Kibo Announces new Consolidated Lake Victoria Gold

RNS Number : 5242L

Kibo Mining Plc

13 August 2013

 



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: KIBOISIN: IE00B61XQX41

("Kibo" or "the Company")

Dated: 13August 2013

Kibo Announces new Consolidated Lake Victoria Gold Exploration Portfolio which includes a Gold Resource of 797 900 Ounces

·    First phase consolidation of Lake Victoria Exploration Portfolio completed, encompassing relinquishment of less prospective areas and opportunistic acquisition of selected new project areas with significant known mineralized structures.

 

·    Consolidated Lake Victoria Portfolio includes Imweru & Lubando gold projects in northern Tanzania with a combined estimated Measured, Indicated & Inferred Mineral Resource of 797 900 oz Au.

 

·    Projects on strike and within same greenstone belt as AngloGold Ashanti's Geita gold deposits.

 

Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX: KBO), the mineral exploration and development company focused on gold, nickel, coal and uranium projects in Tanzania, is pleased to announce that it has completed phase 1 of the company's consolidation strategy for its tenement portfolio in Lake Victoria, as part of the company's on-going assessment of its total license holdings in Tanzania.  The consolidated portfolio now also includes two brownfield exploration projects in northern Tanzania within the gold prolific Lake Victoria Goldfield. The projects are located approximately 35 km East and West (respectively) and along strike of AngloGold Ashanti's world class Geita deposits which have an estimated pre-mining gold endowment of 23 M oz @ 4g/t.

The consolidation of the Lubando and Imweru projects into the Lake Victoria gold portfolio at a combined direct cash cost of USD 150,000 and the relinquishment of 595km² of prospecting licenses fulfilled the review's primary objective to reduce the size of land holdings and associated carrying costs, and to focus on more advanced project areas where targets with higher prospectivity could be fast-tracked up the value curve. The Company intends to procure updates of the existing technical reports and resource calculations for the Lubando and Imweru projects, which will in turn serve as a basis for the further planning and execution of more advanced exploration work on these projects.

Louis Coetzee, CEO of the Company, commented today:

"The Company is very pleased with its new consolidated gold portfolio in the Lake Victoria region. The consolidation represents a meaningful step in our on-going strategy of rightsizing our mineral license portfolio by relinquishing some early stage licenses and consolidating regional blocks of more advanced and prospective ground in known gold regions of Tanzania. These projects complement our existing gold exploration assets in northern Tanzania and provide us with the opportunity to develop viable gold resources with in Tanzania's premier gold mining area in the short to medium term.

With the addition of a gold resource (in addition to the Rukwa Coal Resource), the Company has success fully added substance to each of its commodity portfolios, delivering on its commitment made to its shareholders a year ago. Moreover, it delivered this amidst one of the most trying and challenging periods for junior exploration companies in recent history. During this period The Company:

1)   Entered into a joint venture with one of the world's largest nickel producers, for the exploration and possible development of the Company's nickel portfolio;

2)   Entered into a Memorandum of Understanding for the development of the Rukwa Coal to Power Project with Korean East West Power Company, one of the world's top energy companies. Kibo's Rukwa Coal to Power Project recently also received a vote of confidence from the Tanzanian Government when it was included in the Tanzanian Government's National Power Strategy; 

3)   Advanced and repositioned its gold exploration portfolio by means of an extensive evaluation and consolidation process which produced:

·    A significantly reduced portfolio which will bring about considerable savings in license fees, which in turn means an increase in available resources for value generation through focused exploration work.

·    A focused and significantly more advanced gold portfolio with an  inferred / indicated resource that provides an opportunity for the immediate increase and upgrading of the existing resource through further resource delineation and development.

Additional Technical Information

Imweru & Lubando Gold projects

 

Location

 

Imweru & Lubando encompass mineral concessions covering areas of 251 km² and 75 km² respectively close to the southern shore of Lake Victoria approximately 100km and 80 km west of the regional city of Mwanza.  The projects are located equidistant of about 35 km West and East respectively of the gold mining town of Geita. Geita is the location of Anglo Gold Ashanti's world class Geita Gold Mines comprising the open pits around Geita itself and at Kukuluma 15 km to the Northeast. The estimated total pre-mining gold endowment of the Geita Mines is a combined 23 M oz. @  4 g/t and the last published resourcesare 12.28 Mt @  2.27g/t. (AngloGold Ashanti Mineral Resource and Reserve Report 2012).

