa Coal to Power
 Project (“RCPP”), 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


   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 Type     Classification     Cut- off    Specific Gravity  Metric Tonnes   Short Tons   Gold Grade   Contained Gold Ounces
                                                                    (g/t)                                           (t)                                         (g/t)             (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

Central
                  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           Indicated              0.4             2.77                     2,732,000           3,012,000        1.168        103,000
Total                              Inferred                 0.4             2.79                   12,222,000         13,473,000        1.137       447,000
                                      Combined             0.4             2.79                   14,954,000         16,485,000        1.143       550,000
                                       (inf+ind)
                      
   *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)



Review by Qualified Persons

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 appear.


Johannesburg
02 June 2016
Corporate and Designated Adviser
River Group
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