Kibo Energy PLC

M&A Activity • Dec 16, 2014

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RNS Number : 7542Z

Kibo Mining Plc

16 December 2014

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")

16 December 2014

Preliminary Economic Assessment Update - Imweru Gold Project

Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX: KBO), the Tanzania focussed mineral exploration and development company, is pleased to confirm that the Company has now received the final Preliminary Economic Assessment (PEA) Report in respect of the Imweru Gold Project.

Background

The Company's announcement of 14th October 2014 confirmed the commissioning of a Definitive Feasibility Study in respect of the Imweru Gold Project(the "Imweru DFS"), situated in the Lake Victoria Goldfields, Tanzania. The project is 90% owned by Kibo Mining plc with the remaining 10% held by Barrick East Africa Exploration Limited. The Imweru DFS is being undertaken by Minxcon Projects and Stage 1 of the Imweru DFS is a PEA, the subject of the report now received. We would like to thank the team at Minxcon Projects for their hard work and professionalism in the timely delivery of this key report.

It is the Company's stated intention to secure the earliest possible value crystallisation through commercial development of its key projects, one of which is the Imweru Gold Project. At the point of commissioning the Imweru DFS, the Company had been able to confirm that in respect of the Imweru Project:

-     there was sufficient JORC compliant gold Mineral Resources (550,000 total ounces) to support early production;

-     there was a high degree of confidence that additional exploration would add to the resource inventory to supplement existing resources and extend prospective mine life;

-     mineralisation appeared suitable for traditional processing methodologies and that feed ore would be suitable for a variety of processing options; and

-     substantial localised infrastructure exists, recognising the considerable gold exploration and mining activities already undertaken in the region.

The PEA was intended to build on the work completed historically, and provide an indication as to the potential economic value of the greater Imweru gold project and notably, the cash flow early production could provide to the Company, with a view to assist the Company to become self-funding at the earliest opportunity. It is therefore important to note that early production at Imweru Central is primarily aimed at providing funding support for the full production potential of the greater Imweru gold deposit and not Imweru Central only.

PEA Report Overview

We are pleased to confirm that the findings from the PEA study are positive in terms of the objectives stated above and confirm, and in certain key respects exceed, the Company's expectations with regard to the inherent technical and commercial value of the project. 

Notably, the forecast free cash flow to be delivered by the project is expected to be sufficient to fund the future development of Imweru as well as ongoing exploration and development at the Company's remaining Lake Victoria Gold Projects. It could also potentially supplement funding at the Company's Haneti project, where there is considerable prospectivity for nickel sulphides, PGMs, gold, lithium and tantalum/niobium.

Detailed PEA Report Announcement to follow

We are currently undertaking a review of the PEA Report and will update shareholders as soon as possible detailing the key report findings and outlining the options available.

Louis Coetzee, CEO of Kibo Mining plc said "For some time we have stated our belief that the Kibo assets, both individually and collectively, have considerable value.  We have sought to confirm this belief through the commissioning of independent Competent Person's Reports, having recognised that without independent verification the market could not properly and fairly value the Company. 

We are therefore delighted that this PEA Report has delivered positive findings, particularly as it demonstrates we have a robust and attractive gold project in the Lake Victoria area, something which provides value for shareholders but which represents only one commodity of the four commodities in the Kibo asset portfolio and only one of the Company's seven gold projects.

Following our technical review and full report to shareholders on this PEA, our focus will be optimised commercialisation. The quality of the data and the technical findings thus far has provided various options as to how this project can be progressed, all of which have distinct advantages.

We would also remind readers that the Company announced on 11th December 2014 receipt of the Power Pre-Feasibility Report for the Rukwa Coal to Power Project. Technical review of that report is in progress and we will be reporting in detail on the positive findings as soon as possible. 

Furthermore, we would also note that your company remains active in a number of additional areas including:

-     Haneti geochemical work and partner discussions;

-     due diligence completion and planning for the Joint Venture with Metal Tiger plc at the Pinewood Uranium project;

-     discussions to secure a partner for development of our Morogoro Gold Project. 

Therefore, alongside the significant developments at our Rukwa Coal to Power Project and our Imweru Gold Project, your company is pushing ahead in numerous areas and will report on each area as events transpire.

