Kibo Mining Plc Final Lot of EPC Contract Signed on MCPP (6489O)
May 21 2018 - 1:00AM
UK Regulatory
TIDMKIBO
RNS Number : 6489O
Kibo Mining Plc
21 May 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: 21 May 2018
Kibo Mining Plc ('Kibo' or the 'Company')
Final Lot of Engineering, Procurement and Construction Contract
Signed on Mbeya Coal to Power Project
Kibo Mining plc ('Kibo' or the 'Company') (AIM: KIBO; AltX:
KBO), the multi-asset Africa-focused energy and resource company,
is pleased to announce that the Company has awarded Sepco III,
Kibo's Chinese development partner, the second lot of the
Engineering, Procurement and Construction ("EPC") (Power) contract
involving the construction of the Power Line that will evacuate
power from the Mbeya Power Plant in the Songwe District to the
TANESCO Mbeya sub-station.
Originating from the past 4 weeks' intensive engagement with the
Tanzania Electricity Supply Company ("TANESCO") on the development
of a Power Purchase Agreement ("PPA") for the Mbeya Coal to Power
Project ("MCPP"), the Company met with SEPCO III at their Qingdao
corporate headquarters to:
-- Update SEPCO III on progress with PPA negotiations;
-- Revalidate the existing EPC contract price for MCPP;
-- Integrate and align PPA technical requirements with EPC-contract provisions; and
-- Discuss broader project development co-operation with the
objective to expand the existing co-operation agreement to, amongst
other matters, also include the Company's Mabesekwa project in
Botswana.
During the above referred meetings, the Company and SEPCO III
also decided that sufficient progress has been made with the PPA
discussions and that it would be prudent to sign Lot 2 of the
EPC-contract with Sepco III. The power line construction contract
is the second lot of the EPC contractual work as outlined in the
announcement dated 29 August 2017. Kibo has a longstanding
relationship with Chinese company Sepco III for the development of
the Mbeya Coal to Power Plant that is of key strategic importance
in reducing Tanzania's critical power deficit.
Louis Coetzee, CEO of Kibo Mining, said: "We are delighted to
continue working with Sepco III as our designated EPC partner. The
signing of this second lot of the EPC is the conclusion of
discussions with Sepco III that occurred last week in China, during
which several strategic decisions were taken with regard to the
further development of the MCPP as well as our future strategic
co-operation with
SEPCO III.
Together with all our development partners we are working all
hours to complete the PPA as soon as possible. Over the past few
weeks we have once again been reminded of the significant
importance of the MCPP, both as a strategic energy project as well
as a socio-economic development project, and how critically
important it is to spend enough time to make sure that we get it
right the first time. The PPA process is in a very sensitive phase
of its development and this requires the utmost patience,
consideration and discretion from all stakeholders."
*Ends*
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 4408365 River Group Corporate Adviser
and Designated
Adviser on JSE
Ben Tadd +44 (0) 20 3700 SVS Securities Joint Broker
/ 0093 Limited
Tom Curran
Jon Belliss +44 (0) 20 7399 Novum Securities Joint Broker
9400 Ltd
Andrew Thomson +61 8 9480 2500 RFC Ambrian NOMAD on AIM
Limited
Isabel de +44 (0) 20 7236 St Brides Investor and
Salis / Priit 1177 Partners Ltd Media
Piip Relations Adviser
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014 ("MAR").
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 a power output target of 1,800 GWh/a
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
21 May 2018
Corporate and Designated Adviser
River Group
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END
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