Dual-listed coal-to-energy company Kibo Mining will acquire an 85% interest in the Mabesekwa Coal Independent Power Project in Botswana in an all share transaction.This is a major part of Kibo’s strategy focused on re-positioning itself as a strategic regional electricity supplier on the back of its flagship Mbeya Coal to Power Project (MCPP) in Tanzania. It aims to build a portfolio of near-term energy production assets in multiple geographies.
The company will also re-brand to reflect the expanded strategy.
Kibo will acquire its 85% stake in Mabesekwa from Sechaba Natural Resources, a subsidiary of Shumba Energy, for 153,710,030 new ordinary shares in Kibo that shall rank pari passu with the existing ordinary shares in Kibo.
The project will consist of a 300 Mt subset of the current in-situ 777 Mt coal Mineral Resource (SAMREC) defined by Shumba at Mabesekwa.
Kibo’s intention is to build on the work completed to date investigating the construction of an integrated power project at Mabesekwa. It provides notable synergies with Kibo’s flagship 300 MW MCPP project, providing considerable benefits including economies of scale in equipment, execution, project finance and strong existing MCPP strategic partnerships.
Water and land use permits and environmental certification are in place at the project and previous studies include a Pre-Feasibility Study on the coal mine and a Scoping Study on the power plant.
Sechaba will retain a 15% interest in the project and gain a seat on Kibo’s Board of Directors. Kibo will be given first right of refusal to participate on terms and conditions no more onerous than those available to Sechaba in any energy projects that Shumba may pursue over a six year period from transaction completion. Shumba will be granted a reciprocal first right of refusal on any coal export projects that Kibo may pursue over the same period.
Should the transaction complete and the consideration shares be issued Kibo will have 548,964,394 ordinary shares on issue and Sechaba would hold 153,710,030 ordinary shares in Kibo, which would represent 28% of the enlarged share capital of the company as at transaction completion, and thus be a substantial shareholder.
“This is a fantastic opportunity for Kibo as we focus on building an energy business with producing assets in multiple geographies. Given this is the first step in pursuing our expanded strategy, we are pleased that the project is ideally located in Botswana, which has one of the best credit ratings in sub-Saharan Africa and a business-friendly environment,” says Kibo’s CEO, Louis Coetzee.
Mabesekwa Coal Independent Power Project (MCIPP)
The project is located approximately 40 km east of the village of Tonata and approximately 50 km south-east of Francistown, Botswana’s second largest city.
Kibo envisages the project 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 on the project by Kibo.
Given the MCIPP resource is yet to be technically defined, Kibo has not yet estimated a standalone mineral resource for the MCIPP project.