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Kibo Mining Plc Completion of Botswanan Power Project Acquisition and Appointment of Direc
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’)
Dated: 03 April 2018
Kibo Mining Plc (‘Kibo’ or the ‘Company’)
Completion of Botswanan Power Project Acquisition and Appointment of Director
Kibo Mining plc (AIM: KIBO; AltX: KBO), the multi-asset Africa-focused energy and resource company, is
pleased to announce that, further to the RNS dated 30 November 2017, it has completed the acquisition of
an 85% interest in the Mabesekwa Coal Independent Power Project (‘MCIPP’) (‘the Acquisition’). This project
located in Botswana complements Kibo’s Mbeya Coal to Power Project (‘MCPP’) in Tanzania and is in line
with the Company’s broader strategy to position itself as a strategic regional energy company focused on
tackling the acute power shortage, particularly in Southern Africa. As part of the terms of the Acquisition,
Mr. Mashale Phumaphi has joined the Company as a Non-Executive Director.
Overview
• All share deal with Sechaba Natural Resources Limited (‘Sechaba’) completed, which sees Kibo acquire
an 85% interest in a strategic integrated power project in Botswana
• Highly synergistic with flagship MCPP in Tanzania, providing considerable benefits: economies of scale
in equipment, execution, project finance and strategic partnerships
• Robust market dynamics given large energy deficit in Botswana
• Advanced project - Scoping Study highlights 30-year Life of Mine with a maximum capacity of 600MW
(4x150MW) based on a coal delivery rate of 3.2Mtpa
• Strong backing by institutional investors through Shumba Energy Limited’s (“Shumba”) investor base
• Significant additional benefits to the agreement include Kibo’s first right of refusal to participate in
any energy projects that Shumba may pursue over the next six-years
• Consistent with Kibo’s business model and provides further endorsement of the Company’s ability
to develop nationally important energy projects on a regional scale
• Appointment of Mr. Mashale Phumaphi as Non-Executive Director
Louis Coetzee, CEO of Kibo Mining said: “I am delighted to announce the completion of the acquisition of the
MCIPP, which both strengthens and diversifies our African energy portfolio in line with our stated strategy.
Ideally located in Botswana, which has one of the best credit ratings in sub-Saharan Africa, and like much of
Africa suffers from acute energy shortages, the MCIPP has notable similarities with our MCPP in Tanzania.
These synergies will enable us to capitalise on our institutional knowledge and contacts in the industry as we
pursue rapid development of both projects in tandem.
“I also welcome Mr. Phumaphi’s appointment to the Board; his extensive corporate finance and technical
experience will make him a valuable addition to our team. Finally, I would like to offer my sincere gratitude
for all the hard work done, in a short timeframe, by the teams at both Kibo and Sechaba and I look forward
to regularly updating shareholders on our progress as we look to advance both projects and build value for
all stakeholders.”
Acquisition
Under the terms of the agreement, Sechaba, a subsidiary of Shumba Energy Limited (BSE:SHUMBA)
(‘Shumba’), has today been issued 153,710,030 new ordinary shares in Kibo (‘Consideration Shares’) at an
issue price of GBP0.061, being the volume weighted average price at which the ordinary shares in Kibo have
traded on AIM for the 30 trading days immediately preceding the transaction completion date. The
Consideration Shares rank pari passu with the existing ordinary shares in the Company, representing 27.13%
of the enlarged share capital and consequently Sechaba will be a Substantial Shareholder of the Company.
Furthermore, Sechaba, which has retained a 15% interest in the MCIPP, will gain a seat on Kibo’s Board of
Directors, with Mr Mashale Phumaphi appointed as Sechaba’s nominated director.
In accordance with instructions from Sechaba, the Consideration Shares were issued as per the table below.
Name No of new Kibo Shares % holding in Kibo after share issue
Issued
Shumba Energy Ltd 138,339,027 24.42
Mashale Phumaphi 13,833,903 2.44
Thamang Thabolo 1,537,100 0.27
TOTAL 153,710,030 27.13
Application has been made for the Consideration Shares to be admitted to trading on AIM and the JSE AltX
markets. Trading in the Consideration Shares is expected to commence on AIM and the JSE on or around
Friday 6th April 2018 (‘Admission’). Following Admission, the Company will have 566,611,454 shares in issue
and this figure may be used by shareholders as the denominator for the calculations to determine if they are
required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure
Guidance and Transparency Rules.
