DETAILED CAUTIONARY ANNOUNCEMENT
Shareholders are advised that the Company has entered into negotiations as more fully explained below, which if successfully concluded may have a material effect on the price of the Company’s securities. Accordingly, shareholders are advised to exercise caution when dealing in the Company’s securities until a full announcement is made.
Strategic Joint Venture proposed on Haneti Nickel Project
- Kibo signs Memorandum of Understanding to pursue a strategic joint venture with Brazilian industrial conglomerate Votorantim for the further exploration of its Haneti properties.
Dated: 08 May 2012
Kibo Mining plc (“Kibo” or the “Company”) (AIM: KIBO), (JSE: KBO), the Tanzania focused mineral exploration and development company, is pleased to advise that it has agreed to record a Memorandum of Understanding (“MOU”) with Brazilian VOTORANTIM METAIS PARTICIPAÇÕES LTDA, a member of Votorantim Group, (“Votorantim”) to pursue negotiations forthwith with a view to entering into a definitive joint venture agreement in respect of its Haneti properties (“Haneti”) prospective for nickel and other base and precious metals as soon as practicable (the “Joint Venture”).
Proposed Transaction Framework
The Joint Venture, if concluded and implemented, would see Votorantim initially contributing exploration expenditures of GBP 0,5 million until December 2013. The earn-in phase comprises total investments up to GBP 2,7 million during a period of 3 years in an mutually agreed work program budget on Haneti to earn a 50% interest (the “Initial Period”), where after the parties will continue to contribute equally to the Joint Venture.
During the first stage of the program, the Joint Venture will be unincorporated and the Company will be the operator of the Joint Venture and its exploration work program. Votorantim will however have an option to take over the management of the work program and call for the transfer of the Haneti properties to a joint venture company (“Newco”) that will be owned equally by the Company and Votorantim. Votorantim shall be entitled to operate the Joint Venture from 31 December 2013 until the end of the Initial Period, where after the board of directors of Newco shall appoint the operator.
It is the intention of the parties to direct the work program towards establishing a JORC compliant mineral resource at Haneti during the Initial Period, where after the Joint Venture will consider the further development of the project on the merits of the exploration results achieved.
Votorantim is one of the largest corporate conglomerates in Latin America, with a 94 -year history. Votorantim Group’s activities are focused on key sectors of the economy that demand capital intensive and high scale production processes such as cement, mining and metallurgy (aluminum, zinc and nickel), steel mill, pulp, concentrated orange juice, and energy self-generation. In the financial market, the Group trades through Votorantim Finance and, through its New Business segment, we operate with a Venture Capital and Private Equity fund. In 2011, the Company’s net revenues totaled R$ 23.7 billion, of which R$ 5.8 billion consists of exports. Cash generation (EBITDA) amounted to R$ 5.3 billion, whilst investments reached R$ 4.3 billion in operating improvement and expansion. Votorantim Industrial is rated Investment Grade by the three major rating agencies in the world – Standar & Poor’s, Fitch Ratings and Moody’s. In March 2012 Fitch Ratings upgraded the foreign and local currency ratings of Votorantim to “BBB”. This recognition is due to Votorantim‘s leadership in the markets it serves, its management model, governance policies and transparency.
Commenting on the MOU, Kibo CEO Louis Coetzee said:
“In the announcement of the Company’s strategic acquisitions of Tanzanian energy assets Mzuri Energy Limited and Mayborn Resources (Pty) Ltd on 2 April 2012 it was pointed out that Tanzania as an African investment destination is, in our opinion, steadily moving up the priority ladder of a number of major international industrial groups in Asia and the Americas. Votorantim’s decision to make Tanzania one of the countries into which it invests its considerable resources of capital and skills would support this view.
This is an ideal opportunity for Kibo to develop a close working relationship with our colleagues at Votorantim in the base metals space to the benefit of our respective shareholders and the people of Tanzania. This step represents the next natural development in the broader strategy of the Company to build a multi-commodity exploration platform comprising more advanced exploration projects that can be taken more swiftly up the value curve by collaborating with respected industry veterans with a proven understanding of their chosen fields of operation.
We expect to continue developing this progressive approach to our business over time”
|Louis Coetzee||+27 (0)83 2606126||Kibo Mining plc||Chief Executive Officer|
|John Simpson||+44 (0) 161 831 1512||Zeus Capital Limited||Nominated Adviser|
|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 experienced professionals spanning mineral exploration, mine development, mining finance and financial control of public companies. It is supported by well trained and motivated Tanzanian staff that operates from Kibo’s exploration offices in Dar es Salaam and Mwanza.
The mineral assets of the Company comprise three existing and two newly acquired projects in Tanzania – Haneti (nickel, platinoid elements 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 enhance Shareholder value through acquisition, exploration and development of mineral assets in Tanzania. This objective will be pursued primarily through active exploration, particularly drilling on its current projects and by using the Company’s experience in Tanzania to acquire further quality mineral projects on competitive terms that can be quickly evaluated and taken to the next stage of development. Kibo will undertake continual risk assessment of its projects and take whatever actions it believes are necessary to ensure that these risks are mitigated.
[ott_teaser btn_text=”Download” btn_icon=”icon-right-big” btn_url=http://kibo.energy/wp-content/uploads/RNS-Announcement-Votorantim-MOU_03-05-2012_V3.0.pdf” btn_target=”_blank”]Kibo Mining plc – Memo of Understanding on Haneti Nickel Project[/ott_teaser]