We recognise that extensive news is flowing out to market in this period. To assist the market's understanding of the Kibo asset portfolio we will release before year end an operational and strategic overview for the Company covering and summarising all areas of operations, current status and forward looking plans."

Contacts

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 Abigail Wayne	+44 (0) 20 3693 1470	Hume Capital Securities Plc	Broker
Oliver Morse and Trinity McIntyre	+61 8 9480 2500	RFC Ambrian Limited	Nominated Adviser on AIM
Daniel Thöle Lucinda Alderson	+44 (0) 203 772 2500	Bell Pottinger	Investor and Media Relations

Kibo Mining - Notes to editors

Kibo Mining is listed on the AIM market in London and the AltX in Johannesburg. The Company is focused on exploration and development of mineral projects in Tanzania, and controls one of Tanzania's largest mineral right portfolios. Tanzania provides a secure and stable operating environment for the mineral resource industry and Kibo Mining therein.

Kibo Mining holds a thermal coal deposit at Rukwa, which has a significant NI 43-101 compliant defined resource (See Table 1 below), and is developing a 250-350MW mouth-of-mine thermal power station with an established management team that includes Standard Bank as Financial Advisor.  Kibo is undertaking a Coal Mining Definitive Feasibility Study with Stage 1, Phase 1 positive results now released and a Power Pre-Feasibility Study for Rukwa with initial findings to be released in the near term.

The Company also has extensive gold focused interests including Lake Victoria Goldfields and Morogoro projects. At Lake Victoria, the Company has projects with a 550,000oz JORC compliant gold Mineral Resource at Imweru Project (See Table 2 below) and a 168,000oz NI 43-101 compliant gold Mineral Resource at Lubando Project (See Table 3 below) in which the Company holds a 90% attributable interest. The Company is currently undertaking a Definitive Feasibility Study on its Imweru Project, with Preliminary Economic Assessment study findings to be released in the near term. As part of the Kibo Gold Portfolio, Kibo holds the Morogoro Gold project where the company is seeking a Joint Venture partner to continue active exploration activities at this highly prospective opportunity.

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 further holds the Pinewood (coal & uranium) project where the company has signed a MOU to enter into a 50/50 Exploration Joint Venture with Metal Tiger PLC.

The Company's projects are located in the established and gold prolific Lake Victoria Goldfields, the emerging goldfields of eastern Tanzania and the Mtwara Corridor in southern Tanzania where the Government has prioritised 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.  The Company recognises the potential to enhance the quality of life and opportunity for Tanzanian citizens through careful development of its projects.

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

Technical data

Rukwa Mineral Resource

Table 1 below presents a table showing the Mineral Resource estimate for the Rukwa Coal Project. The table is taken from an NI 43 101-Compliant Report by GEMECS (Pty) Ltd dated April 2012.

Table 1

RUKWA COAL RESOURCE SUMMARY- GEMECS (Pty) Ltd
	SEAM	NI 43-101	IN SITU
SEAM	THICKNESS	CLASS	MILLION TONS
S4	1.14	Indicated	2.17
S3U	2.04	Indicated	6.92
S3L	2.3	Indicated	12.63
S2	3.45	Indicated	23.43
S1U	2.48	Indicated	7.34
S1L	2.92	Indicated	17.4
S0	1.08	Indicated	1.44
Total Indicated Resources			71.34
S4	1.31	Inferred	1.38
S3U	2.24	Inferred	2.94
S3L	2.27	Inferred	3.86
S2	3.42	Inferred	7.94
S1U	2.05	Inferred	6.5
S1L	3.15	Inferred	12.83
S0	1.06	Inferred	2.6
Total Inferred Resources			38.05
TOTAL RESOURCES			*109.39

*Kibo holds 100% of the Rukwa Mineral Resource

Imweru Mineral Resource

Table 2 below presents a table showing the Mineral Resource estimate for the Imweru Project  at  a base case economic cut-off grade for the reporting of the resource  of  0.4 g/t. The table is taken from a JORC-Compliant Report by Tetra Tech EBA dated February 2014.

