Tanzania – Kibo Mining, the Tanzania focused mineral exploration and development company, has “significantly” improved financials for its Mbeya Coal-to-Power-Project (MCPP) coal mine component.
The company and its advisers Minxcon Projects have now completed a financial optimisation study for the MCPP coal mine, based on feasibility results received to date.
The impact of optimal gearing for the MCPP coal mine was tested on the surface miner contractor option with the following key results:
- All-in cost margin ranges from 47.9% to 48.1%. Applying the aforementioned all-in cost margin, Kibo interprets that annual earnings before interest and tax of between US$ 23.5 million to $ 23.6 million will be generated;
- Applying a real discount rate of 5.51%, the best estimated Net Present Value of free cash flow to equity ranges between $214 million and $219 million;
- Equity IRR (leveraged) range between 131% and 146%, with a project IRR of 54%;
- Cash return on capital invested ranging between 726% and 732%; and
- Project payback period before loan of 2.6 years
Louis Coetzee, CEO of Kibo Mining, said: “We are delighted with the confirmation of the NPV range of $214 million to $219 million which is solely in respect of the coal mining component and does not include the significantly larger power generation portion of the project.
“This is a large-scale project which is now demonstrably lower risk. With the relatively low capital investment required, the Mbeya coal mine delivers a high project IRR and short payback period.
“As each stage of our work on the MCPP is completed, Kibo emerges with a stronger, more valuable project.”
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