PPA and Financing Update for African Power Project

RNS Number : 8852Q

Kibo Mining Plc

18 September 2017

 

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

18 September 2017

Kibo Mining Plc ('Kibo' or the 'Company')

"Moves Closer to Concluding MOU and Securing Project Funding for the

Mbeya Coal to Power Project"

Kibo (AIM: KIBO; AltX: KBO), the Tanzania focused mineral exploration and development company, is pleased to announce that it has made considerable progress in both securing project financing and progressing the Power Purchase Agreement ('PPA') with Tanzania's sole energy provider, Tanzania Electric Supply Company Ltd ('TANESCO') in relation to its advanced Mbeya Coal to Power Project ('MCPP').

The MCPP is the Company's flagship asset, which entails the development of the Mbeya Coal Mine, a 1.5Mtpa operation, based on a defined 120.8Mt coal Mineral Resource, and the Mbeya Power Plant, a 300MW mine-mouth power station. The MCPP is being advanced to capitalise on the acute energy deficit in Tanzania and the wider East African region and has received strong support from both the Government and international corporates.  The Company has received formal Letters of Intent from multiple international EPC/ power developers and financing conglomerates keen to provide full project level equity funding for the MCPP.  Accordingly, advanced negotiations with all potential project level investors to determine the optimal partner(s) are currently underway.        

Additionally, the Company's Memorandum of Understanding ('MOU'), as a precursor to the final PPA with TANESCO, has passed all the relevant legislative stages and is waiting for final confirmation from the Attorney General.  The Company anticipates updating shareholders further on progress in this respect in the near future. The MOU, once signed, will provide a fixed framework within which the fundamental commercial and technical components of the PPA will be negotiated and agreed. 

Louis Coetzee, CEO of Kibo mining, said: "Throughout the years we have enjoyed an excellent working relationship with the Tanzanian Government, and we continue to work successfully under the new mining framework.  Having so many global powerhouses expressing a keen interest to partner with us is a fantastic validation of Kibo, the work we've done at the MCPP (which recently won the General Electric Innovation Award), and the inherent value of the project.  Furthermore, and importantly, their interest emphasises that international companies have a continuing belief in Tanzania as an attractive investment destination.  With the final negotiation of the PPA approaching, full Feasibility Studies complete and development finance on its way to being secured, this nationally significant project is reaching a tipping point that I believe will see stakeholders rewarded." 

**ENDS**

For further information please visit www.kibomining.com or contact:

Louis Coetzee	[phone]	Kibo Mining Plc	Chief Executive Officer
Andreas Lianos	[phone]	River Group	Corporate Adviser and Designated Adviser on JSE
Jon Belliss	[phone]	Beaufort Securities Limited	Broker
Andrew Thomson	[phone]	RFC Ambrian Limited	NOMAD on AIM
Hugo de Salis / Priit Piip	[phone]	St Brides Partners Ltd	Investor and Media Relations Adviser

Notes to editors:

Kibo Mining is listed on the AIM market in London and the AltX in Johannesburg.  Kibo Mining is focused on exploration and development of mineral projects in Tanzania, and controls a large mineral rights portfolio in Tanzania.

Kibo Mining holds a thermal coal deposit at Mbeya, which has a significant NI 43-101compliant defined resource, and is developing a 250-350 MW mouth-of-mine thermal power station, the Mbeya Coal to Power Project ("MCPP"), previously called the Rukwa Coal to Power Project ("RCPP"), with an established management team that includes ABSA/Barclays as Financial Advisor. Kibo has completed a Coal Mining Definitive Feasibility Study and a Power Pre- Feasibility Study for the Mbeya project and has recently announced the completion of an Integrated Bankable Feasibility Study report for the project. 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 and signed an EPC contract with SEPCO III on the 19th December 2016.

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'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. Kibo Mining 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.

Updates on the Kibo Mining's activities are regularly posted on its website www.kibomining.com.

This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no. 596/2014 ("MAR").

Johannesburg

18 September 2017

Corporate and Designated Adviser

River Group

 

END

 

 

UPDKELBFDKFLBBE