Wrap Text
Updated MCPP MOU to fast-track development and implementation of Power Purchase Agreement
Kibo Mining Plc (Incorporated in Ireland)
(Registration Number: 451931)
(External registration number: 011/007371/10)
Share code on the JSE Limited: KBO
Share code on the AIM: KIBO
ISIN: IE00B97C0C31
("Kibo" or "the Company")
Dated: 16 November 2017
UPDATED MCPP MOU TO FAST-TRACK DEVELOPMENT AND IMPLEMENTATION
OF POWER PURCHASE AGREEMENT
Kibo Mining Plc (AIM: KIBO; AltX: KBO), the multi-asset resource, development and energy
company focused on Tanzania, is pleased to announce that, following consultation with the Tanzanian
Ministry of Energy and the Tanzania Electric Supply Company ('TANESCO'), is was agreed to
update the existing Memorandum of Understanding ('MOU') re a Power Purchase Agreement
('PPA') for the development and implementation of the Mbeya Coal to Power Project ('MCPP'), to
provide for a more streamlined process with materially shorter time lines for PPA finalisation.
The Company has been in very constructive engagement with the Tanzanian Government and
TANESCO over the past two months (see recent RNS') to conclude the updated MOU that will
govern the process to agree and implement the PPA. All stakeholders have recognised that the
development and implementation of a PPA for the MCPP must be expedited quickly given the
significant delays over the past year, as well as the strategic importance of the MCPP. As a result, all
parties have agreed to replace the original MOU and update it to streamline the process for conclusion
of the PPA. This updated MOU has subsequently been approved and confirmed in writing by the
board of TANESCO, and authorized for immediate implementation.
Accordingly, the approved updated MOU has now been submitted to all other concerned parties, i.e.
Ministry of Energy and the Attorney General, for endorsement before final signing by Kibo and
TANESCO. This remaining administrative process is already underway, and the Kibo Board believes
it will be completed imminently. Kibo anticipates providing further information on the material
details of the updated MOU and the expedited time lines therein once the updated MOU has been
fully executed.
Kibo Mining Plc CEO, Louis Coetzee, said, "This agreement underlines the recognition by all
stakeholders that the MCPP project is of national importance and that there was a need to define a
faster process to reach formal agreement on a PPA via the MOU. Both the Ministry of Energy and
TANESCO recognise the importance of reaching a final PPA for the MCPP as soon as practically
possible and that the delays in the finalisation of the MOU and subsequent PPA had to be addressed
by a reassessment of the conditions precedent to ensure that the PPA is expedited and crystalized for
the benefit of all stakeholders. In the confirmation letter received, TANESCO emphasised the strategic
importance of the MCPP, as well as their support and full commitment to ensure that the expedited
timelines in the updated MOU, along which the PPA is to be agreed and finalised, are indeed met.
We continue to work with all parties, including SEPCO III and GE to execute the milestones
associated with MCPP and I would like to thank all our shareholders and stakeholders for their
support and look forward to updating them on further developments as we progress and build value
for them and Tanzania.".
**ENDS**
For further information please visit www.kibomining.com or contact:
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
Andrew Thomson
+61 8 9480 2500
RFC Ambrian Limited
NOMAD on AIM
Hugo de Salis / Priit Piip
+44 (0) 207 236 1177
St Brides Partners Ltd
Investor and Media Relations Adviser
Notes to editors:
Kibo Mining is a multi-asset resource development and energy company focused on South West
Tanzania, listed on London's AIM market and the AltX in Johannesburg. The Company's flagship
asset is the Mbeya Coal to Power Project ('MCPP'), which comprises the development of the Mbeya
Coal Mine, a 1.5Mt p/a mining operation and the Mbeya Power Plant, a 300 MW mine-mouth thermal
power station.
The Mbeya Coal Mine has a defined 120.8 Mt NI 43 101 thermal coal resource. A Definitive
Feasibility Study has been conducted on the project which underpins its value with an indicated IRR
of 69.2%. The 300 MW mouth-of-mine thermal power station has long term scalability to 1000MW,
with a full Power Feasibility Study that has been published highlighting an annual power output target
of 1,8 GW based on annual average coal consumption of 1.5 Mt. An Integrated Bankable Feasibility
Study report for the entire project indicated total potential revenues of US$ 7.5-8.5 billion over an
initial 25-year mine life, post tax equity IRR between 21-22%, debt pay-back period of 11-12 years
and a construction period of 36 months.
To assist in the execution this critical power project of the MCPP, Kibo has assembled a team of
international team of advisors and partners including Engineering Procurement and Construction
('EPC') contractors and financial teams that are assisting in the development of. These include
ABSA/Barclays as Financial Advisor, China based EPC contractor SEPCO III, General Electric,
Tractebel Engineering (Power), Minxcon Consulting (Mining) and legal advisors Norton Rose
Fulbright.
Kibo also holds the Haneti Project on which the latest technical report confirms prospectivity for
nickel, PGMs, gold and strategic metals including lithium and Rare Earth Elements.
Kibo Mining's projects are located in central Tanzania and in 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. Kibo Mining recognises the
potential to enhance the quality of life and opportunity for Tanzanian citizens through careful
development of its projects.
This announcement contains inside information as stipulated under the Market Abuse Regulations
(EU) no. 596/2014 ("MAR").
Johannesburg
16 November 2017
Corporate and Designated Advisor
River Group
Date: 16/11/2017 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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