Table 2

Area	Material Type	Classification	Cut- off (g/t)	Specific Gravity	Metric Tonnes (t)	Short Tons	Gold Grade (g/t)	Contained Gold Ounces (troy)
Central	Laterite	Indicated	0.40	2.50	131,000	144,000	1.785	8,000
Saprolite	Indicated	0.40	2.50	706,000	778,000	1.387	32,000
Bedrock	Indicated	0.40	2.89	1,895,000	2,089,000	1.043	64,000
Total	Indicated	0.40	2.77	2,732,000	3,012,000	1.168	103,000
Central
Laterite	Inferred	0.40	2.50	685,000	755,000	1.317	29,000
Saprolite	Inferred	0.40	2.50	1,047,000	1,154,000	1.040	35,000
Bedrock	Inferred	0.40	2.89	7,838,000	8,640,000	1.029	259,000
Total	Inferred	0.40	2.82	9,569,000	10,548,000	1.051	323,000
East	Total	Inferred	0.40	2.70	2,653,000	2,925,000	1.449	124,000
Imweru Property Total		Indicated	0.4	2.77	2,732,000	3,012,000	1.168	103,000
Inferred	0.4	2.79	12,222,000	13,473,000	1.137	447,000
Combined (inf+ind)	0.4	2.79	14,954,000	16,485,000	1.143	550,000

*Kibo holds 90% of the Imweru Mineral Resource

*   Total estimates are rounded, based on composites capped at 26 g/t gold at Imweru Centraland 25 g/t at Imweru East, the cut-off grade isbased on a gold price of US$1,200 and a 90%  metallurgical recovery is assumed in calculation of cut-offgrade. A base case of  0.40  g/t has been selected.

** Classification of MineralResources incorporates the terms and definitions from the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) published bythe Joint Ore Reserve Committee (JORC)

Lubando Mineral Resource

Table 3 below presents a table showing the Mineral Resource estimate for the Lubando Project at a base case economic cut-off grade for the reporting of the resource of 0.5 g/t Au. The table is taken from an NI 43 101-Compliant Report by EBA Engineering Consultants Limited (now part Tetra Tech EBA) dated August 2009.

TABLE3: 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

*Kibo holds 90% of the Lubando Mineral Resource

* Numbers are rounded. Composites capped at 10.85g/t gold. Cut-off grade of 0.5 g/t gold based on a gold price of US$850/oz and assumed 100% metallurgical recovery.CIM definitions were followed for Mineral Resources.

Pursuant to the terms of an inherited agreement with Barrick East Africa Exploration LTD (BEAL), Kibo currently has an effective 90% interest in the Imweru and Lubando Project (and thus a 90% attributable interest in the Imweru and Lubando Mineral Resources shown in Table 2 and 3 above), with Barrick having a 10% carried interest up to a decision to mine at which point they have to contribute or be diluted to a 2% net smelter royalty. BEAL also has a first right of refusal pursuant to which they can buy the 90% interest in the project at an agreed market related value after completion of a Bankable Feasibility Study.  Kibo remains the operator of the project.

Review by Qualified Persons

The information in this announcement that relates to the Rukwa Coal Mineral Resource is taken from a report titled "Independent Technical Report for the Rukwa Coal Project, Mbeya Region, United Republic of Tanzania" dated 19th April 2012 by CD van Niekerk 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 NI 43-101 Standard

Information in this announcement that relates to the Imweru Mineral Resource is taken from the report titled "Resource Update for the Imweru Property Geita Region Northern, Tanzania, JORC Competent Persons Report" dated February 17th 2014 (the "Report"). The Report states a JORC-compliant Mineral Resource estimate and was prepared for Kibo Mining plc by James Barr P.Geo. and Darryn Hitchcock P.Geo. Senior Geologist and Geologist respectively with TetraTech EBA Ltd. Both Mr. Barr and Mr. Hitchcock are registered as Certified Professional Geologists with Association of Professional Engineers and Geoscientists of British Columbia a recognised professional organisation. Mr Barr as principal author responsible for the Report has experience in the evaluation and reporting of Archaean Gold projects and is a "Qualified Person" for reporting gold resources to the JORC Standard. He consents to the inclusion in this document of the matters based on his information in the form and context in which they appears. 

The information in this announcement that relates to the Lubando Mineral Resources is taken from a report titled  "Technical Report on the Lubando property, Mwanza, Tanzania" dated 31st  August 2009" (the "Report") The  Report is NI 43-101 compliant and was 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. Fier is 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 resource reports and the references to them in this announcement.

Johannesburg

16 December 2014

Corporate and Designated Adviser

River Group

This information is provided by RNS

The company news service from the London Stock Exchange

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