 

Geology and Mineralisation

 

Both Imweru and Lubando occur on strike and within the same geology as that hosting the Geita mineralization. The geology comprises a sequence of metabasalts (greenstones) and felsic volcanics with subordinate diorite, quartz porphyries, and metasediments together forming the Geita Greenstone Belt (GGB) which is  intruded in parts by syn and  post tectonic granites. The GGB is one of a number of similar Archaean age greenstone belts in this part of northern Tanzania that together make up  the Lake Victoria Gold Field, the third largest gold producing region in Africa after the Witwatersrand in South Africa  and the Tarkwa region of Ghana. Other major gold mines in the region include African Barrick Gold's Bulyanhulu, Buswagi and Mara Mines as well as a number of advanced gold projects at the pre-feasability and feasibility development stages.

 

The mineralization at Imweru and Lubando is hosted within silicified zones in metabasalt associated with disseminated sulphides (pyrrothite, pyrite and arsenopyrite) and associated sericite, chlorite and carbonate alteration zones. Mineralisation at Imweru is hosted in multiple zones over an East-West strike of 10 km and to a depth of about 200 m. At Lubando mineralization is hosted within 4 zones over a distance of approximately 1.3 km and to a depth of 200 m.

 

Previous Exploration

 

Imweru and Lubando were previously operated by Great Basin Gold Rusaf Gold Limited(GBGR), a subsidiary of Great Basin Gold (formerly US and South African listed) under an option agreement with African Barrick Gold Plc. Following preliminary mapping, soil sampling and geophysical surveying a number of drill programmes (RAB, RC and Diamond) were conducted in the period 2002 to 2008.  This culminated in a total of 65,989 m in 1322 holes being drilled at Imweru and 27,770m in 670 holes being drilled at Lubando. The drilling results were used to prepare NI 43-101 compliant resource estimates for both projects. The estimates were prepared by Canadian consultants, EBA Engineering Consultants Ltd. and published in two reports dated 1March 2010 (Imweu) and 31 August 2009  (Lubando). The projects have compliant gold resources of 629,600 oz.  and 168,300 oz respectively. The Base Case resource estimates for both projects are shown on Table 1 and Table 2 below respectively (tables were extracted from the reports).

 

TABLE1:IMWERU MINERAL RESOURCE SUMMARY - BASECASE*
Category	Measured Resource	Indicated Resource	Inferred Resource
Resource(t)	-	-	17,649,900
Grade(g/t)	-	-	1.11
Grade(oz/ton)	-	-	0.032
Total Gold(oz)	-	-	629,600

*Numbers are rounded. Composites capped at 25g/t gold. Cut-off grade of 0.5g/t gold based on a gold price of US$850/oz and assumed100% metallurgical recovery.CIM definitions were followed for Mineral Resources.

 

TABLE2: LUBANDO MINERALRESOURCE SUMMARY - BASECASE*
Category	West Zone	East Zone South	East Zone Mid	East Zone North	Total
Measured Resource
Measured Resource(t)	107,900	4,880	16,900	54,440	184,150
Grade(g/t)	1.69	2.52	1.72	2.48	1.95
Total Gold(oz)	5,900	400	950	4,340	11,500
Indicated Resource
Indicated Resource(t)	280,710	18,330	61,000	149,350	509,420
Grade(g/t)	1.61	2.23	1.89	2.73	1.99
Total Gold(oz)	14,500	1,300	3,700	13,120	32,600
Inferred Resource
Total Resource(t)	1,090,000	65,470	209,340	535,330	1,900,140
Grade(g/t)	1.27	1.56	3.34	3.13	2.03
Total Gold(oz)	44,550	3,300	22,500	53,900	124,200

 

* Numbers are rounded. Composites capped at10.85g/tgold. Cut-off grade of 0.5g/t gold based on a gold price of US$850/oz and assumed100% metallurgical recovery.CIM definitions were followed for Mineral Resources.

 

 

Resource Potential

 

In line with the recommendations in the resource reports, Kibo considers that continued exploration on both projects by follow up drilling programmes is warranted in order to improve the quality of the existing resource and to drill test adjacent anomalous areas resulting from previous soil sampling and geophysical survey results. To date the mineralized zones have been tested to a maximum depth of approximately 200 m and they remain open on-strike.  The Company believes that there is excellent potential for defining significant further resources in the near term through exploration targeted at open areas of the resource and also through re-modelling of the resource at the current gold price (which is >US$1,300/oz compared to the US$850/oz used in the previous resource estimates).

