Kibo finalises formal strategic joint venture agreement with major Brazilian industrial conglomerate Votorantim Metaís Participações Ltda, the metals, mining and smelting arm of the Votorantim Group, for the further exploration and development of its Haneti Nickel Project.
Dated: 12 December 2012
Kibo Mining plc (“Kibo” or the “Company”) (AIM: KIBO), (JSE: KBO), the Tanzania focused mineral exploration and development company, is pleased to report that it has now concluded a formal definitive joint venture agreement (“Joint Venture”) with VOTORANTIM METAIS PARTICIPAÇÕES LTDA, a subsidiary of the Brazilian industrial conglomerate Votorantim Group (“Votorantim”), to conduct a joint further exploration work program on its Haneti properties (“Haneti Project”) which are prospective for nickel and other base and precious metals.
Salient Features of the Joint Venture
Under the Joint Venture, Votorantim will initially contribute a maximum of GBP 2.7 million over a period of three years (“Initial Period”), tofully fund an agreed work program budget at the Haneti Project. Upon expending the full GBP 2.7 million within the Initial Period, Votorantim will have earned a 50% interest. Once the Initial Period has concluded the parties will continue to contribute equally to the working capital requirements of the Joint Venture. During the Initial Period the JV will carry out exploration activities aiming at the identification of the mineral potential of Haneti, focusing initially on the exploration for nickel and PGEs in the extensive mafic-ultramafic belt, located at the proximity of Dodoma. Work conducted during this period will also aim at establishing an initial early stage JORC compliant mineral resource at Haneti. Following the Initial Period the Joint Venture will consider the further development of the project on the merits of the exploration results achieved.
The Joint Venture is subject to certain administrative conditions precedent only, which the parties have undertaken to conclude within the next60 days. These include the transfer of the mineral licenses comprising the Haneti Project to a jointly controlled Tanzanian operating company and the registration of a LimitedLiability Partnership under English Law through which the parties will fund the Haneti Project.
Votorantim is one of the largest industrial conglomerates in Latin America. A Brazilian company with operations in 24 countries worldwide, Votorantim Group’s activities are focused on key sectors of the economy that demand capital intensive and high scale production processes in commodities and products including aluminum, nickel, zinc, and steel. The Group also has a financing division in the form of Votorantim Finance, and, through its New Business segment, manages its own Venture Capital and Private Equity funds. In 2010, the Group’s net revenues reached R$ 29.5 billion, of which R$ 5.4 billion consisted of exports. Cash generation (EBITDA) amounted to R$ 6.6 billion, whilst investments reached R$ 5.8 billion, earmarked for capacity expansion projects, operating improvement and acquisition of companies. Votorantim Group is rated as Investment Grade by the world’s top three credit rating agencies – Standard & Poor’s (BBB), Fitch Ratings (BBB) and Moody’s (Baa3). The agencies reaffirmed their ratings in March 2012 and this achievement is attributed to the Group’s leadership in the markets where it operates, its management model, and its governance and transparency policies.
Commenting on the conclusion of the formal agreement, Kibo CEO Louis Coetzee said:
“We are pleased to be joining forces with our colleagues at Votorantim in seeking to do justice to the very promising Haneti Project – both with regard to the commitment of capital as well as to the leveraging of their very considerable experience and skills acquired over many years. They are respected industry veterans with a proven understanding of their chosen fields of operation, and we welcome this opportunity to continue to build value for our respective shareholders and the people of Tanzania.”
|Louis Coetzee||+27 (0)83 2606126||Kibo Mining plc||Chief Executive Officer|
|Stuart Laing||+61 8 94802500||RFC Corporate Finance Limited||Nominated Adviser on AIM|
|Andreas Lianos||+27 (0)83 4408365||River Group||Corporate Adviser and Designated Adviser on JSE|
|Nick Bealer||+44 (0)207 710 9612||Cornhill Capital Ltd||Joint Broker|
|Tim Metcalfe / Matthew Johnson||+44 (0) 207 9768800||Northland Capital Partners Limited||Joint Broker|
|Matt Beale||+44 (0)7966 389 196||Fortbridge||Public Relations|
General Background & Strategy
Kibo was established in early 2008 to explore and develop mineral deposits in Tanzania, East Africa and was admitted to AIM on 27 April 2010 and the AltX in South Africa on 30 May 2011. The Board of Kibo is composed of professionals whose experience includes mineral exploration, mine development, mining finance, tax, law, mergers and acquisitions, and financial control of public companies. It is supported by a competent and motivated Tanzanian staff that operates from Kibo’soperations office in Dar es Salaam The mineral assets of the Company now comprise five projects in Tanzania – Haneti (nickel, PGE and gold), Morogoro (Gold), Lake Victoria (Gold), Rukwa (Coal) and Pinewood (Coal & Uranium). These projects give Kibo access to 38,000 square km of early stage exploration licenses in Tanzania’s premier gold mining region, the Lake Victoria Goldfield, within the emerging gold exploration regions in eastern Tanzania and uranium & coal regions in south-western Tanzania.
The Rukwa and Pinewood projects will provide Kibo shareholders with exposure to an attractive portfolio of strategic energy assets in Tanzania. Importantly, they are situated within and close to the Mtwara Corridor, an area where the Tanzanian Government has committed to significant infrastructure development and which has seen recent multimillion dollar investment in coal and coal-fired power stations and uranium exploration.
The Rukwa project is substantially more advanced than Kibo’s existing exploration projects, with a significant Mineral Resource of 109Mt of thermal coal already defined. This provides nearer term development and commercialisation potential, complementing the earlier stage existing projects held by Kibo. This is further supported by the memorandum of understanding that has already been entered into with a major Asian conglomerate for the development of a coal mine anda mine-mouth coal-fired power plant based on the Rukwa project.
In addition, the Pinewood project encompasses a significant ground holding of prospective Karoo sequence sedimentary rocks. These sediments are attracting considerable interest from international companies exploring for uranium and coal mineralisation following some notable discoveries in recent years.
Kibo’s objective is to build shareholder value in a sustainable manner. This objective will be pursued primarily through the active exploration of its own projects and by using the Company’s experience in Tanzania to acquire attractive exploration and development assets on competitive terms. Kibo seeks to move projects swiftly up the value curve by using the Company’s own skills base whilst also seeking to benefit from strategic collaborative relationships with industry leaders who have special skills and competencies within their chosen fields of focus. Kibo will undertake continual risk assessment of its projects and take whatever actions it believes are necessary to ensure that these risks are
12 November 2012
Corporate and Designated Adviser
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