As part of the transaction, Kibo has first right of refusal over any energy projects that Shumba may pursue
over the next six years. Additionally, Shumba will be granted first right of refusal on any coal export projects
that Kibo may pursue over the same period. Notably, the MCIPP enjoys strong institutional investment
support through Shumba’s shareholder base.
Furthermore, Sechaba will retain the benefit of the following modest royalties from MCIPP should it go into
production:
• USD 0.50 from revenue received per metric tonne of coal sold from the area covered by the MCIPP
coal resource; and
• US 0.225 cents from revenue received per kilowatt hour produced and sold by any power plant owned
by Kibo Energy Ltd (Botswana), the entity holding the MCIPP in Botswana or using coal procured from
the area covered by the MCIPP coal resource
Other material terms include:
• Kibo to use reasonable commercial endeavours on reasonable commercial terms and on an arm’s
length basis to free-carry Sechaba for the reasonable funding requirements of the MCIPP until
financial close of a project financing, after which Sechaba may be diluted
• For a period of one year after Completion, Sechaba is subject to lock up and orderly market
arrangements for any sale of Consideration Shares, with a maximum disposal of 5% in any calendar
month permitted
• Sechaba may distribute up to 50% of its Consideration Shares in specie to its shareholders (currently
another subsidiary of Shumba) on condition that the recipient(s) comply with the lock up and orderly
market arrangements or distribute the Consideration Shares in specie to Shumba, who must
immediately distribute the Consideration Shares in specie to its own shareholders
• Warranties, representations and undertakings typical of a transaction of this nature
Mabesekwa Coal Independent Power Project
The MCIPP is located c.40km east of the village of Tonata and c.50km southeast of Francistown, Botswana’s
second largest city. Kibo envisages it as a coal-based integrated mine-mouth power plant, with potential for
incorporation of a solar component as part of the further studies to be conducted by Kibo.
Mabesekwa consists of a 300Mt subset of the current insitu 777Mt Coal Resource (“Mabesekwa Coal
Resource”) (see RNS dated 30 November 2017), and while the 300Mt acquired has now been precisely
delineated with boundary coordinates, a Competent Person’s Report (“CPR”) inclusive of a new Coal
Resource statement under SAMREC guidelines for the 300Mt subset has not yet been completed. An internal
Kibo estimated compiled based on data derived from data provided by Shumba is set out below in Table 1
and Table 2. Coal Resources under the SAMREC guidelines will be provided in a future update once the CPR
noted above is completed. Notable synergies between the projects provide considerable benefits, including
economies of scale in equipment, execution, project finance and strong existing MCPP strategic partnerships.
MCIPP already has water and land use permits and environmental certification in place. Furthermore, a Pre-
Feasibility Study on the coal mine has been completed, as has a Scoping Study, which highlight the power
plant having a maximum capacity of 600MW (4x150MW) based on a coal delivery rate of 3.2Mtpa and a Life
of Mine of over 30 years.
Table 1: Mabesekwa 300Mt resource statement (Kibo Internal, dated 10th February 2018, 100% basis)
SEAM SEAM Depth IN SITU % IN SITU RAW QUALITIES (AIR DRIED)
THICK
below Megatons GEOLOGICAL Megatons RD ASH IM VM CV TS
NESS
No gm/
surface DISCOUNT with discount % % % % %
discount cc
SE 3.67 34.1m 33.87 11 30.15 1.90 48.6 5.5 18.8 11.1 1.45
SD 3.05 39.6m 25.30 11 22.52 1.92 49.4 4.9 18.7 10.9 1.28
SC 5.04 38.0m 65.16 11 57.99 1.90 47.5 5.3 19.3 11.5 1.54
SB 5.87 42.9m 119.11 11 106.01 1.85 45.7 5.2 18.8 12.2 1.34
SA 6.44 48.5m 93.72 11 83.41 1.78 38.8 4.7 17.7 15.8 2.00
GRAND TOTAL 337.16 300.07 1.85 44.7 5.1 18.6 12.9 1.57
Table 2: Mabesekwa 300Mt resource statement (Kibo Internal, dated 10th February 2018, 85% basis)
SEAM SEAM Depth IN SITU % IN SITU RAW QUALITIES (AIR DRIED)
THICK
below Megatons GEOLOGICAL Megatons RD ASH IM VM CV TS
NESS
No gm/
surface DISCOUNT with discount % % % % %
discount cc
SE 3.67 34.1m 28.79 11 25.63 1.90 48.6 5.5 18.8 11.1 1.45
SD 3.05 39.6m 21.51 11 19.14 1.92 49.4 4.9 18.7 10.9 1.28
SC 5.04 38.0m 55.39 11 49.29 1.90 47.5 5.3 19.3 11.5 1.54
SB 5.87 42.9m 101.24 11 90.11 1.85 45.7 5.2 18.8 12.2 1.34
SA 6.44 48.5m 79.66 11 70.90 1.78 38.8 4.7 17.7 15.8 2.00
GRAND TOTAL 286.59 255.06 1.85 44.7 5.1 18.6 12.9 1.57
Technical Notes:
? Minimum Seam thickness cutoff = 1.0m
? Dry Ash Free Volatile cut-offs (insitu raw qualities) = 26%
Director Appointment
Mr. Mashale Phumaphi aged 36, Meng, IMC
Mr. Phumaphi is the founder and Managing Director of Shumba Energy. Focused on funding and developing
energy projects in Africa, he was formerly part of the corporate finance team of a London based natural
resources corporate finance and issuing house. In addition to conducting investment analysis and research,
he has raised debt and equity finance for projects in the Americas, Europe and Africa. He began his career as
an engineer with Debswana Diamond Company based on Jwaneng Mine in Botswana. Mr. Phumaphi holds a
Master of Engineering degree from the University of Sheffield, is a member of the United Kingdom Society
of Investment Professionals (UKSIP) and is a member of the London based Association of Mining Analysts
(AMA).
