Memorandum of Understanding for Tanzanian Mine Mouth Power Station signed by Mzuri Coal
Shareholders are advised that the Company has been informed by Mzuri Energy Limited (“MZURI”) that MZURI has entered into material negotiations in relation to its main asset, the Rukwa coal project, as more fully explained
* Mzuri Coal Limited signs Memorandum of Understanding to pursue the development of a mine mouth power station at its Rukwa Project with large Asian global conglomerate.
Dated: 15 May 2012
As set out in its announcement on 2 April 2012, Kibo Mining plc (“Kibo” or the “Company”) (AIM: KIBO), (JSE: KBO), the Tanzania focused mineral exploration and development company, has, subject to various required statutory and shareholder approvals, agreed to acquire control of MZURI. Kibo is now pleased to report that Mzuri Coal Limited (“MCL”), a wholly owned subsidiary of MZURI, has agreed to record a Memorandum of Understanding (the “MOU”) with a large Asian Conglomerate (AC), to pursue negotiations forthwith with a view to entering into definitive agreements providing for the development of a mine and a 250-350 MW mine mouth coal fired power station on MCL’s Rukwa Coal Project (“Rukwa Power Project”) near Mbeya as soon as practicable (the “Development Agreements”).
Proposed Transaction Framework
The Development Agreements, if concluded and implemented, would provide for the the following salient elements:
* MCL would provide the AC with all available technical data and expertise to enable the AC to conduct a comprehensive feasibility study on the development of a Rukwa Power Project. If found feasible, MCL would develop a thermal coal mine and enter into a long term off-take agreement with the AC or its nominee to supply the Rukwa Power Project with coal sufficient for its requirements.
* The AC would undertake comprehensive technical, financial and commercial feasibility studies in respect of the Rukwa Power Project. If found to be feasible, The AC would procure all required approvals and permits for the construction, commissioning and operation thereof and design, build and operate a mine mouth coal fired power plant on the Rukwa Power Project.
* The AC would procure an Independent Power Producer (“IPP”) license from the Electricity and Water Utility Regulatory Agency of Ta nzania (“EWURA”) and a Power Purchase Agreement (“PPA”) from the Tanzanian National Electricity Supply Company (“TANESCO”).
* The parties would have the opportunity to co-invest reciprocally in the equity of the mine and the power plant respectively on terms to be agreed between them.
Commenting on the MOU, Kibo CEO Louis Coetzee said:
“This development once again highlights Tanzania as an African investment destination of preference for major international industrial groups. It also validates Kibo’s decision to focus its resources and skills here, and to take the bold step to acquire a progressive explorer and developer like Mzuri that has developed a track record of meaningful engagement and value creation in the region over time through multilateral collaborative relationships.”
Mzuri chairman Tinus Maree added:
“This relationship could provide an excellent platform for Mzuri to expedite the development of some of its more advanced energy assets to the benefit of the participants’ respective shareholders and, equally importantly, to the people of Tanzania. There is a clear imperative to develop strategic infrastructure projects as catalysts to broader regional economic development in other sectors the region, and we are keen to participate in these endeavours from within the enlarged Kibo team”
|Louis Coetzee||+27 (0)83 2606126||Kibo Mining plc||Chief Executive Officer|
|Stuart Laing||+61 8 9480 2506||RFC Ambrian
|Andreas Lianos||+27 (0)83 4408365||River Group||Corporate Adviser and Designated Adviser (AltX)|
|Nick Bealer||+44 (0)207 710 9612||Cornhill Capital Ltd||Broker (Corporate Broking)|
|Matt Beale||+44 (0)7966 389 196||Fortbridge||Public Relations|
General Background & Strategy
Kibo is a public company registered in Ireland (company number 451931). Its registered office is Kibo Mining plc, Suite 3, One Earlsfort Centre, Lower Hatch Street, Dublin 2, Ireland. 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 AltX in South Africa on 30 May 2011.
The Board of Kibo is composed of professionals whose experience include 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’s operations office in Dar es Salaam.
The mineral assets of the Company comprise three existing and two newly acquired projects in Tanzania – Haneti (nickel, PGE and gold), Morogoro (Gold) and Lake Victoria (Gold) which give Kibo access to over 18,000 sq. km of early stage exploration licences in Tanzania’s premier gold mining region, the Lake Victoria Goldfield and within the newly emerging gold exploration regions in eastern Tanzania. The Company has recently also acquired, subject to certain suspensive closing conditions and approvals, coal and uranium exploration projects as publicly announced on 2 April 2012 in accordance with its multi-commodity exploration strategy.
Kibo’s objective is to build shareholder value in a sustainable manner. This objective will be pursued primarily through 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 that can be moved 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 mitigated.
15 May 2012
Corporate and Designated Advisor
[ott_teaser btn_text=”Download” btn_icon=”icon-right-big” btn_url=”http://kibo.energy/wp-content/uploads/RNS-Announcement-Kibo-MOU-for-mine-mouth-power-station-150512.pdf” btn_target=”_blank”]Kibo MIning plc – Mzuri Coal signs MOU for Tanzanian mine mouth development on Pukwa coal[/ott_teaser]