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KIBO MINING PLC - Mbeya Coal to Power Project Completes Definitive Mining Feasibility Study

Release Date: 08/07/2016 08:05
Code(s): KBO     PDF:  
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Mbeya Coal to Power Project Completes Definitive Mining Feasibility Study

 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”)

08/07/2016

Mbeya Coal to Power Project Completes Definitive Mining Feasibility Study

Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX: KBO), the Tanzania focussed 
mineral exploration and development company, is pleased to announce the completion of the 
Mining Definitive Feasibility Study (“MDFS”) of the Mbeya Coal to Power Project (“MCPP”).

The MDFS comprised the optimization of the mine design, a detailed mine design based on 
the results from the restated Mbeya Coal Resource (RNS dated 11 April 2016) and the final 
coal requirement for the Mbeya Power Station as stated in the Power Definitive Feasibility 
Study (“PDFS”) (RNS dated 4 May 2016). Results from the MDFS correlate accurately with 
those of the Mining Pre-Feasibility Study (“MPFS”) (RNS dated 12 August 2015) and have 
reconfirmed the Mbeya Coal Mine as a robust project with strong financial and commercial 
indicators. 


Key results from the MDFS are the following: 

 - IRR 69.2% (15% improvement from 53.9% stated in the MPFS);

 - Payback period 2.4 years (7% improvement from 2.6 years stated in the MPFS);

 - Peak funding requirement USD 17 Million (reduced by 54% from that identified in MPFS);

 - Power station coal requirement over the life of the plant was reduced by 23% from that 
   identified in the MPFS, bringing about significant environmental and cost benefits. 
   NOTE: The mining method developed for the Mbeya coal mine ensures that all coal seams 
   can be mined with great accuracy, which guarantees that coal is delivered to the power 
   plant at a reliable and consistent calorific value (“CV”). The reliability in receiving 
   coal at a consistent CV was critical for the power plant design to ensure optimal fuel 
   efficiencies. The MDFS mining method made it possible to design a power station that 
   required significantly less coal for the same output i.e. 1 840 GWh per annum. Although 
   this will result in a linear reduction of revenue for the coal mine, this is more than 
   recovered in cost savings for the power plant which is most sensitive to fuel costs. 
   The most important gain from the efficiencies and effectiveness of the mining method is 
   however in the notably reduced overall environmental impact of both the mine and the 
   power station;

 - Mining method selected during MPFS confirmed as most accurate and cost-effective mining 
   method for the Mbeya Coal Mine. NOTE: The mining method developed for the Mbeya coal 
   mine confirmed that mining will be conducted by modified terrace mining, with over burden 
   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.

 - All in cost margin 39% (reduced from 49% in the MPFS due to greater accuracy in modelling 
   key cost drivers).


Louis Coetzee, CEO of Kibo Mining, said: “We are delighted with the results of the MDFS, 
which have confirmed, and in various areas improved on the positive Pre – Feasibility Study 
results. Figures from the MDFS report confirm that the Mbeya Coal Mine (as the mining 
component of the MCPP) is a robust project in every aspect. Project fundamentals are 
significantly better than originally at the end of the Concept Study in 2014. 

We are particularly pleased with the improved IRR of 69.2% and the significantly improved 
environmental impact. The significance of the mining method that was developed for the Mbeya 
coal mine cannot be underestimated. This method not only eliminated one of the two biggest 
environmental risks for the MCPP, i.e. eliminating the need to wash the coal, but also 
reduced the coal requirement by 23%, which means substantial cost savings for both the mine 
and the power plant. It will also result in a corresponding reduction in emissions. 
Considering that these two elements are fundamental to the fundability of the MCPP, we could 
not have hoped for better results from the MDFS.

The total coal requirement of the Mbeya power plant over the life of plant is stated as a 
probable reserve in the MDFS, meaning that the power plant can rely on an upfront guaranteed 
fuel supply for its entire life span. 

The two key work streams required for the completion of the MCPP Integrated Bankable 
Feasibility Study (“IBFS”) are now complete and we are now focussed on completion of the 
final work on the IBFS”.


Important Notes for Readers:

The information contained within this announcement is taken from the DMFS report produced by 
Minxcon Projects in respect of the MMCPP. Recognising the level of commercial sensitivity and 
for the protection of all stakeholders’ interests the technical information contained in the 
DMFS report which has been provided in this announcement and in the wider public domain has 
been limited at this time.