The following are details of all current and former directorships in the previous five years held by Mr
Phumaphi
Current Directorships Former Directorships
Shumba Resources Ltd Street Spirit Trading 267
Sechaba Natural Resources (Pty) Ltd Lutrafon
Hangali Pottery (Pty) Limited Elasmolex Investments
Mass Deliveries (Pty) Ltd Thsani Cleaners
Intersperce (Pty) Limited
Shumba Energy Ltd
Shumba Energy SA (Pty) Ltd
Thamasha Properties
Mr Phumaphi will hold a 2.44% beneficial interest in the securities of the Company after the issue of the
Consideration Shares.
Mr Phumaphi entered into a letter of appointment with the Company to act as a Non-Executive Director on
03 April 2018 with effect from the closing of the Acquisition. The appointment is for a period of 12 months
and thereafter will continue until 30 days’ written notice of termination is given by either party, and also
subject to the articles of association of the Company (“Articles”) and immediate termination upon the
occurrence of certain defined events typical of an agreement of this nature. Mr Phumaphi may also
terminate his position immediately upon written notice of a conflict of interest or he otherwise feels he may
wish to resign, however no payment of any compensation will be payable by the Company in these
circumstances. Mr Phumaphi will receive an annual fee of €15, 000.00 payable monthly in arrears and he
will be indemnified to the extent lawfully possible under Articles, and provided, to the extent that the
Company has directors' and officers' liability insurance, such cover. Mr Phumaphi is subject to confidentiality
obligations and provisions relating to conflicts of interest.
There are no further details to be disclosed under Rule 17, Schedule 2 paragraph (g), or Schedule 4 of the
AIM Rules in relation to Mr. Phumaphi.
**ENDS**
For further information please visit www.kibomining.com or contact:
Louis Coetzee louisc@kibomining.com Kibo Mining Plc Chief Executive Officer
Andreas Lianos +27 (0) 83 440 8365 River Group Corporate Adviser &
Designated Adviser on JSE
Ben Tadd / Tom Curran +44 (0) 203 7000 093 SVS Securities Broker
Limited
Andrew Thomson +61 8 9480 2500 RFC Ambrian NOMAD on AIM
Limited
Isabel de Salis / +44 (0)20 7236 1177 St Brides Partners Investor & Media Relations
Priit Piip Ltd Adviser
Notes to editors
Kibo is a multi-asset resource development and energy company with a long-term goal of becoming a leading
power producer in Sub-Saharan Africa. The Company aims to tackle the acute power deficit which is severely
hindering economic development in the region.
Kibo’s flagship asset is the Mbeya Coal to Power Project (‘MCPP’) in Tanzania, which comprises the Mbeya
Coal Mine, a 1.5Mt p/a mining operation, and the Mbeya Power Plant, a 300MW 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 underpinned its value and confirmed an initial rate of return
of 69.2%. The 300MW mouth-of-mine thermal power station has long term scalability with the potential to
become a 1000MW plant. The completed full Power Feasibility Study highlighted an annual power output
target of 1.8GW based on annual average coal consumption of 1.5Mt. 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 of this critical power project of the MCPP, Kibo has assembled an international team
of advisors and partners including Engineering Procurement and Construction (‘EPC’) contractors and financial
teams that are assisting in the advancement and development of the MCPP. 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 has an 85% interest in the Mabesekwa Coal Independent Power Project (‘MCIPP’), a nearly identical
power project in Botswana. The project consists of 300Mt subset of the current in-situ 777Mt Coal Resource
and has water and land use permits and environmental certification in place. A Pre-Feasibility Study on the
coal mine has been completed, as has a Scoping Study, which highlight the power plant having a maximum
capacity of 600MW (4x150MW) based on a coal delivery rate of 3.2Mtpa and a Life of Mine of over 30 years.
