Operational Update

RNS Number : 8491F

Kibo Mining Plc

21 June 2012

 

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: IE00B61XQX41

("Kibo" or "the Company")

Operational Update

Dated: 21 June 2012

Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO, AltX: KBO) the mineral exploration and development company focused on gold, nickel, coal and uraniumprojects in Tanzania, is pleased to provide an operations update. The Company has received final results from its Stage 1 exploration programme at its Lake Victoria, Haneti amd Morogoro projects which it implemented over the period October 2011 to March 2012. The results highlights are shown below and discussed in detail later in this announcement. The results are very encouraging, and support the programme's primary objective of identifying initial targets for near term drilling. Drilling together with extension of early stage exploration surveys over more of the Company's large licence portfolio will be part of a Stage 2 programme to commence in Quarter 3, 2012.

Summary Highlights

·      Lake Victoria - Drill and trenching targets resolved on three Prospecting Licences;

·      Haneti -  Drill targets for nickel sulphide mineralisation  resolved  from ground electromagnetic surveys at Mwaka and Mihanza Hills;

·      Morogoro South  - Six gold-in-soil anomalies identified from regional sampling along the central 28 km strike length of the Ruvu Nappe ;

·      Morogoro North  - Ten gold-in-stream anomalies identified from regional stream sediment sampling over two southern Morogoro North Prospecting Licences.

Louis Coetzee  CEO of Kibo commented:

"The Board is pleased to provide this operational update and to inform shareholders that all the objectives set for Stage 1 of Kibo's two stage exploration program have been achieved, i.e. technical, cost and time. With regard to cost and time it is worth noting that the company completed Stage 1 two months ahead of schedule and within the approved budget"

Operations Details

Introduction

Kibo's Lake Victoria, Haneti and Morogoro projects give the Company access to an approximate 18,000 km² land package of highly prospective early stage exploration ground for gold and base metals within Tanzania's established and newly emerging mineral exploration areas. Stage 1 field exploration, the results of which are being reported here, had a budget of £1.3M and was the first stage of a board approved £5.3M exploration programme to comprehensively evaluate these projects with the objective of discovering and outlining  gold (Lake Victoria and Morogoro) and base metal (Haneti) resources. The Company implemented the Stage 1 programme to follow up on  priority target areas which were selected based on positive results from previous regional sampling surveys and geological reconnaissance. The programme comprised three main elements of early stage exploration surveys as follows:

1.  In-fill soil surveys over gold anomalous areas identified from previous regional soil surveys within selected prospecting licences on the Lake Victoria project;

2.   Pitting and ground geophysics at Haneti to test both laterite and sulphide nickel targets identified from previous soil, trenching and geophysical surveying;

3.. First pass regional stream and soil sampling surveys over priority areas identified on Morogoro South (Ruvu Nappe geological target) and Morogoro North (Berega and Gairo areas).

The areas identified for this initial work represent about 5% of the total ground area potentially available to the Company and covers those Prospecting Licences ("PLs") which have been recently issued  ("active PLs") from the large portfolio of Company applications, renewals and offers that are in the pipeline. As Tanzanian licence regulations do not permit commencement of field work in an area until the relevant PL becomes active and there is a system delay of up to 1 year in processing and issuing PLs, the Company did not have all the licences available to it for exploration for which exploration expenditure had been allocated. This has resulted in just £0.6M expenditure from the Stage 1 budget of £1.3M during the exploration period with the shortfall affecting the Lake Victoria project in particular. The balance will be carried forward as part of Stage 2 exploration to be expended as PLs become active. It should be noted that many of these PLs encompass highly prospective areas which remain to receive first pass exploration.

The following section describes in detail the field work carried out during Stage 1 exploration. Maps to accompany this section can be found under the "Projects" menu on the Company's website www.kibomining.com.

Lake Victoria

Introduction

Work on the Lake Victoria project focused primarily on areas where previous reconnaissance soil sampling has produced anomalous gold values. Three PLs were selected for follow up infill soil sampling, 6283/2010, 7589/2012 and 7590/2012.  A fourth, 5243/2008, which had not received previous work was also selected for detailed soil sampling based on its proximity to a small historic gold showing.

PL 6283/2010

A total of 397 infill soil samples were taken on PL 6283/2010 centred on a small banded ironstone ridge over which regional sampling from 2007 had produced a number of values  in excess of 100 ppb gold. An area of 3.7 km² on a grid spacing of 100 m by 100 m was sampled to verify and provide infill soil sample coverage. The results confirm and further resolve the previous anomaly which now extends to the NW from the ridge over 2 km and remains open-ended to the NW. Soil gold values on the ridge where bedrock is exposed are up to 219 ppb while the anomaly is defined by gold values in the range 20 to 50 ppb  off the ridge towards the NW. Further work in this area will comprise trenching and sampling across the anomaly on the ridge top to ascertain if zones of economic gold grades can be established in bedrock. Soil sampling will also be extended to the NW to define the full extent of the gold anomaly. Should the results of this work prove encouraging, Rotary air blast (RAB) drilling will be undertaken to test for gold mineralised zones particularly in areas where the soil anomaly may persist over deeper regolith cover to the NW.