Readers should note that operational and financial data pertaining to any complex development 
project of this nature is project specific. Kibo has undertaken the MCPP DMFS to properly and 
professionally understand the technical and financial merits of the project and the results 
reported above remain the subject of ongoing review and verification and any material changes 
will be reported to the market should any occur. The findings outlined can only be used in an 
assessment and analysis of the MCPP to which this work relates and not 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 Thöle / 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


Table 1: Restated Mbeya Resource Statement (dated 31 March 2016)


SEAM     SEAM     NI43-101     IN SITU          %          IN SITU         RAW QUALITIES  (AIR DRIED)
       THIKNESS    CLASS       Megatons     GEOLOGICAL     Megatons       RD    ASH   IM     VM    CV   TS
                              No discount    DISCOUNT    with discount   gm/cc   %     %     %     %    %

S4                Measured        0            -5%            0
S3U     2,25      Measured      3,186          -5%          3,027        1,65   43,7  5,3   23,1  14,6  1,96
S3L     2,58      Measured      3,722          -5%          3,536        1,58   36,6  6,2   25,2  16,9  1,45
S2      3,89      Measured      6,279          -5%          5,965        1,56   34,7  6,5   24,5  17,3  1,31
S1U     2,61      Measured      4,180          -5%          3,971        1,67   38,4  5,7   23,1  16,1  1,00
S1L     2,92      Measured      4,159          -5%          3,951        1,56   33,7  6,0   23,6  17,8  0,86
S0      1,39      Measured      0,477          -5%          0,453        1,59   37,7  6,2   22,5  16,0  0,42

Measured                        22,004         -5%          20,904       1,60   36,91 6,02  23,92 16,68 1,26

S4      1,04      Indicated     3,49           -10%         3,14         1,74   48,6  5,2   22,1  12,8  1,36
S3U     2,09      Indicated     12,17          -10%         10,95        1,67   45,5  5,3   22,2  14,2  1,55
S3L     2,00      Indicated     13,08          -10%         11,77        1,64   41,3  5,1   24,0  15,6  1,97
S2      3,41      Indicated     25,64          -10%         23,08        1,58   36,9  5,8   24,4  16,8  1,10
S1U     2,26      Indicated     18,16          -10%         16,34        1,72   44,3  5,0   22,0  14,2  1,02
S1L     2,74      Indicated     21,29          -10%         19,16        1,67   38,1  5,2   22,6  16,4  0,66
S0      1,31      Indicated     4,61           -10%         4,15         1,66   41,4  5,5   21,4  15,2  0,69

Indicated                       98,446         -10%         88,601       1,65   40,79 5,31  23,01 15,52 1,15

S4      0,82      Inferred      0,4            -15%         0,3          1,87   56,9  5,1   18,9  9,6   0,99
S3U     2,48      Inferred      2,3            -15%         2,0          1,69   46,9  5,1   21,5  13,5  1,49
S3L     1,79      Inferred      1,8            -15%         1,5          1,75   47,6  5,2   21,7  13,2  2,43
S2      3,00      Inferred      2,2            -15%         1,9          1,54   33,7  6,4   24,6  17,7  1,32
S1U     2,26      Inferred      2,8            -15%         2,4          1,74   42,3  5,8   21,9  14,2  1,01
S1L     2,93      Inferred      3,6            -15%         3,1          1,68   35,6  5,5   23,2  17,0  0,85
S0      1,13      Inferred      0,1            -15%         0,1          1,67   44,3  5,4   20,5  13,9  0,50

Inferred                        13,280         -15%         11,288       1,69   40,99 5,58  22,51 15,17 1,29

GRAND TOTAL                     133,729                     120,793      1,65   40,17 5,45  23,11 15,68 1,18

Review by Qualified Persons

The information in this announcement that relates to the Mbeya Coal Mineral Resource is taken from 
a report 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 and for the purposes of the AIM Rules for Companies.

The Company’s Exploration Director, Noel O’Keeffe has reviewed the resource report and the references 
to them in this announcement.


Johannesburg
08 July 2016
Corporate and Designated Adviser
River Group





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