TIDMKIBO
RNS Number : 6133J
Kibo Mining Plc
03 April 2018
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 % holding in Kibo after
Shares Issued share issue
------------------ --------------- ------------------------
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 and Mr.
Phumaphi 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 10(th) February 2018, 100% basis)
SEAM SEAM Depth IN % IN SITU RAW QUALITIES (AIR
SITU DRIED)
----------------------------------------
THICKNESS below Megatons GEOLOGICAL Megatons RD ASH IM VM CV TS
------ ----- ---- ----- ----- -----
surface No DISCOUNT with discount gm/cc % % % % %
discount
------ ---------- -------- ---------- ----------- -------------- ------ ----- ---- ----- ----- -----
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 % IN SITU RAW QUALITIES (AIR
SITU DRIED)
----------------------------------------
THICKNESS below Megatons GEOLOGICAL Megatons RD ASH IM VM CV TS
------ ----- ---- ----- ----- -----
surface No DISCOUNT with discount gm/cc % % % % %
discount
------ ---------- -------- ---------- ----------- -------------- ------ ----- ---- ----- ----- -----
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:
(R) Minimum Seam thickness cutoff = 1.0m
(R) 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 Lutrafon
(Pty) Ltd
------------------------------ --------------------------
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 EUR15, 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.
**S**
For further information please visit www.kibomining.com or
contact:
Louis Coetzee louisc@kibomining.com Kibo Mining Chief Executive
Plc Officer
---------------- ---------------------- --------------- -------------------
Andreas Lianos +27 (0) 83 River Group Corporate Adviser
440 8365 & Designated
Adviser on JSE
---------------- ---------------------- --------------- -------------------
Ben Tadd / +44 (0) 203 SVS Securities Broker
Tom Curran 7000 093 Limited
---------------- ---------------------- --------------- -------------------
Andrew Thomson +61 8 9480 RFC Ambrian NOMAD on AIM
2500 Limited
---------------- ---------------------- --------------- -------------------
Isabel de Salis +44 (0)20 7236 St Brides Investor & Media
/ 1177 Partners Relations Adviser
Priit Piip Ltd
---------------- ---------------------- --------------- -------------------
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
"Coal Resource" (where concentration or occurrence
the mineral is coal) of 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
Matter/VM" component of coal as determined
under fixed conditions in
a laboratory as part of proximate
analysis.
------------------------ -------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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