PL 7589/2012

A total of 266 infill soil samples were taken on PL 7589/2012 over an area of 1.8 km² on a banded ironstone ridge where soil regional sampling from 2007 showed values in the general range 20-50 ppb with a maximum outlier value of 524 ppb. The infill soil sampling was undertaken on a grid at 50 m by 100 m and the results define a gold anomaly broadly coincident with the NW trending ridge over a distance of 1.5 km. The gold anomaly is defined on gold values in the range of 20 to 50 ppb and a maximum value of 149 ppb. The gold values whilst considered anomalous are not exceptional given their location on a ridge of ironstone outcrop and rubble where they most likely reflect the background gold values to be expected in this type of rock. However they are sufficiently interesting to warrant additional prospecting, rock sampling and trenching particularly at locations where gold-in-soil values are highest.

PL 7590/2012

A total of 353 infill soil samples were taken on PL 7590/2012 over an area of  3.2 km² where previous regional soil sampling results showed some multi-point anomalous gold values in the range 20 -50 ppb on four  sample lines 400 m apart. The infill soil sample results are very encouraging and have resolved the previous sample results into a number of multi-point and individual high gold-in-soil values which collectively show a NW trend. Anomalous gold values are in the general range 20 to100 ppb with high outlier values of 543, 133 and 187 ppb. The sampled area which covers flat cultivated land provides an immediate RAB drilling target for the Company's Stage 2 exploration programme.

PL 5243/2008

A soil sampling survey was undertaken on PL 5243/2008 immediately to the south of a small historic gold working on an area of mapped greenstone to test for possible additional mineralised structures associated with this working. The soil sampling grid was orientated N-S, sample lines were 400 m apart and sampling was at 200 m stations. A total of 180 samples were taken over an area of approximately 15 km². Apart from one single anomaly point of 50 ppb, 30% of the samples showed gold values in the range 1 to 20 ppb  and the remainder  had gold values less than the detection limit. The soil results here are disappointing and this PL will not be a priority for follow up during Stage 2 exploration.

Planned Stage 2 work at Lake Victoria

Specific follow up work  on PLs 6283/2010, 7589/2012 and 7590/2012 where encouraging results have been obtained from Stage 1 exploration  will comprise extension of  infill soil sampling, trenching, geological mapping, rock sampling and RAB drilling. It is likely that a RAB drilling programme will be undertaken on PL 7590/12 in the near term while the other PLs will require further surface evaluation (trenching, rock sampling and geological mapping) to see if drilling programmes are warranted.  Concomitant with the work on these areas, geological appraisal of the remaining large number of Kibo licences within Lake Victoria is on-going and field programmes will be implemented according as the PLs become active.

Haneti

Field exploration at Haneti followed up on the anomalous nickel values previously obtained from soils, pitting and trenching in the Kwahemu, Yobo, Mihanza and Mwaka hill areas east of Haneti Village. Previously reported results included 93 m at 0.4% nickel from trenching Mwaka Hill and a soil anomaly with values of 0.1% to 0.3% nickel at Kwahemu Hill. The field programme at Haneti comprised two elements:

A. Initial pitting programme to evaluate depth of weathering and nickel laterite potential in the lower relief areas between and adjacent to the small hills such as Kwahemu and Yobo where modestly nickel enriched laterite profiles have been established from  previous pitting and sampling surveys;

B. Ground EM and magnetic surveys over Mwaka and Mihanza Hills to verify nickel sulphide potential on these target areas where a previous Induced Polarisation (ground geophysical method) survey at Mihanza had already identified a conductor suggesting the possible occurrence of nickel sulphide mineralisaton at depth.

Pitting

The pitting programme at Haneti was undertaken between the NW end of Kwahemu Hill and Mwaka Hill over an area of 10 km². Pits were manually excavated at 400 m spacing along three NE-SW lines of lengths 2, 2.8 and 3.2 km respectively. A total of 23 pits were planned but hard ground conditions allowed for just 14 pits to be successfully excavated and sampled. Pits were dug to depths varying from 1.7 m to 4.9 m (depending on ground conditions) and channel sampled down the sidewalls in contiguous intervals varying from 0.3 m to 1 m. The pit profiles showed poor laterite development over the area sampled and the majority of the pits encountered bedrock of serpentinite, amphibolites or granite-gneiss at shallow depth.   A total of 52 samples including QC samples were submitted to ALS labs in Mwanza (preparation) and onward to Johannesburg for 30 g gold fire assay and multi-element analyses. As expected from the shallow regolith profiles the sample results showed no significant values for all elements and the maximum nickel value was 0.27%.

