map-of-kiboTanzania – In a letter to shareholders, Kibo Mining CEO Louis Coetzee outlined the current status of the company and its projects:

The Board of Kibo Mining is pleased to report on a highly productive 2015, which saw the company significantly advance work across our project portfolio.

This progress has been achieved against the backdrop of persistent challenges for mining companies. As one of the best performing mining stocks on London’s Alternative Investment Market in 2015, Kibo continues to create value in a low commodity price environment.

Our flagship project, the Mbeya-Coal-to-Power-Project (MCPP), built good momentum during the year, and will show clear catalysts for value in 2016. Whilst progress this year has been pleasing, we remain focussed on ensuring the value we believe our assets hold is properly recognised in our share price going forward.

Highlights of the year include:

  • Signing of a Joint Development Agreement with SEPCOIII on the MCPP;
  • Completion of Mining pre-feasibility Study on MCPP;
  • Appointment of Tractebel to conduct power feasibility study on MCPP;
  • Commencement of definitive feasibility studies on both the mining and power components of the MCPP;
  • Signing of Joint Venture agreements on the Morogoro gold and Pinewood uranium projects with Metal Tiger;
  • Encouraging results from Haneti geochemical and geophysical interpretations producing a substantially bigger area of interest and additional drill targets.

Financing strategy

In challenging current market conditions, we remain committed to our financing strategy as we build the business and prepare the MCPP for funding.

We continue to focus on recovering funds following Hume Capital’s liquidation, however we prepared for the possible delays by ensuring that our cash flow was not impacted.

We have made alternative financial arrangements to provide short-term cash flow stability, and we anticipate resolution and release of funds in January 2016. With current shareholders’ interests in mind, we continue to explore alternative sources of finance to ensure our operational goals can be achieved whilst maintaining value.

We will continue to examine the structure of our business in 2016 to ensure that it remains appropriately funded and continues to create shareholder value.

MCPP

The Mbeya coal project consists of a 48 km long strike length
The Mbeya coal project consists of a 48 km long strike length

The Mbeya project is seen by the Tanzanian Government as a key part of its strategy to address the country’s increasing power demand in line with rapid economic growth. We are therefore pleased with the progress achieved over the past year. The project is now in Bankable Feasibility Stage, with scheduled completion and Financial Close during Q1, 2016, construction commencement in H2, 2016 and the first power delivered to the grid in Q1, 2019.

Other projects

Despite our strategy of directing funds towards the MCPP, work is continuing at a steady pace on all of Kibo’s other projects, applying sensible risk management and ensuring significant value is generated across multiple projects.

Key to this approach has been our relationship with Metal Tiger, which has enabled us to continue work at all our pure exploration assets. At the Imweru gold project, we commenced a Pre-Feasibility Study in April following encouraging results from a Preliminary Economic Assessment report in February which confirmed the potential of Imweru to sustain a minimum economic mine life of approximately ten years, based on an existing Mineral Resource of c.550 000 oz.

In light of the effects of the continued weakness in the gold price, Kibo is proceeding cautiously with the PFS and is principally focussing on further modelling and desktop studies to test the economics of the project under various gold price scenarios.

The primary objective with the first production phase of Imweru is still to generate sufficient cash to expand the resource to its full potential and extend the life of mine and production capacity substantially during the second phase of production.

The first production phase should also generate enough cash to fund ongoing exploration activities on Kibo’s early stage exploration projects. During the first six months of 2015, we successfully negotiated two joint venture agreements with AIM-listed Metal Tiger plc on the Morogoro Gold Project and Pinewood Uranium Project.

Preliminary exploration programmes and budgets for both projects have been agreed and exploration has commenced. Following positive results from geochemical and geophysical studies during the year, which doubled the prospective target area in size and increased the number of drill targets significantly, the Haneti Project is at drill ready stage.

These plans are however currently on hold until the New Year due to the imperative focus of resources, in the short term, on the completion of the MCPP.

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