Johannesburg
03 April 2018
Corporate and Designated Adviser River
Group
This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no.
596/2014 ("MAR").
Review by Qualified Persons
The information in this announcement that relates to the Mabesekwa Coal Resource is taken from a report by
CD van Nieker 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 SAMREC Standard and
for the purposes of the AIM Rules for Companies.
The information in this announcement that relates to the resource statements (Table 1 & 2) is taken from a
report compiled by Kibo’s technical team in collaboration with Michael Breed, B Eng (Min.), M Eng (Proj. Man.),
MMC, Pr.Eng., FSAIMM, senior engineer with Minxcon Consulting (Pty) Ltd.
The Company’s Technical Director, Noel O’Keeffe,B.Sc.(Hons) Geology P.Geo and a member of the Institute of
Geologists of Ireland, a director of Kibo and a Qualified Person within the meaning of SAMREC and the AIM
Rules for Companies has reviewed the resource report and the references to them in this announcement.
Glossary of Technical Terms
“air-dried” In equilibrium with a standard environment or with the normal
surroundings. Includes inherent (equilibrium) moisture content
for coal
“ash” A measure of the non-combustible material in coal, expressed as a
percentage. Determined by proximate analyses tests
“CV” Calorific Value. A measure of the heat content of a sample.
Normally measured in MJ/kg
“density” Measure of the relative "heaviness" of objects in terms of constant
volume. Density =-mass/volume
“IM” More correctly termed ‘equilibrium’ moisture. Moisture content
bound up in a coal sample which remains after that sample has
been air-dried.
“Indicated Resource” That part of a coal resource for which tonnage, densities, shape,
physical characteristics, grade and coal quality can be estimated
with a moderate level of confidence. Based on exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill-holes. The data-point locations are appropriate
to confirm physical continuity, while they are too widely or
inappropriately spaced to confirm quality continuity. However,
such locations are spaced closely enough for quality continuity to
be assumed.
“Inferred Resource” That part of a coal resource for which tonnage, grade and coal
quality can be estimated with a low level of confidence. It is
inferred from geological evidence and assumed but not verified
physical continuity with or without coal quality continuity. Based
on exploration, sampling and testing information gathered
through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill-holes which is limited or of
uncertain quality or reliability.
“insitu” In its original place. Most often used to refer to the location of
Mineral Resources
“insitu tonnage” Measure of mass of coal or other mineral in the ground
“megaton” Million tonnes (measure of weight)
“Measured Resource” A Measured Mineral Resource is that part of a Mineral Resource
for which quantity, grade or quality, densities, shape, and physical
characteristics are estimated with confidence sufficient to allow
the application of Modifying Factors to support detailed mine
planning and final evaluation of the economic viability of the
deposit
“Mineral Resource” or A “Mineral Resource” is a concentration or occurrence of
“Coal Resource” (where the mineral is coal) diamonds, natural solid inorganic material, or natural solid
fossilised organic material including base and precious metals,
coal, and industrial minerals in or on the Earth’s crust in such form
and quantity and of such a grade or quality that it has reasonable
prospects for economic extraction. The location, quantity, grade,
geological characteristics and continuity of a Mineral Resource are
known, estimated or interpreted from specific geological evidence
and knowledge.
“Mj/kg” Mega-Joule per kilogram (unit of energy)
“Mt” Million tonnes (measure of weight)
“MW” Million watts (unit of power, measure of rate at which energy is
generated or consumed)
“RD” Relative Density.
“SAMREC” South African Code for Reporting Mineral Resources and Mineral
Reserves
“tonnage” Quantities where the tonne is an appropriate unit of measure.
Typically used to measure or estimate quantities of in situ material
or quantities of material mined, transported, processed or sold.
“TS” Total sulphur, a coal quality measure
“volatiles/volatile A measure of the volatile component of coal as determined under
Matter/VM” fixed conditions in a laboratory as part of proximate analysis.
Date: 03/04/2018 12:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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