The pitting survey was a trial programme to test the potential for the development of a deep laterite profile with economic nickel grades at the sampled locations. While the results show no laterite nickel potential in the area tested, the results do provide valuable geological information and confirm serpentinite sub-outcrop over a wider area than had been previously mapped. Weathering of this rock in a favourable geological environment provides the source for lateritic nickel and the area tested represents <10% of  a larger belt which extends up to 80 km along strike and uncertain maximum width which is believed to be underlain by this type of rock. Based on the results and difficulties encountered in penetrating the hard ground, further testing of laterite nickel potential will be by RAB drilling.

Ground EM & magnetic survey

The ground electromagnetic (EM) and and magnetic surveys  were carried under contract by Spectral Geophysics of Botswana (Spectral) over areas of 7.2 km² and 7.56 km² at Mwaka and Mihanza Hills respectively. Time domain EM surveying (TDEM) was conducted over 500 m by 200 m rectangular transmitter loops at 50 m stations on NW-SE trending lines  200m apart  using a 3 component time domain system with a base station frequency of 1 Hz. Magnetic surveying was carried out over the same gridded area. The results presented below are summarised from the geophysical report prepared by Spectral on their interpretation of the results from the surveys.

At Mwaka Hill, the EM  results have indicated two NW-SE trending conductors  of 800m and 400m in length respectively which could be associated with nickel sulphide mineralisation at depth. The significance of these conductors can now only be ascertained by drilling and they provide two well resolved drill targets which will be tested as part of Stage 2 exploration at this locality.

At Mihanza Hill, the EM results has indicated a large formational conductor, which is most likely associated with serpentinised ultramafics. However, the geophysical report suggests a possibility that this conductor may be caused by nickel sulphide mineralisation at depth and it is likely that the Company will also test this target as part of a Stage 2 drill programme at Haneti.

Planned Stage 2 work at Haneti

The  initial Stage 2 exploration activity at Haneti will comprise the implementation of a diamond drill programme to test the drill targets identified in the Spectral geophysical report at Mwaka and Mihanza. Exploration for nickel sulphide targets and gold will take priority over nickel laterite exploration during during Stage 2. Should the planned drilling at Mwaka and Mihanza encounter nickel sulphide mineralisation, it is planned to implement an airborne EM survey over the entire Haneti ultramafic belt in order to generate more drill targets for this type of mineralisation. Prospecting, rock sampling and mapping will continue in the southern and western parts of the Haneti project during Stage 2 where on-going artisanal mining indicates potential for the discovery of significant greenstone related gold mineralisation.

Recent Developments

The Company's recent announcement of the 8^th May 2012 on the signing of a Memorandum of Understanding to pursue a strategic joint venture with Brazilian industrial conglomerate Votorantim for the further exploration of the Haneti project represents an independent affirmation of the prospectivity of this area. Contingent on the conclusion of a Joint Venture, Votorantim will be required to spend up to £2.7M in exploration over a period of three years to earn a 50% interest.  This will allow the Company to accelerate exploration over this large project for both nickel-PGMs and gold at minimum cost.

Morogoro South

Field exploration at Morogoro South focused on a regional geological structure, the Ruvu Nappe which is associated with both artisanal alluvial and hard rock mining at various locations along 45 km of its length. Kibo undertook regional soil sampling across the central 28 km portion of the structure over which it holds active PLs.

Soil sampling was carried out at 100 m stations on 8  E-W trending lines, 3 to 4 km apart and 9 km to 13 km in length. The sampling lines were orientated to cut across the strike of the N-S trending Ruvu Nappe at wide spaced intervals to target any gold mineralised zones that may be coincident with, or parallel to the structure. A total of 922 samples including QC samples were submitted to ALS labs in Mwanza (preparation) and onward to Johannesburg for 30 g gold fire assay and multi-element analyses.

The majority of the gold values were at or below expected background values of 1 to 5 ppb. However within this population there are a number of anomalous values up to a maximum of 156 ppb which occur in clusters of 1-3 consecutive sample points. These  provide 6 target areas for follow up sampling, prospecting and geological mapping during Stage 2 exploration. Significantly, one of these gold anomalies shows coincident anomalous geochemistry for arsenic, bismuth and stibnite which are important gold pathfinder elements in some geological terrains and should prove useful in follow up work and extension of regional soil & stream sediment sampling surveys to other areas within the Morogoro South tenements.