 

Rational for Consolidation

 

This consolidation is compatible with Kibo's on-going strategy of rationalizing and consolidating its extensive mineral exploration portfolio in Tanzania. The Company previously announced (June 2013) a significant reduction in its grass roots mineral interests in Tanzania and this marks a consolidation of more advanced gold exploration properties in a region where Kibo has already established some of its most prospective early stage gold projects. Kibo already holds a number of properties both in the Geita region and in the surrounding greater Lake Victoria Goldfield. Exploration to date by the Company on some of these licences within its Mhangu Block in the east part of the Goldfield has already established trenching and drill targets, work on which had previously been temporarily suspended in order to focus resources towards advancement of its flagship Rukwa Coal to Power Project.

The Lubando and Imweru projects complement Kibo's existing gold projects in this region and will benefit from the logistical and operational advantages of being close to the Company's existing operations when exploration resumes in 2014.

In keeping with its on-going rationalization and consolidation of its license portfolio, the Company will continue to review further consolidation opportunities in this region on projects which show good gold potential and can be consolidated on favourable terms.

Contacts

Louis Coetzee	[phone]	Kibo Mining plc	Chief Executive Officer
Andreas Lianos	[phone]	River Group	Corporate Adviser and Designated Adviser on JSE
Jon Belliss	[phone]	XCAP	Broker
Stuart Laing	[phone]	RFC Ambrian Limited	Nominated Adviser on AIM
Matt Beale	[phone]	Fortbridge	Investor Relations

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

General Background & Strategy

Kibo was established in early 2008 to explore and develop mineral deposits in Tanzania, East Africa and was admitted to AIM in London on 27 April 2010 and AltX in Johannesburg on 30 May 2011.  The Board of Kibo is composed of professionals whose experience include mineral exploration, mine development, mining finance, tax, law, mergers and acquisitions, and financial control of public companies. It is supported by competent and motivated a Tanzanian staff that operates from Kibo's operations office in Dar es Salaam.

The mineral assets of the Company comprise five projects areas in Tanzania - Haneti (nickel, PGE and gold), Morogoro (Gold), Lake Victoria (Gold), Rukwa (Coal) and Pinewood (Coal & Uranium).

The Haneti project is the subject of a joint venture with Brazilian Votorantim Metais Participações Ltda, a member of Votorantim Group. The Rukwa and Pinewood projects are situated close to the Mtwara Corridor,an area where the Tanzanian Government has committed to significant infrastructure development and which has seen recent multi-million dollar investment in coal and coal-fired power stations and uranium exploration.

The Rukwa project is substantially more advanced than Kibo's existing exploration projects, with a significant Mineral Resource of thermal coal already defined. The project enjoys strong support expressed by the Tanzanian Government for the expedited development of a coal mine and mine-mouth coal-fired power plant and which is further enhanced by the now formal relationship between the Korean Government owned Korean East - West Power Co. Ltd. ("EWP")  and Kibo. In this relationship the parties have entered into a formal MOU which states the parties' respective commitments towards the joint development of the Rukwa Coal to Power Project ("RCPP"), where EWP will be responsible for developing and operating the power generation side of the RCPP and Kibo will be responsible for developing and operating the mining side of the RCPP.

Kibo's objective is to build shareholder value in a sustainable manner.  This objective will be pursued primarily through active exploration of its own projects and by using the Company's experience in Tanzania to acquire attractive exploration and development assets on competitive terms that can be moved swiftly up the value curve by using the Company's own skills base whilst also seeking to benefit from strategic collaborative relationships with industry leaders who have special skills and competencies within their chosen fields of focus.  Kibo will undertake continual risk assessment of its projects and take whatever actions it believes are necessary to ensure that these risks are mitigated.

Review by Qualified Person

The information in this announcement that relates to the Imweru and Lubando mineral resources is taken from reports titled "Technical Report on the Imweru property (Updated), Mwanza, Tanzania" dated March 1, 2010  and "Technical Report on the Lubando property, Mwanza, Tanzania" dated 31^st  August 2009" (the "Reports") Both Reports are NI 43-101 compliant and were prepared for Great Basin Gold Rusaf Gold Limited by Nathan Eric Fier C.P.G., P.Eng. Market Director for EBA Engineering Consultants Ltd and a Senior Mining Consultant. Mr. Fieris registered as a Certified Professional Geologist with the American Institute of Professional Geologists, Registration No 10062, and a professional Engineer in British Columbia, Canada Registration No. 135165.He has extensive experience in the evaluation and reporting of Archaean Gold projects. The Company's Exploration Director, Noel O'Keeffe has reviewed the Reports and the references to them in this announcement.

Johannesburg

13 August 2013

Corporate and Designated Adviser

River Group

 

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