Kibo Mining, the Tanzania focused mineral exploration and development company, has appointed Minxcon Projects, to conduct a Definitive Mining Feasibility Study (DMFS) for the RCPP coal mine.
The appointment marks the official commencement with the RCPP integrated feasibility study, which will cover development of both the coal mine and co-located thermal power plant.
Stage 1 of the DMFS is expected to be completed by November 2014. Stage 1 will cover the conventional pre-feasibility elements associated with a coal mine feasibility study, as well as assessing certain key mining parameters required for the planning of the definitive feasibility study on the Rukwa power plant.
The integrated RCPP feasibility study involves the sequential implementation, parallel execution and subsequent integration of the DMFS and definitive power feasibility study (DPFS). As part of Stage 1 of the DMFS, the Rukwa Executive Management Team will, over the next four months, also settle the heads of terms for the following key commercial agreements in the RCPP, including the Power Purchase Agreement, Coal Sale Agreement, and Grid Connection Agreement.
During the past month the Company also reached an in principle agreement on the definitive terms and conditions for a joint development partnership in the RCPP. The Company however decided to defer signing of the joint development agreement until completion of Stage 1 of the DMFS.
Upon completion of Stage 1 of the DMFS, which will amongst others assess most of the key commercial assumptions in the RCPP, the Company expects to conclude the joint development agreement on more favourable commercial terms.
Given these developments and the advanced status of the RCPP, Minxcon have agreed to conduct Stage 1 of the MPFS on a contingency arrangement with the company.