Planned Stage 2 work at Morogoro  South

Near term Stage 2 exploration at Morogoro South will comprise detailed evaluation of the anomalous gold-in-soil anomalies identified from the Stage 1 results by detailed infill soil sampling and geological prospecting, mapping and rock sampling. Should drill targets emerge from this work, these will be tested later in the Stage 2 work programme. Regional soil and stream sediment sampling and geological prospecting, mapping and rock sampling surveys will be extended to other PLs in the Morogoro South Block as they become active.

Morogoro North

Kibo's Stage 1 exploration at Morogoro North comprised an extensive stream sediment sampling survey for gold on the southern part of the exploration block on PLs 6717/2010 and 6598/2010 around the villages of Gairo and Berega. This area is hilly with a good drainage and the Company considered stream sediment sampling to be as an efficient early stage exploration technique for this region to resolve areas for more detailed follow up work. The survey encompassed an area of about 200 km² and was sampled at a  density of 2-3 samples per km²  for a total of 563 samples. Following an initial first pass survey and review of gold results, follow up sampling was undertaken around some anomalous areas to provide greater resolution of the anomalies.

97% of the samples show gold values in the range <1 to 20 ppb with the remaining 3% of the samples  (16 samples) showing anomalous values in the ranges 20 -50 ppb (8 samples) and >50 to 826 ppb (8 samples). These anomalous values with greater than >20 ppb gold-in-stream provide 10 priority sub-areas for follow up work.

Planned Stage 2 work at Morogoro  North

Regional stream sediment sampling has been successful at Morogoro North in resolving 10 sub-areas for follow up work during Stage 2 exploration. Stage 2 work will include infill stream sampling, soil sampling, prospecting/rock sampling and geological mapping over these areas.  In addition to these activities, the stream sediment sampling survey will be extended to other licences in the Morogoro North block where the terrain is appropriate to this type of early stage regional survey. Should drill targets emerge quickly from this work, they will be tested later during Stage 2 exploration.

Review by Qualified Person

The information in this announcement that relates to exploration results, mineral resources or ore reserves is based on information reviewed by Noel O'Keeffe, PGeo who is a member of the Institute of Geologists of Ireland. Noel O'Keeffe is also the Exploration Director of Kibo. Noel O'Keeffe has at least five years experience within the sector which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a qualified person under the AIM Rules. Noel O'Keeffe consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

Enquiries

Louis Coetzee	[phone]	Kibo Mining plc	Chief Executive Officer
Noel O'Keeffe	[phone]	Kibo Mining plc	Exploration Director
Stuart Laing	[phone]	RFC Ambrian Limited	Nominated Adviser
Andreas Lianos	[phone]	River Group	Corporate Adviser and Designated Adviser   (AltX)
Matthew Johnson	[phone]	Northland Capital	Broker (Assistant Director, Corporate Finance)
Nick Bealer	[phone]	Cornhill Capital Ltd	Broker (Corporate Broking)
Matt Beale	[phone]	Fortbridge	Public Relations

General Background & Strategy

Kibo is a public company registered in Ireland (company number 451931). Its registered office is Kibo Mining plc, Suite 3, One Earlsfort Centre, Lower Hatch Street, Dublin 2, Ireland. Kibo was established in early 2008 to explore and develop mineral deposits in Tanzania, East Africa and was admitted to AIM on 27 April 2010 and AltX in South Africa on 30 May 2011.

The Board of Kibo is composed of experienced professionals spanning mineral exploration, mine development, mining finance and financial control of public companies. It is supported by well trained and motivated Tanzanian staff that operates from Kibo's exploration offices in Dar es Salaam and Mwanza.

The mineral assets of the Company comprise three existing and two newly acquired projects in Tanzania - Haneti (nickel, platinoid elements and gold), Morogoro (Gold) and Lake Victoria (Gold) which give Kibo access to over 18,000 km² of early stage exploration licences in Tanzania's premier gold mining region, the Lake Victoria Goldfield and within the newly emerging gold exploration regions in eastern Tanzania.

The Company has recently also acquired, subject to certain suspensive closing conditions and approvals, coal and uranium exploration projects as publicly announced on 2 April 2012 in accordance with its multi-commodity exploration strategy.

Kibo's objective is to enhance Shareholder value through acquisition, exploration and development of mineral assets in Tanzania. This objective will be pursued primarily through active exploration, particularly drilling on its current projects and by using the Company's experience in Tanzania to acquire further quality mineral projects on competitive terms that can be quickly evaluated and taken to the next stage of development. Kibo will undertake continual risk assessment of its projects and take whatever actions it believes are necessary to ensure that these risks are mitigated.

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

London

Corporate and Designated Advisor

River Group

21 June 2012

 

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