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KIBO MINING PLC - Kibo Announces Completion of Integrated Bankable Feasibility Study

Release Date: 23/01/2017 09:00
Code(s): KBO     PDF:  
Wrap Text
Kibo Announces Completion of Integrated Bankable 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")


January 23, 2017


Kibo Announces Completion of Integrated Bankable Feasibility Study 


Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX: KBO), the Tanzania focused 
mineral exploration and development Company, is pleased to announce finalization of the Integrated 
Bankable Feasibility Study ("IBFS") with the delivery of the Integrated Financial Model for the Mbeya 
Coal to Power Project ("MCPP"). 

The IBFS comprises an integration of the Definitive Mining Feasibility Study ("DMFS"), the 
Definitive Power Feasibility Study ("DPFS"), the Integrated Financial Model for the MCPP and all 
other relevant technical studies on the MCPP done to date, inclusive of the financial outcomes from the 
power EPC agreement. 

The IBFS concluded that the MCPP is financially, technically and operationally a very robust project.

Key highlights from the IBFS are set out below:  

*Total capital requirement for the integrated project reduced 21.1 % from the original integrated 
prefeasibility study ("IPFS") figure;
*Indicative MCPP total revenue over an assumed 25-year life of project (Note: the final life of 
project will be fixed by the final Power Purchase Agreement ("PPA")) of approximately US$7.5 to 
US$8.5 billion;
*Indicative post tax Equity IRR between 21% and 22%, an increase of 11% on the indicative IPFS 
post-tax Equity IRR, based on the following conservative debt assumptions:

- Debt tenor: 12 years;
- All in interest rate (post construction): 10%; and
- DSRA facility: 6 months
*Post tax Project IRR ranging between 14.7% and 16%;

*Indicative post-tax payback: 
- Equity Payback period: 4 to 5 years
- Debt Payback Period: 11 to 12 years

*Sufficient additional coal resources available from the Mbeya Coal Mine to expand the power 
station to more than double the current design size and plant life. In this regard, the plant design 
already makes provision for a future second stage expansion to 600MW (i.e. a further 300MW of 
capacity with the potential for a third stage expansion of a further 400MW in the long term).
Technical and environmental risk assessment confirmed construction-ready state of the project, 
with no 'red flags' on the environmental side, bearing in mind the clean coal nature of the plant 
design.

*The MCPP can be constructed and commissioned within the previously projected schedule 
duration of 36 months. 
The following comprise key highlights from the MCPP definitive feasibility studies (as reported 
previously):

Mining
- 122Mt Coal Resource of which 85.9% of stated resource qualifies for inclusion in any 
future reserve statement. Of this, 39Mt is included in the Pit Design, and is sufficient to 
satisfy the required indicative coal requirement of 39Mt for 30 years. The Mbeya Coal 
product exceeds standard technical requirements of the power plant.

- Application of the Mbeya Coal Ltd Special Mining License submitted to the Ministry of 
Energy and Minerals is aimed at securing 70Km2 of Mining Area 

- Financial Viability of the Mbeya Coal Resource demonstrated
* IRR of 69.2%  
* Payback period 2.4 years
* Peak funding requirement of USD17 million 
* All-in cost margin of 39% - (all-in cost margins of above 25% are considered healthy 
by Kibo)
* Power Station coal requirements reduced by 23% from that identified in MPFS 
bringing significant environmental and cost benefits

- Modified Terrace Mining (free dig truck & shovel overburden, continuous miner coal) 
confirmed as the most accurate and cost effective for the coal mine, and key to optimized 
mining and power financials

- Power  
* Required calorific value: 12.85 GJ/t.
* Net power generated: 1,840 GWh/a
* Coal Consumption: 1,497,432 tpa (As Fired) 
* Limestone Consumption: 110,359 tpa
* Water Consumption: 4,273,207 lpa
* Solid Waste Incl Ash: 679,306 tpa 

Notes to Readers.

Readers are referred to Kibo RNS dated 10 March 2015 as well as related announcements on the 
DMFS and DPFS released to date and also to related supporting data / information published on 
Kibo's website www.kibomining.com  

The Company remains restricted in its ability to release certain detailed information relating to the 
IBFS due to the fact that the Company is engaged in highly confidential discussions with various 
parties, including regulatory authorities. The release of certain detailed financial information could 
result in a breach of Kibo's confidentiality obligations, and is commercially sensitive. This could 
harm the Company's ability to successfully complete negotiations. 

The financial information provided in this announcement is a limited extract from the MCPP IBFS 
that has been conducted to determine the bankability of the MCPP. These figures however remain 
subject to further evaluation and testing during PPA and funding / investment negotiations which 
are currently underway. As a consequence, there is likely to be further changes to the figures as the 
various business streams progress and conclude. 


Louis Coetzee, CEO of Kibo Mining, said: "We are extremely pleased with the positive results 
from the IBFS. The IBFS comprises the DMFS, DPFS and Integrated Financial Model, and as 
can be seen, the results are materially different from those received previously. The significant 
improvement in the various IRR figures exceeds management expectations and will without doubt 
attract favorable attention from potential investors. 

The IBFS results shows the MCPP to be equally strong and robust in respect of the fundamental 
requirements of all the various stakeholder interests in the MCPP. This puts the Company in a 
strong position in its ongoing discussions / negotiations with regard to the final PPA as well as 
with potential funders / investors in the MCPP.

With independent confirmation on the bankability of the MCPP, the Company expects to see a 
significant increase in interest and support from potential investors and other stakeholders in the 
MCPP."


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

Liz Morley / 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 Rukwa Coal to Power Project 
("RCPP"), with an established management team that includes ABSA / Barclays 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 25 August 2016, Kibo signed an Agreement with 
China based EPC contractor SEPCO III granting it the right to become the sole bidder for the EPC 
contract to build the power plant component of the MCPP in exchange for SEPCO III refunding 
50% of the development costs incurred by Kibo to date on the project. Kibo has already received 
the first tranche of this funding in the amount of US$1.8 million on the 5th September 2016

The Company also has extensive gold focused interests including Lake Victoria Goldfields and 
Morogoro projects. At Lake Victoria, the Company has 100% owned projects with a 550,000 oz. 
JORC compliant gold Mineral Resource at the Imweru Project and a 168,000 oz. NI 43-101 
compliant gold Mineral Resource at the Lubando Project. 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
23 January 2017
Corporate and Designated Adviser
River Group

GWh/a: Gigawatt hours per annum; tpa: tons per annum; lpa: liter per annum.
 
 
 
 



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